Can You Collect Property Damage Insurance on Property You Do Not Own?

Let’s say you’re driving around in your car, truck, or van and another vehicle hits you—BOOM. The impact from the collision damages your vehicle. Maybe it needs a few repairs, or maybe it is totaled. The damage your vehicle has sustained from the crash is called “property damage.”

It is important to call your insurance company right away to inform it of the accident and to report your property damage claim. Once your claim has been reported, the insurance will usually begin its investigation. Until the insurance company has completed processing your property damage claim, you would be wise not to sell or transfer title to your vehicle. The insurance company will need to investigate and assess the damage to your vehicle, which often involves taking pictures and sending their own investigators to provide estimates of the damage done to your vehicle.

It might be tempting to sell your damaged car right away so that you can quickly find a replacement vehicle or other form of transportation, but doing so can wind up hurting you. It can delay your claim, or worse. For example, say your vehicle is a total loss. Assuming you are the title holder of your vehicle, the insurance company typically pays what the fair market value of the vehicle was before the collision and, in exchange, is given title to your vehicle—in essence, the insurance company is buying the vehicle from you. Selling or transferring title to your damaged car before your property damage claim has been processed can prevent you from getting the total loss check from the insurance because you are no longer the one who holds title to the vehicle. … We have never witnessed an insurance company pay a property damage claim on property where title is transferred before the claim is paid.