Function

• Property damage can be included in automobile and homeowner policies. If it is in an automobile policy, it protects the person who owns the car, whenever he is sued for damage that he is at fault for with his car to another person's property (up to a certain limit). For example, if a person has $5,000 in property damage insurance, and he crashes into a building and does $5,000 worth of damage, the insurance company will pay for the damage.
  
  

Considerations

• If the car owner hits a building and does $15,000 worth of damage, however, then the building owner can get $5,000 from the insurance and will have to sue the car owner for the remaining $10,000. The car owner will have to fight the lawsuit or settle. If you anticipate that you might do a lot of damage, it is in your best interest to carry more insurance, since this will reduce what you are responsible for out-of-pocket.
  
  

Exclusions

• Some damage is not covered by property damage insurance. For example, if one vehicle hits another vehicle, and the injured vehicle's owner wants to sue, she cannot sue under the property damage insurance policy; instead, she must file a claim under collision damage insurance. The same applies to hitting people; since people are not property, property damage will not cover physical injuries to others. Also, state law may dictate the minimum amount of property damage insurance you have to have. Your insurance agent will be able to advise you on what you must have.