Bad Luck or Bad Policy: What Happens if You Crash Into Literally a Gold-Plated Car?
Should you be responsible for the types of cars your friends and neighbors drive? Should you have to worry about losing your house if the guy down the street suffering through a mid-life crisis goes out and buys a Bugatti?
I don't think so. And that is why liability for automobile property damage should be capped.
Accidents can happen anytime, anywhere, with anyone. After all, 5.7 million of them happen across the country each year – one roughly every six seconds. Now let's imagine that you are one of these statistics. You're on your way home from work one day – tired and grumpy – and you look down to change the radio station when, wham, you crash into the car in front of you. But this isn't just any car. Luck's possession arrow is pointing away from you today and you happen to have inflicted some serious damage on someone's golden car. Yes, it was the multi-millionaire down the street or someone on the way to a rap video shoot, and the car was indeed gold-plated.
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Well, guess what? It's your responsibility to pay for the repairs! If you're lucky, you'll have some form of property damage liability coverage. But the average driver's policy only covers a modest amount of repairs. The rest has to come out of pocket. And if you're paying to fix a gold-plated car, or any other luxury vehicle, coming up with the requisite cash is going to be a very tall task – no matter how minor the damage actually is.
This is when assets are sold, second mortgages are taken out and lawsuits are filed. The owner of the vehicle involved in the crash has little choice but to sue if you cannot fully pay for the damage inflicted. All of this because you lost the car accident lottery, crashing into a gold-plated car – or its practical equivalent – rather than a Jetta or something.
The question is, are you comfortable with this environment? Do you want to worry about the chances of getting into an accident with the wrong car and suffering severe financial consequences? Do you want to be forced to incorporate the cars that your neighbors drive into your decision regarding how much insurance coverage to pay for?
I don't think any of us want any of those things. So, what can we do about it?
The ideal solution would be to petition your local officials to apply a maximum limit to motorist liability for vehicle property damage. This would ensure a more predictable environment in which certain drivers are not asked to shoulder the risk incorporated with the car buying decisions of others. In the meantime, the more practical advice would be to purchase the maximum amount of property damage liability coverage that you can afford, as you never know what luck has in store for you on the road.
After all, I care little if the mid-life crisis guy goes out and buys an expensive car – aside from the potential recklessness of the spending. I just don't want his choice to carry any unnecessary implications for my wallet.
