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What Happens When Your Property Damages Exceed Third-Party Coverage Limits

Posted by Unknown | Mar 28, 2018 | 0 Comments

What Happens When Your Property Damages Exceed Third-Party Coverage Limits


Repairs to your vehicle or other property after a car accident can be costly. In addition to PIP, all Florida auto insurance policy holders must carry the minimum state required property damage liability coverage of $10,000. This coverage is meant to be used if you caused an accident and must pay for repairs to the damaged property/party.

So, what happens if the damages to your vehicle or property exceed the other driver's $10,000 Property Damage (PD) limit? This is a frequent problem our clients bring to our Property Damage Department to solve for them.

When Property Damage Exceeds its Limits

If you do not carry collision coverage, which is an optional coverage provided by your insurance carrier, and you are relying solely on third-party/at-fault coverage for your vehicle repairs, you may find yourself having to make some out-of-pocket contributions to your car if your damages exceed $10,000. If multiple vehicles are involved in the same accident as you are, that $10,000 PD limit is disbursed to help cover repair costs of all the claimants involved. Once that $10,000 is exhausted, there is nothing left and nothing anyone can do if you do not want to go through your own insurance.

How the PD Limit is Allocated in Multi-Party Accidents

When more than one vehicle or property is damaged in an accident, the negligent driver's PD limit must be disbursed amongst each of the parties involved. Because most Florida drivers only carry the minimum state required liability limit of $10,000, this amount must be weighted according to the severity of property damage sustained.

For example, if three cars are damaged in an accident totaling $24,000 worth of property damages, the pro-ration calculation will be as follows:

Car A: $14,454/$24,000 = 0.60225 x $10,000 (PD limit) = $6,022.50

Car B: $7,078.50/$24,000 = 0.29494 x $10,000 = $2,949.40

Car C: $2,467.50/$24,000 = 0.10281 x $10,000 = $1,028.10

Protect Yourself and Your Investment Before an Accident Occurs

It's well-known that the best offense is a good defense. Take a look at your policy options. Collision coverage can help you further recover compensation if a PD excess issue arises with the at-fault carrier. While you can't know if today, tomorrow or sometime in the future you will be in an accident, you can protect yourself so if that does happen, you will be prepared.

If you're injured in an accident, SKG will also assist you with any property damage claims you may have, complementary. From diminished value claims to total loss and other PD issues, our Property Damage Department will work with you and speak to the insurance companies, body shops and rental agencies on your behalf. Call now for a free consultation at (800) 350-FIRM or contact us online to speak to one of our office staff today.

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