This week’s Massachusetts Auto Insurance Coverage Review is Part 4 of the Massachusetts Auto Policy: Property Damage Coverage.
The Policy contract reads:
Part 4. Damage to Someone Else’s Property
Under this Part, we (the insurance company) will pay damages to someone else whose auto or other property is damaged in an accident. The damages we will pay are the amounts that person is legally entitled to collect for property damage through a court judgment or settlement. We will pay only if you (named insured) or a household member is legally responsible for the accident. We will also pay if someone else using your auto with your consent is legally responsible for the accident. Damages include any applicable sales tax and the costs resulting from the loss of use of the damage property.
We (the insurance company) will not pay for property damage which occurs:
1. While your auto is being used as a public or livery conveyance. This does not apply to the use of your auto in a share-the-expense car pool arrangement or in an expense reimbursement program wither as a volunteer or at work.
2. While any auto is being used by anyone in the course of his or her employment in the business of selling, servicing, repairing or parking autos. This exclusion does not apply to the ownership, maintenance or use of your auto by you or a household member.
3. While anyone is using a vehicle in the course of any business other than the business of selling, servicing, repairing or perking autos. This exclusion does not apply to private passenger autos or to pic-up trucks, vans or similar vehicles not used for the delivery or transportation of goods or materials unless such use is incidental to your business of installing, maintaining, or repairing furnishings or equipment.
4. While a household member, other than your spouse, is using an auto which you or any household member owns or uses regularly unless a premium for this Part is shown for that auto on the Coverage Selections Page.
5. While you or your spouse, if a household member, is using an auto which you or your spouse, if a household member, owns or uses regularly unless a premium for this Part is shown for that auto on the Coverage Selections Page.
6. To an auto or other property owned by you or the legally responsible person. Similarly, we will not pay for damage to an auto or other property, except for a private residence or garage, which you or the legally responsible person rents or has in his or her care.
7. When the property damage is caused by anyone using an auto without the consent of the owner.
The most we will pay for damage resulting from any one accident is shown on the Coverage Selections Page. This is the most we will pay as the result of a single accident no matter how many autos or premiums are shown on the Coverage Selections Page.
If someone covered under this Part is using an auto he or she does not own at the time of the accident, the owner’s auto insurance must pay its limit before we pay. Then, we will pay for any damages not paid by that insurance, up to the policy limit shown on the Coverage Selections page. However, if the claim is covered by us and another auto policy, we will pay only our proportionate share of those damages not paid by the owner’s auto insurance.
Under this Part, we may have ot pay for property damage even if youor the legally responsible person fails to give us prompt notice of the accident. In that case we may be entitled to reimbursement from that person.
This Part is Compulsory. You must have limits of at least $5,000. However, you may want to buy more protection. Higher limits may be purchased if agreed upon by you and by us. However, $5,000 is the most we will pay for property damage caused by an auto covered under this Part which is being operated in any prearranged or organized racing, speed, stunting or demolition contest or activity or in practice or preparation for any such contest or activity.
Part 4, Property Damage, is a compulsory coverage on the MA auto policy, with minimum limits of $5,000.
Most of our clients at Johnson & Rohan Insurance carry Part 4 limits of $100,000 per accident. More and more are electing to buy, $250,000.
Driving next to a BMW car transport truck on Route 128 the other day, I was reminded that $100,000 may not be adequate coverage.
The annual cost to increase Part 4, Property Damage, coverage from $100,000 to $250,000 is about $7.
Conversely, the annual savings, going from $100,000 down to $50,000 of coverage is about -$5.
Call Johnson & Rohan Insurance to review your coverage today!