What to do when property is damaged in a car accident and what coverage pays
There are important differences between property protection insurance vs property damage coverage. Your PPI pays when you damage a safely parked car, a tree or a fence in Michigan – regardless of whether you were at-fault. PD pays when you cause an out-of-state crash that damages another person’s vehicle.
Property Damage: For out of state auto accidents
The property damage coverage that Michigan drivers are required to carry under the No-Fault auto insurance law helps them cover their liability for vehicle damage repair costs resulting from an out-of-state car accident they caused.
For instance, if you were driving in Ohio and you were at fault for damaging someone else’s car, you would be legally liable to pay to repair the damages to the other person’s car. Your property damage coverage under your Michigan No-Fault auto policy that you have on your own vehicle will help you pay what you owe.
Under Michigan law, every driver must maintain at least $10,000 property damage coverage that can be applied to damages arising from an out-of-state car accident caused by the driver. (MCL 500.3101(1); 500.3131(1); 500.3009(1)(c))
It is important to remember that property damage coverage does not apply to vehicle damages arising from a crash that a Michigan driver causes within the State of Michigan. When this happens, the owner of the damaged vehicle has three options for getting his or her damage repair costs paid:
- File a claim under his or her own collision insurance policy
- File a mini tort lawsuit in small claims court against the at-fault driver for damages up to $3,000 (that are not or could not be covered by collision insurance)
- Pay out-of-pocket for the vehicle damage repairs
CAUTION: $10,000 of PD coverage, which is the minimum, is really inadequate. For instance, if you are driving outside of Michigan and you are responsible for totaling someone’s $50,000 car, your PD coverage would pay the first $10,000 of damage, but then you would be on the hook for the remaining $40,000. For this reason, we recommend carrying a minimum of $100,000 of PD coverage, which is fairly inexpensive.
Property Protection Insurance: For Michigan auto accidents
The Michigan No-Fault Act requires all auto policies to carry Property Protection Insurance (PPI) coverage. (MCL 500.3101(1)) If your car does damage to someone’s property in Michigan – such as a safely parked car, fence, tree – your insurer will pay for the damage through your PPI coverage. (MCL 500.3121(3) and (5))
PPI coverage always has a $1 million policy limit. (MCL 500.3121(5))
PPI coverage is paid without regard to fault in an auto accident. For instance, if you are waiting to make a left turn and another vehicle strikes you and pushes you into a telephone pole, both your insurance company and the insurance company of the wrongdoer will share equally in the cost to repair or replace the telephone pole.
Who do I sue for a PPI claim?
The statute of limitations on a Property Protection Insurance claim is one year. (MCL 500.3145(5)) If your safely parked car or any other property is damaged by another driver, the actual responsible party is the insurer of the vehicle’s owner. If a claim cannot be made against the owner’s insurer, then the claim can be filed against the insurer of the person driving the vehicle at the time the property damage occurred. (MCL 500.3125)
If you are forced to file a lawsuit to enforce your PPI claim, you must name the insurer as the Defendant. If you fail to do so and instead name the driver and/or owner of the car as the defendants, and the one year statute of limitations expires, you will not be able to name the insurer to the lawsuit at a later date.
The only exception is if the car was uninsured. In that case, you must name the driver and or owner as defendant(s) in the lawsuit.
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