Auto Insurance, Are You Really Covered?
Part 4 is the final compulsory part of every Massachusetts auto insurance policy. Many drivers believe that if they have all four compulsory parts of the Standard Motor Vehicle Insurance Policy in Massachusetts they are “fully insured,” but as we’ve examined in this series, this isn’t entirely true.
The fourth part of your policy, “Property Coverage,” covers an accident caused by you or by a person who has permission to operate your vehicle, that results in damage or total destruction of another person’s (or company’s) vehicle or property, meaning it also covers damage to property other than a motor vehicle. In Massachusetts, it is compulsory to carry at least $5,000 in “Property Coverage.”
There are several reasons why we strongly recommend increasing your (Part 4) “Property Coverage” if your budget permits. The primary reason to increase your coverage is in expectation of the cost to repair or replace a motor vehicle damaged or destroyed by you. While damage such as a dented fender can run $1000-$2000 to fully repair, there are numerous luxury vehicles (think Mercedes, Porsche, and BMW) that can easily run much higher. Needless to say, damage to a vehicle can range from a minor fender-bender to an outright “total loss.” In the case of a badly damaged or “totaled” luxury vehicle, the cost can easily exceed $50,000 and in some instances cost well over $100,000 to replace.
There are also instances in which you may be found liable for damage to property other than, or in addition to, a motor vehicle. Some examples of other property damage you may be liable for include damage to a home struck by your vehicle, damage to a fence or other physical property, and/or damage to utilities, such as an electric or traffic light pole. In these cases, the minimum coverage limit of $5,000 may not come close to covering the damage or total loss you caused, and you may be ordered to cover the remaining cost of the damage personally. For these reasons, it is strongly recommended that you increase the minimum “Property Coverage” to the highest amount your budget reasonably allows.
To learn more about your auto insurance policy, check out the first three blogs in our Are You Really Covered? series, and stay tuned for Part 5!