Some states have "no-fault" auto insurance - also called "personal injury protection" or "PIP" - where the insurance company ("insurer") automatically pays, regardless of fault, for certain losses or damages sustained by an accident victim who was covered by the insurer's policy. PIP benefits are designed to reduce the wrongful death, personal injury, and property damage lawsuits that result from motor vehicle accidents.
With that purpose in mind, some no-fault insurance plans include protection for property damage, in many ways similar to the protection provided by the conventional motor vehicle liability insurance that most of us are familiar with and buy. These statutes usually specify what types of property are and are not covered, as well as how to claim benefits.
However, most states have either specifically excluded or do not discuss property damage claims in their no-fault statutes, and so claims for property damage are left to the traditional tort system - that is, you need to file a lawsuit against the other person to recover damages for your loss.
So, if you've been in a car accident and you've suffered property damage, it is very important that you know how your state's no-fault law treats claims for property damage.
Property That Is Covered
The most common type of property damage covered under no-fault statutes that provide for such coverage is non-vehicular property damage. The coverage usually applies to real property, or land, as well as personal property. For example, coverage will usually include damages to things like buildings and even livestock.
In addition, while the typical no-fault property damage laws don't cover damages to motor vehicles that were moving at the time of an accident, insurers usually will pay for damages to vehicles that are damaged while properly parked. The only requirements are that:
- The vehicle was safely parked, and
- It did not pose any significant or unusual risk that caused the damage
Property That Is Not Covered
Damage to motor vehicles involved in accidents and their contents is the prime exclusion in the majority of no-fault laws which provide property damage coverage. However, some laws just limit the amount that can be recovered for damages to a moving car involved in an accident.
Normally, car owners who want to be paid for property damage to their vehicles have to buy separate collision insurance coverage.
It is necessary that you understand how your state no-fault law treats or defines "vehicles." Under some statutes that provide coverage for property damage, things like motorcycles, trailers, and bicycles are vehicles, and are excluded from coverage. So, you won't be able to recover under the no-fault property damage provisions if such a vehicle is damaged in an accident.
Illegally or improperly parked vehicles generally will not be covered by property protection insurance.
If, as a result of a car accident, you've suffered damage to real or personal property and you think the damage is covered under the property insurance provisions of your liability insurance policy and state laws, you should file a claim with the driver or car-owner's no-fault insurance carrier.
The forms needed to file claims for benefits usually are available from the insurer, and most statutes require the insurer to handle the claims quickly. Generally, benefits are overdue if not paid within 30 days after the insurer receives written notice that the damage happened and the amount of the loss.
The person claiming benefits might have to show that he or she actually owns the property that was damaged. In addition, he or she usually has to figure out the amount of the loss or damage. There are several ways to measure the amount of property damage, such as:
- Reasonable costs of repair
- Replacement value
- Market value
- Actual cash value
- Cost, minus depreciation, which is the loss of value that is due to use, or wear-and-tear
When filing a claim, it is important to remember that the insurance policy might limit the amount that the insurer has to pay.
For example, a policy might state that "the amount that will be paid for all damage to real or personal property in a single accident will not exceed $ 100,000."
Have Trouble with a Claim?
What do you do if an insurer won't pay your claim for property damage or the insurer offers to pay an amount that you think is too low? One answer is to sue the insurer, not the car-owner. A lawsuit might be the only way to get an insurer to cover your loss.
If you have collision or homeowners insurance, another way to recover for your loss is to file a claim under your policy. In most such cases, the right to claim the damages will be subrogated to your insurer, that is, your insurer is substituted for you in any lawsuit against the driver's insurance company.
For example, if motorist A damages homeowner B's house, and A is insured for no-fault property damage and B is insured for accidental damage to his house, B has a choice. He can file a claim under A's policy for no-fault benefits, or under his own homeowner's policy. If B files a claim under his policy, the claim he had against A's policy will be given to his homeowner's insurer. In the usual case, B's insurer will pay B's claim and then it will sue A's insurer to recover the amount that it paid to B.
Related Resources on Lawyers.comsm
- No-Fault Auto Insurance
- No-Fault Insurance: What's Covered and What's Not
- Automobile Insurance articles and information
- Automobile Accidents articles and information
- Selecting a Lawyer
- Find an Automobile Insurance Lawyer
- Visit our Automobile Message Board and Insurance Claims Message Board for more help