That’s a tricky question.

Yes, underinsured motorist insurance can cover property damage expenses in certain situations. Some auto insurance companies lump underinsured property damage and bodily liability coverage under the broad heading of underinsured motorist coverage. With these companies, as long as you have underinsured motorist insurance, you’re protected when it comes to property damage.

However, most car insurance carriers separate the two coverages. With these companies, you must specifically request underinsured motorist property damage coverage in order to receive property damage protection. Otherwise, if you only have underinsured motorist bodily injury coverage, you won’t have it.

What is Underinsured Property Damage Coverage?

This type of auto liability insurance kicks in after your vehicle sustains damage from a car accident. If the other driver caused the accident and carried an inadequate amount of property damage insurance to pay your full repair bills, your insurance would take care of the rest (up to your policy limits).

So, let’s say your car suffered $18,000 of damage in an accident. The other driver only had $15,000 of property damage insurance. Your insurance company would pay the $3000 difference.

Keep in mind this type of insurance doesn't pay for medical costs due to any injuries sustained by your or your passengers in the auto accident. Underinsured bodily injury coverage takes care of these expenses.

Will My Car Insurance Premiums Go Up?

No. In most cases, your premiums should not go up just because you applied your underinsured motorist coverage, even though your insurer had to pay for some of the repairs.

Is Underinsured Property Damage Insurance Required?

Yes, in many states drivers must carry this form of insurance. Check your state's DMV site to see if you must have it.