Cars and trucks crash into buildings and houses more often than you might think. About 60 people crash into retail and office buildings daily in the U.S. Most of these accidents are caused by a new or older driver hitting the gas in error.
How would you proceed if this were to happen to your home? Most people are not sure how to move forward with an insurance claim in such a case. Does the driver's auto insurance company pay for damage? Or does your homeowner's policy apply? There seems to be plenty of insurance to go around, but who pays for what?
The Driver's Vehicle Policy
Let's start with the number one rule for vehicle accidents: The party at fault for an accident is liable for any damage caused by that accident. So they are on the hook for the damage caused to your home, or any other property for that matter, if an auto crashes into your home and the crash was the driver's fault. The property damage clause of an auto policy comes into play here, up to the limit set in the policy.
Let's say that an auto crashes into your home. It causes $20,000 in damage. The at-fault driver's auto policy has a property damage coverage limit of $25,000. Your damage should be paid for in full through the driver's policy in this case.
But what happens if the driver's coverage limit is $25,000 and your home suffers $50,000 in damage?
Your Homeowner's Policy
Most standard homeowner's policies protect the owners for damage to their dwelling and connected structures, such as a garage, that is caused by hazards such as fire, smoke, theft, vandalism, windstorm, and other things—like autos. Most standard homeowner's policies cite "vehicles" among the hazards covered that might cause damage.
Read your homeowner's policy to make sure it covers damage due to autos. Be sure to contact your agent ASAP if you do not see "vehicles" listed, or if you have any questions regarding the issue.
Your homeowner's policy should also pick up the tab if your house is damaged by a driver who doesn't have any insurance coverage.
What if You Damage Your Home?
Maybe you backed out of your garage with the door closed, or you gunned it too close to an outside wall. You might be surprised to learn that the same rules often apply either way, whether you caused the damage or someone else crashed into your home.
You would have to make a claim on your auto policy for any damage to your vehicle, but you would make a claim on your homeowner's policy for the damage to your dwelling in most cases. Again, it's key to read your policy with care so you can be sure you are covered in this case.
The Matter of Deductibles
Most homeowner's policies come with high deductibles, so making a claim can cost you a fair bit of money out of pocket. It may not be worth it to make a claim if the damage to your home is not severe and won't cost too much to repair. And you will have to make claims on both your auto and homeowner's policies if your vehicle caused the damage to your home. That can mean paying two deductibles.
Your insurer may waive one of the deductibles if you have both policies with the same company, so it could be worth thinking about putting all of your policies with one insurer.
Making insurance claims might increase your premium at renewal time as well.
- The driver's insurance should pay for damage if the driver is at fault and has coverage.
- Your homeowner's policy should pay for any damage that exceeds the driver's coverage limit.
- Your auto policy may cover damage caused by you to your own home.
- Making a claim yourself can mean paying a deductible and higher premiums.