Property Coverage under Auto Insurance Policies

While statistics on the deaths and personal injuries caused by motor vehicle accidents are understandably the most vivid and immediate reminders of the societal costs incident to the extensive use of cars and trucks in the United States, property damage resulting from vehicular accidents in this country has its own significant economic impact. Motor vehicle insurance policies accordingly contain numerous provisions dealing with various kinds of property damage and loss.

Questions concerning the nature and extent of property coverage in auto insurance policies raise a wide variety of legal issues. Many kinds of property damage can create the possibility of insurer liability under a policy. These include such types of losses as damage to vehicles or other property of third parties sustained in an accident with an insured vehicle, damage sustained by the insured vehicle itself in such an accident, loss of or damage to an insured vehicle through theft, damage to property being transported in or towed by an insured vehicle, or damage to an insured vehicle through causes not involving accident or theft, for example, damage by vandalism, fire, or flood. Such issues may be complicated further if the operator of a vehicle involved in an incident that results in property damage is not the party who is actually insured under the policy.

The business of insurance in the United States, including that of motor vehicle insurance, has traditionally been governed by the laws of each state rather than by a single unified system of federal law. As a result, the many complicated questions dealing with recovery for property damage or loss under an auto insurance policy may be answered differently from state to state.