Several years ago one of our clients was pulling into a parking space directly in front of a small diner. The client mistakenly hit the gas, rather than his brake, and wound up creating a new entryway to the restaurant.
The portion of his auto policy that responded to cover the damages to the building was the Property Protection Insurance (PPI) coverage.
In Michigan, there are actually two separate coverages on each auto policy that respond for damage to other people’s property, such as buildings, fences, and mailboxes. Property damage coverage would also pay for damages to another person’s properly parked vehicle.*
PPI coverage responds for property damage that occurs in Michigan. PPI coverage is required on every Michigan auto insurance policy and always has a $1 million coverage limit.
A separate coverage, property damage liability, applies to out-of-state accidents.
Most states don’t mirror Michigan’s no-fault auto insurance, wherein (for the most part) when there is an automobile accident each party’s own insurance policy and coverage responds.
When traveling out-of-state, in addition to being responsible for damages to property, if you are at-fault in an accident with another vehicle you could also be responsible for damages to the other person’s automobile – property damage liability coverage would respond for these types of claims.
Property damage liability limits are chosen by each policyholder, subject to a state minimum required coverage of $10,000.
* One of the exceptions to Michigan’s no-fault auto insurance is a collision involving a parked vehicle – in this type of situation the driver who hit a properly parked vehicle would be responsible for damages to that vehicle, which would be covered under PPI.