When the other driver's property damage coverage falls short

Perspective from an auto property claims specialist

For survivors and families3 min read

Insurance and claimsLiability coverageCoverage limitsThird party claimsCollision coverage

A driver may have insurance yet carry too little property damage coverage to handle a serious crash. Under the policy terms, the limit caps what that coverage will pay. The cap is no proof that your repair or total loss is worth only that amount. The same limit may also have to stretch across several damaged cars, a damaged guardrail or other property. [1, 2]

Pull the numbers apart

Find out from the other driver’s insurer what its property damage limit is and how it values your loss. Also ask whether other claims share that limit. Find out how much it plans to pay you and whether you must sign a release to get it. Track the repair estimate, the valuation report, towing bills and rental costs on separate lines. That way you can see what’s still unpaid. [1, 2]

Look at what your own policy covers

Your collision coverage may pay for your car, minus your deductible. Some states and policies also offer underinsured motorist property damage coverage, which may help. Ask your insurer which coverage fits. Also ask how it would coordinate with any payment from the other insurer. Before signing any release, let your insurer know about the settlement being offered. [1, 3]

A payment at the limit may not settle everything

Even a payment up to the limit can leave some costs unpaid. The facts and local law decide whether you can go after another responsible party or other coverage. If the gap is large or someone was hurt, get local legal advice. Ask about the options open to you and what any release would mean. [1, 2]

Check these before accepting

  1. Does this property limit apply per crash?
  2. Are other claims being paid from it?
  3. Which losses would the proposed release settle?

Get the offer and its scope on paper

Ask for a written statement of the payment offered and the losses it would cover. [1]

Sources and further reading

  1. 1Texas Department of Insurance, auto limits and insufficient coverage
  2. 2California Department of Insurance, liability coverage limits
  3. 3Washington insurance commissioner, recovery and settlement notice

This overview offers general education from the auto property claims side. Coverage, fault, limits and the order of payment vary by state and policy. A coverage limit doesn’t measure your full loss.

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