What Is Property Damage?

Getting compensation from the insurance company or the at-fault party when your property is damaged or destroyed.

By , J.D. · University of San Francisco School of Law
  • A property damage claim can involve things large (your home or vehicle) or small (your smartphone or jewelry).
  • Insurance coverage is often central to a property damage claim, but a lawsuit might be possible if someone else caused the damage.
  • Property damage compensation often includes repair or replacement, plus recovery for secondary financial losses.
  • It usually makes sense to handle your own property damage claim, but some situations might call for an attorney's help.

What Is a Property Damage Claim?

A property damage claim can be made through an insurance policy or through the court process (including small claims court). Either way, the owner can get compensation for damage to—or total destruction of—their property, and other related financial losses.

Almost any kind of property damage scenario you can think of can give rise to this kind of claim. For example:

  • Your neighbor's tree falls on the roof of your garage, damaging the structure and "totaling" your car.
  • You're waiting at a red light when another driver rear-ends you, causing thousands of dollars' worth of damage to your vehicle.
  • You slip and fall on a wet floor in the grocery store and land on your backside, breaking your phone, which was in your back pocket.

Jump Ahead

Insurance Plays a Big Role In Most Property Damage Claims

A key issue in most property damage situations is whether there's an insurance policy that might apply to cover repair or replacement of the property. This could mean your own insurance policy (if you're the property owner) or someone else's coverage (if they caused the damage).

When Does Your Own Insurance Cover a Property Damage Claim?

When your own insurance covers damage to your property, it's usually through:

It's important to check the details of your policy or talk with an insurance company representative to see what's covered and what's not in terms of your property. If your loss is covered, it's time to decide whether or not you want to make a claim.

The downsides to making a claim under your own insurance coverage usually include:

  • you'll likely have to pay a deductible, and
  • your premiums (the amount you pay to be covered by your insurer) may go up.

But in many situations, a claim through your own insurance coverage is your best (or only) option if you want to get your property repaired or replaced. And remember, this is why you purchased insurance coverage in the first place.

Example: Your Neighbor's Tree Falls Onto Your Property

Similar to the example we laid out earlier, let's say that in a serious windstorm, your neighbor's large oak tree is uprooted, topples over, and lands on the roof of your garage, damaging the structure and "totaling" your car, which was parked inside. Here:

  • You'll probably be able to make a claim under your own homeowner's insurance for the damage to your garage.
  • The damage to your vehicle would be covered under "comprehensive" car insurance coverage, if you have it. (Note that this kind of coverage is always optional, unless you're leasing or financing your vehicle.)

The neighbor probably can't be held responsible for the damage resulting from the fallen tree, since this would typically be considered an "Act of God" unless you can show that their negligence played a part in the incident. For example, if the tree represented a known hazard, and local officials had ordered it removed prior to its falling, you probably have a pretty good case against your neighbor. Learn more about Neighbors, Trees, and the Law.

Example: You Swerve to Avoid a Deer and Crash Into a Tree

Here, since no one else is at fault for the accident, you could make a claim under your own car insurance policy, but only if you have "collision" coverage. No other type of car insurance is going to apply to damage to your vehicle in this scenario, so without collision coverage you're probably going to be left to pay out of pocket to get your car fixed.

What If Your Property Damage Was Someone Else's Fault?

If someone else' carelessness or negligence caused your property damage, you might have more options than just trying to use your own insurance coverage (if you have it) to pay for the repair or replacement of your property.

Example: Car Accident Resulting In Vehicle Damage

The most common scenario here is a car accident, like the one included in the example above, where another driver rear-ends your car at a stoplight, causing extensive damage to your vehicle.

Since, in one form or another, car insurance is required in nearly every state, chances are the driver who hit you will have liability property damage insurance coverage. Here, you could make a third party claim with their car insurance company, and hopefully the total cost to repair or replace your vehicle will be within their coverage limits. Learn more about making a third party insurance claim after a car accident.

Example: You Fall In a Store, Breaking Your Phone

A leak from a refrigeration unit in the store's dairy section leaves a puddle on the tiled floor, causing you to slip and fall. Here, the store's commercial liability insurance coverage will apply to your accident, and that means any personal injury or property damage resulting from the fall will be part of your claim against the store. Learn more about making a claim for an in-store slip and fall.

How Do I Make a Property Damage Claim?

The examples we've discussed so far are just a few common situations that can lead to a property damage claim. But there are as many possibilities here as there are kinds of property and types of mishaps. What happens in these situations is very fact-specific, and dependent on whether there is insurance coverage in play (plus the details of the coverage).

If someone's insurance policy does cover the incident that led to the property damage, the claim process might look like this:

  • you report the incident to the insurance company (usually over the phone or through the insurance company's online claim filing portal)
  • the insurance company investigates the incident to determine the cause of the property damage, and the nature and extent of the damage
  • you and the insurance company decide on how to get an estimate (or two or three) of the extent of the damage, and the cost to repair or replace it, and
  • the insurance company will issue you a check for an amount covers the property repair or replacement cost, plus any secondary expenses you've incurred because of your inability to use your property.

Can I Get My Deductible Back If Someone Else Was At Fault?

If you make a property damage claim with your own insurance company—through your homeowner's insurance or your car insurance collision coverage, for example—and it turns out that someone else was at fault for the damage, your own insurance company might pay out on your claim and turn around and seek reimbursement from:

  • the at-fault party's insurance company (if a policy applies to the incident) or
  • from the at-fault party themselves.

In this situation, your insurance company might also be able to recover any deductible you paid as part of the claim process, but it's not a guarantee.

Property Damage Might Only Be Part of the Claim Picture

Remember that if the incident that led to your property damage also caused you personal injury, or if there are other complications, the claim process is sure to look different, and a lot more might be at stake. In situations like this, you might want to talk with an experienced legal professional. More on this later on.

What If I Disagree With the Insurance Company's Valuation or Repair Estimate?

Whether it's the proposed cost to repair your property or the value placed on it, if the insurance company's numbers seem inaccurate to you, the insurer's position doesn't have to be the last word. It might help to think of the repair estimate or the valuation as a point of settlement negotiation, but as with most other kinds of negotiation, you need to be able to back up your position with documentation.

Depending on the specifics of your property damage claim, that might mean:

  • getting your own independent repair estimate from a reputable company
  • producing receipts, photographs, or other evidence of customization, add-ons, or other improvements you made to the property, or
  • bringing in any other kind of solid evidence to show that the insurance company's numbers are off the mark.

Can I File a Lawsuit Over Property Damage?

A property damage incident can end up in court—meaning the property owner files a lawsuit against the person or business who caused the damage—in a number of situations, including if:

  • no insurance policy applies to the incident that led to the property damage, and someone else is at fault, or
  • the property owner has made an insurance claim but doesn't think they're being offered a fair result from the insurer.

If you're the property owner in this scenario, the big question here is whether it's going to be worth the time, effort, and expense of going to court, in light of:

  • what you've actually lost (the extent of the property damage)
  • the likelihood that the lawsuit will end favorably for you, and
  • whether you can actually collect any money the court orders the at-fault party to pay you.

Learn more about when you should sue and collecting a court judgment.

What's the Statute of Limitations for Property Damage Lawsuits?

A "statute of limitations" is a law that sets a time limit on your right to file a lawsuit in court. Every state has these kinds of laws, which set different deadlines based on the kind of case being filed.

Most states have one statute of limitations deadline that applies to all property damage lawsuits, regardless of the type of property that's involved. California, New York, and Texas are included in this group.

In a few states (like Colorado and Wisconsin), there's one statute of limitations dedicated to vehicle damage lawsuits, and another that applies to lawsuits over damage to most other kinds of property.

In still more states (including Ohio), the statute of limitations that applies to a property damage lawsuit will depend on whether the harm was done to "real" or "personal" property:

  • What Is "Real" Property? In the language of the law, "real property" typically includes land that's owned by someone, and any permanent structure that's built on or attached to land. So that includes a house, a commercial building, a shed, a fence, and most other structures. It can also include trees and anything that's planted on land, including crops.
  • What Is Personal Property? Personal property is almost any tangible item that isn't considered real property. Everything from a pair of earrings to a pickup truck would be considered personal property. This category of property also includes investments, retirement accounts, and intellectual property like patents and registered trademarks.

Get the details on the property damage statute of limitations in your state.

Taking a Property Damage Case to Small Claims Court

If your property damage isn't extensive, or if the value of the property wasn't significant in the first place, you might consider bringing your case to your state's small claims courts if you're intent on taking legal action against the at-fault party. The big consideration here is whether the overall value of your losses ("damages" in the language of the law) is within the court's dollar limit. Get the details on small claims court limits and small claims court rules in your state.

What Kinds of Compensation Can I Get for Property Damage?

Your options for getting compensation through a property damage claim depend on a wide variety of variables, including:

  • the extent of the damage weighed against the value of the property at the time of the incident
  • the terms of any applicable insurance coverage (if you're making an insurance claim)
  • the assets available to the person who caused the property damage, and
  • the details of the law in your state (if you're filing a lawsuit).

But in general, a property damage claim can include compensation that's based on:

  • the "actual cash value" of the property at the time of the incident (i.e. if your vehicle is damaged and it's declared a "total loss")
  • the cost to buy a new version of the item ("replacement cost"), or
  • the cost of repairing the property.

You might also be able to recover compensation for any secondary financial harm that resulted from the damage to the property. That might include:

  • the cost of staying in a hotel if damage to your home makes it uninhabitable
  • the cost of renting a car while your own vehicle is in the shop, and
  • income you've lost that's provably linked to your inability to use the damaged or destroyed property.

Do I Need an Attorney for a Property Damage Claim?

If your property damage claim is fairly straightforward, and you're not running into any major issues in dealing with the insurance company or the at-fault party, it might make the most sense to handle the matter on your own and see if you can come away with a satisfactory result. Practically speaking:

  • paying for an attorney's services might not make financial sense given the likely overall value of your claim, and
  • you may even run into problems getting a lawyer to take a run-of-the-mill property damage claim.

But there are some situations where it may be a good idea to at least reach out to an experienced lawyer and discuss your options.

If Your Case Involves Both Personal Injuries and Property Damage

Returning to the rear-end car accident scenario we discussed above, if you suffer significant injuries as a result of the accident, alongside your vehicle damage, things are going to get more complicated, and there's simply going to be more at stake. Especially where someone else was clearly at fault for what happened, and your injuries are significant, it might be worth it to contact a personal injury lawyer and talk to them about your situation.

If the Insurance Company Might Be Acting In "Bad Faith"

When it comes to everything from the valuation of your property to issuing your check, an insurance company has a legal duty to avoid acting in "bad faith" when handling your claim. If something about the insurance adjuster's behavior seems particularly outlandish or unprofessional to you, and it's preventing you from getting a fair resolution to your claim, it might make sense to reach out to an experienced legal professional. Learn more about bad faith insurance claims and get tips on finding the right lawyer for you and your case.

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