Vehicles crash into buildings and houses more often than you’d think. Every day, 60 people in the United States crash into retail and office buildings, and most of those accidents are caused by an inexperienced or older driver accidentally hitting the gas. Some unfortunate homeowners have had their homes crashed into half a dozen times or more.
If such a scenario were to happen in your home or place of work, how would you proceed? Does the driver's insurance company pay? 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 concerning vehicle accidents: the party at fault is liable for any damages caused by that accident. So, if a vehicle crashes into your home, and the crash was the driver's fault, then they are on the hook for the damages caused to your home (or any other property, for that matter). It is where the property damage clause of an auto policy comes into play—up to the limit in the policy.
For example, say a vehicle crashes into your home and causes $20,000 in damage. The at-fault driver's auto policy has a property damage coverage limit of $25,000. In this case, your damages should be fully paid for through the driver's policy. So what happens if the driver's coverage limit is $25,000 and your home suffers $50,000 in damages?
Your Homeowner's Policy
A typical standard homeowner's policy protects the policyholder for damages to their dwelling and connected structures (like a garage) caused by such hazards as fire, smoke, theft, vandalism, windstorm, and other things, including vehicles. Most standard homeowner's policies explicitly list "vehicles" among those damage-causing hazards covered.
Read your homeowner's policy to make sure it specifically covers damages due to vehicles. If you don't see "vehicles" listed or you have any questions regarding the subject, be sure to contact your agent ASAP.
If your house is damaged by an uninsured driver, your homeowner's policy remains the solution.
What If You Damage Your Home?
Maybe you backed out of your garage with the door closed or gunned it too close to an exterior wall. But either way, you might be surprised to learn that, in general, the same rules apply as when someone else crashes into your home. You will have to make a claim on your auto policy for any damages to your vehicle but, in most cases, you'll make a claim on your homeowner's policy for the damages to your dwelling. Again, it's important to read your policy carefully to be sure you are covered in this particular circumstance.
Since most homeowner's policies come with a relatively high deductible, making a claim can be expensive. It may not be worth it if the damages to your home are minimal. Also, if your vehicle caused the damage to your home, you will likely be making claims on both your auto and homeowner's policies, and that can mean paying two deductibles. If you have both policies with the same insurance company, however, the insurer may waive one of the deductibles. So, it's worth considering putting all of your policies with one company.
Remember that making insurance claims is likely to increase your premium at renewal time.