Does auto insurance cover damage on private property?

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Important facts to know...

  • Auto insurance pays for damage on private property
  • Assigning fault in an accident on private property can be difficult
  • Your insurance rates can increase after a private property accident, even if the crash wasn’t your fault
  • Most private property accidents happen in parking lots and are relatively minor, so they shouldn’t affect your insurance rates significantly

The way your insurance company deals with a car accident depends on the nature of the crash. Accidents that occur on private property are unique situations.

It’s difficult to assign fault on private property, such as in a parking lot. Police often won’t respond to these kinds of accidents unless there are significant damages or injuries.

Even if someone backed into your car while it was stationary, you might have to file a claim with your own insurance company. Your premiums might temporarily increase as a result. It sounds unfair, and in many ways, it is.

Compare car insurance rates here to see how much you could save on auto insurance!

The following sections break down what happens when your car suffers damage on private property, and what your auto insurance does and doesn’t cover.

Insurance Claims for Private Property Damage

If you have full coverage on your vehicle, your car insurance policy should pay for damage incurred on private property but if you carry only liability insurance, you won’t be covered.

Listed below are the three main types of car insurance:

  • Liability
  • Collision
  • Comprehensive

What follows is an explanation of how each type of coverage might come into play for private property damage.

Liability Coverage

This coverage only pays for damage to someone else. You need liability insurance in case you’re at fault in an accident and the other driver sustains injuries or vehicle damage. In fact, just about every state requires it; New Hampshire and Virginia are the only two that do not.

Many drivers with inexpensive cars prefer to carry only liability coverage, rationalizing that the market value of their car isn’t high enough to justify paying for full coverage. This isn’t always a bad decision.

But just be aware that liability coverage won’t pay for damage to your vehicle, including on private property.

Collision Coverage

Collision pays for damage to your own vehicle. If you have an accident on a public roadway and the other driver is at fault, then their insurance should pay for your damage.

In an accident where you’re the driver at fault, you would file a claim with your insurance company, and your collision coverage would pay for the damage.

Private property accidents can often be exceptions to this general rule.

The other driver might clearly be in the wrong – say they plowed into your car from behind while you were waiting for a parking space – but since police rarely respond to private property accidents with minor damage and injuries, no fault gets assigned.

In this scenario, you’d file a claim with your insurance company, and the other driver would file a claim with theirs. Assuming you have collision coverage, it would pay for your damages.

Comprehensive Coverage

This type of insurance pays for damage your vehicle sustains in a non-collision situation. These situations include damage from the following:

  • flood
  • hail
  • tornado damage
  • fire
  • theft
  • vandalism

If you finance your vehicle purchase, most lenders require you to carry comprehensive and collision along with liability coverage.

Comprehensive coverage can come into play in certain types of private property damage. Suppose, for instance, that you park under a tree at your friend’s place, and a bad storm comes along and uproots the tree, which falls on your car.

If you lack comprehensive coverage, your insurance company won’t pay for the damage. But if you have comprehensive, your insurance should cover it even though it happened on private property.

How Private Property Damage Affects Your Insurance Premiums

The bad news about private property damage is, it can affect your insurance premiums even if you aren’t at fault because fault rarely gets assigned in a private property accident.

Even if you’re blameless in the class, you’ll likely have to file a claim with your own insurance and not with the other driver’s insurance. Some insurance companies increase your premiums when they have to pay a claim on your behalf.

The good news is, since most private property accidents are minor and involve little damage, the increase shouldn’t be substantial.

Why don’t police usually assign fault in private property accidents?

Public roadways feature lots of controls that tell drivers what to do and what not to do. You have speed limits, stop signs, yield signs, traffic lights, and so forth. Private property lacks most of these directives, so it can be difficult to say with certainty who’s at fault in a crash.

Yes, some cases seem obvious. If your car is sitting in its parking space not moving and another driver backs into it, then it shouldn’t take a traffic control device to determine it’s the other person’s fault.

The issue becomes, where do you draw the line? At what point is the fault in a private property accident so obvious that police can assign it despite the guidelines of a normal road not being present?

In many jurisdictions, police circumvent this question by never assigning fault in a private property accident. Consequently, you should be prepared to deal with your own insurance company if you’re involved in an accident of this nature.

Will my premiums definitely increase?

Whether your premiums increase after a private property accident depends on your insurance company.

Many companies now offer accident forgiveness. If it’s your first accident, regardless if you were at fault, the insurance company won’t raise your rates.

Not all companies offer this coverage, and moreover, the companies that do often charge more for it. So you should consult with your agent to see what the standard protocol is after a fender-bender on private property.

How much will my premiums rise?

This is another question that depends on your insurance. But one thing that’s true no matter what company you go with is that insurance premiums are all about the risk. The riskier the insurance company thinks you are as a driver, the higher your premiums.

Most private property accidents are little dingers that happen in parking lots and driveways. So they’re not too expensive to repair. The claim you file with your insurance probably won’t be for much.

Since the insurance company doesn’t have to pay much on your behalf, your premiums, if they rise, probably shouldn’t rise much.

How to Get the Best Deal on Car Insurance

You can get the best deal on car insurance by doing two things: comparing three to four policies before choosing one and reviewing your coverage every six months.

Comparing multiple policies gives you a good frame of reference. You get the idea of what the market for insurance is like in your area so you can use that information to determine which deal you’re being offered is best.

Once you choose a policy, don’t assume it will be the best fit for you indefinitely.

Insurance changes over time, and so do your needs. By doing a policy review every six months, you can always be sure your insurance coverage is the best available for your needs.

Private property damage can be tricky. But your auto insurance company should cover it. By having the right coverage in place, you can ensure you’re protected in unique situations such as these.

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