Property Coverage under Auto Insurance Policies

While statistics on the deaths and personal injuries caused by motor vehicle accidents are understandably the most vivid and immediate reminders of the societal costs incident to the extensive use of cars and trucks in the United States, property damage resulting from vehicular accidents in this country has its own significant economic impact. Motor vehicle insurance policies accordingly contain numerous provisions dealing with various kinds of property damage and loss.

Overview of Automotive Products Liability Law

The everyday operation of millions of cars and trucks on the streets and highways of the United States, and the massive resulting toll in deaths, personal injuries, and property damage caused by motor vehicle accidents, have inevitably created a situation in which the manufacturers and sellers of motor vehicles are implicated as potential defendants in legal actions seeking compensation for the losses arising from such accidents. Products liability law, a subset of the branch of the legal system called tort law, provides the legal standards for determining the potential liability of motor vehicle manufacturers and their dealers in such cases. (The principles of products liability law also apply to non-automotive products, but our discussion here will focus on the law of products liability as it relates to motor vehicles.)

Collision Coverage

Under the collision coverage provision of a policy, an insurer agrees to pay an insured for damage to a covered vehicle caused by an accidental occurrence that is typically described as involving a "collision" or an "upset."

Auto Insurance Coverage for Newly Acquired Vehicles

When a vehicle owner has an automobile insurance policy and acquires a new vehicle, the new vehicle will be automatically covered to the same extent and policy amounts as the insured's other insured vehicles, if the insurance policy has a provision for newly acquired vehicles. A newly acquired vehicle can be a replacement vehicle or an additional vehicle. The term also includes purchased and leased vehicles.

Punitive Damages in Automotive Products Liability Actions

A plaintiff in an automotive products liability action is generally required to prove that a motor vehicle as sold contained a defect in its design, in the way in which it was manufactured or assembled, or in the failure to warn of a risk inherent in its operation that created an unreasonable risk of death, personal injury, or property damage when the vehicle was used for its intended purpose and that the defect caused an accident or similar incident, such as a vehicle fire, that resulted in the loss or damage for which the plaintiff seeks to recover damages. Because proof of the existence of such conditions does not involve passing judgment on the conduct of the manufacturer, but merely on the status of the vehicle as sold, the plaintiff in such a case can ordinarily recover only his or her actual damages, which can include economic losses and damages for non-economic losses based on the jury's determination of the dollar value of the pain and suffering resulting from the accident. Sometimes, though, the manufacturer's conduct in dealing with the alleged vehicle defect becomes an issue in the case, and the plaintiff may then attempt to recover punitive damages in addition to the actual damages suffered.