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PHYSICAL DAMAGE INSURANCE
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What is Physical Damage Insurance?
Auto Physical Damage covers damages to your vehicle in the event that it is damaged due to a covered cause of loss. This coverage is responsible for repairing or replacing your vehicle up to a stated amount you have chosen beforehand. Physical damage insurance can be applied to your current insurance policy or you can purchase it by its self on what is called a stand alone policy.
Table of Contents
Who Needs Property Damage Insurance and Why?
Anyone that want to makes sure their vehicle is also protected in the event of an accident or loss. This is especially important to single unit motor carriers or owner-operators as their vehicle is their livelihood and if their only vehicle is out of commission, they aren’t making any income to pay for their trucking business expenses.
What It Covers
It will cover any damage to your vehicle arising from any of the covered losses in your particular policy. This typically includes, damages or loss arising from collisions, fire, falling objects, natural disasters, theft, and vandalism.
What It Doesn't Cover
Auto Physical Damage does not cover damage done to other people, their vehicles, or their property. It will only cover your own vehicle or equipment. It will also not cover any cargo you are transporting.
How Much Coverage to Acquire
Typically you want to have the current market value stated as the coverage amount for your vehicle to make sure the vehicle is replaced in the event of a total loss. However, if you think your particular vehicle is worth more than that, you can select a higher stated covered value for your vehicle, just keep in mind that if you select a stated value much higher than current market price, your insurance company may need to know why you’re placing the value much higher than the current market value of the vehicle.
How Much Does Physical Damage Insurance Cost?
This coverage will cost a certain percentage, or rate, of the stated amount you’ve selected for your vehicle. This entirely depends on the insurance company’s physical damage rates.
What Factors Effect Property Damage Insurance Pricing?
the factors that determine pricing for auto physical damage include:
- Driving Record/Experience
- License Class/Experience
- Claim/Loss History
- Age of Driver
- Age of Vehicle
- Vehicle Type
- Weight of Vehicle
- Insurance History
Which Deductible to Choose
When choosing a Comprehensive/Collision deductible, keep in mind that the higher the deductible, the lower the total cost will be. This is because by paying a higher deductible, you are taking on more of the monetary risk. The same concept applies to a lower deductible. The lower the deductible, the higher the total cost of insurance. This is because you’re taking on less monetary risk.
For Physical Damage coverage, most insurance companies will offer deductibles of $500, $1,000, $2,500, $5,000, etc. Remember that not all insurance companies are the same and some provide options for higher deductibles, while others do not.