Property Damage Liability Insurance – Explained In Simple Terms
Property damage liability insurance is one of the integral parts of your auto insurance policy.
It protects you from paying out of your pocket for any property damage expenses you face in an at-fault car accident.
Most of the states require certain minimum coverage limits for bodily injury and property damage liability.
If you want to learn how much coverage you need, what property damage liability insurance includes, and how much you will pay for it, keep reading!
What is Property Damage Liability Insurance?
Property damage coverage pays for any physical damage that you cause to another person’s property in an at-fault accident.
Note that property damage insurance does not account for your own vehicle, so you might want to read about collision insurance we’ve explained below and learn how to protect your property.
How Does Property Damage Liability Work?
Say that you caused damage in an at-fault accident to another individual’s property, regardless of whether it’s their vehicle or other objects (mailboxes, fences, etc.).
You can use the portion of your car insurance policy – property damage coverage – to pay for the expenses, as long as they are within your coverage limits.
What you’ll need to do is to file a property damage liability claim with your insurance company.
Before you begin the property damage claim process, you should take all the steps needed to record the details of the accident, such as take notes and photos of the damage.
Then, you can report the incident to your insurance company that handles your claim and facilitates the payments that will reimburse your expenses.
Before you receive payment for a claim, you will have to pay for any applicable deductibles you have discussed with the insurer underwriting your policy beforehand, i.e., the issuing insurance carrier of such insurance product.
It’s their sole responsibility to get you acquainted with the insurer’s then-current criteria of the applicable insurance policy as soon as you purchase coverage from them so that you are aware of how you can report any accidents (e.g., some companies require you to call them, while some support claim tools and apps, etc.).
What Does Property Damage Liability Insurance Cover?
Property damage insurance generally encompasses three categories:
Your property damage coverage cover costs that result from damage caused to someone else’s vehicle.
For example, if you accidentally rear-end another driver’s car, your property damage liability will cover the amount up to your property damage liability limits.
This usually translates to repair costs. Vehicle repairs can include anything, from body shop labor to replacement parts that are needed.
Damage that happened to your own car and car repairs are not covered by property damage liability coverage, and you should consider obtaining comprehensive and collision coverage for that purpose.
Damage to Personal Property
Property damage liability coverage also pays for someone else’s property that gets damaged due to an at-fault crash.
A person’s property can include personal assets such as lampposts, mailboxes, and fences, as well as destruction to their house or businesses.
Your auto insurance does not cover your own property damage that occurs in an accident, but it is possible to extend your insurance coverage and include comprehensive and collision insurance that pays for that.
Legal Defense Fees
If there are any attorney or court fees incurred due to a property damage claim, your liability coverage can step in to reimburse the expenses.
What Does Your Property Damage Liability Not Cover?
In addition to property damage liability, you can get additional coverage in your auto insurance policy.
Here’s a brief summary of policy obligations and the most common policy structure when it comes to coverages:
Bodily injury and property damage are required by law in most states.
Bodily injury liability insurance pays for lost income, i.e., lost wages, injuries, medical expenses, and funeral costs of the other party – both for the driver and their passengers.
PIP (Personal Injury Protection)
As BI does not pay for you and your passengers’ medical expenses and lost wages, you want to consider getting PIP insurance that can be used for this purpose.
It can also assist your health insurance when paying for medical bills.
Accidents can cause damage to your car, whether you collide with another vehicle or object (fence, tree, pothole, etc.).
And yet, this isn’t covered by your property damage insurance. Collision insurance is additional coverage in your car insurance policy that pays for repairs or replacement if your vehicle is damaged.
Comprehensive coverage is “everything else” coverage.
It helps pay for anything that isn’t covered by collision and yet can cause damage to your car, from theft, vandalism, and fire to falling objects like hail.
Uninsured and Underinsured
In addition to property damage and bodily injury liability insurance, some states require uninsured and underinsured as state minimums.
This coverage car insurance policy kicks in if you are involved in an accident with someone who doesn’t have enough coverage (or doesn’t have it at all) to pay for damages they caused to you.
The bodily injury portion of this type of coverage also pays for injuries to you and your passengers (or someone else driving your car, provided that they have your permission).
How Much Will I Pay for Property Damage Liability Coverage?
It is difficult to determine the average cost you will pay for your property damage insurance coverage.
An insurance company will assess many different factors to determine the price of your car insurance:
- Whether you get the minimum amount of liability limits or more,
- How financially responsible you are (they’ll consider your credit score),
- Your age,
- Your location,
- Your vehicle,
- Whether you are eligible for any discounts (you can obtain them if you get multiple insurance products from the same company or if you have an outstanding driving record), etc.
So, to help you calculate the price of your auto insurance more easily, we’ve designed a quote calculator. It’s so easy to use – and the best part – it’s completely free!
Get the Cheapest Property Liability Insurance Quotes
Many factors determine how much you will pay for your car insurance policy.
To help you calculate the price of your premium, you can use our quote calculator.
It only takes around a minute to fill in your basic info so that we can generate offers from our insurance carriers.
And we promise not to bother you with any follow-up calls; you decide whether you want to continue with the purchase!
Find the Right Insurance Company for You
Our insurance carriers include over 20 companies that offer the best car insurance products.
Nationwide and Safeco have the widest assortment of products and plenty of opportunities to score a discount, but we allow you to compare offers from many more companies and then decide which one has the best deal for you.
Bundling up home and life insurance in addition to car insurance or insuring multiple vehicles with the same company are just some of the ways to save up.
Students, veterans, and drivers with a positive driving record can get a discount, too – so make sure to tell us about your particular case, and we’ll find a path to discounts for you!
Property Damage Liability Limits
Your liability coverage limits are split, and you’ll find a three-tiered number stating your bodily injury and property damage limits.
For instance, you may see something like 25/50/25. The former two numbers refer to bodily injury limits per person and per accident.
The third number states your property damage liability limit per accident – in this particular case, it would be $25,000.
How Much Property Damage Injury Coverage Do You Need?
Minimum limits might get you legally on the road, but are they enough to cover everything you might need? Not really.
Let’s put it into perspective. Say you accidentally swerve right into a vehicle that is in your blind spot – and it’s a Tesla. Can you imagine how costly the repairs for a Tesla could get?
So, it’s always better to go well above the state minimums and ensure you have enough coverage and that desired peace of mind.
We recommend that you get 100/300/100 coverage – meaning $100,000 BI per person and property damage, and $300,000 total per accident. In our experience, this is what adequately protects most families out there.
You can also get an umbrella policy that covers the rest of the expenses once you reach your limits.
Of course, the needs of our clients can vary greatly, and we want to find you a tailored policy. So, reach out to Insurance Geek today and let us know how we can help you find affordable insurance!
Minimum Required Property Damage Liability By State
As mentioned before, most states have a minimum amount of bodily injury and property damage that you are required to have by law.
According to the Insurance Information Institute, these are the state’s minimum limits for property damage in every state in the U.S.:
- Alabama: $25,000
- Alaska: $25,000
- Arizona: $10,000
- Arkansas: $25,000
- Caifornia: $5,000
- Colorado: $15,000
- Connecticut: $25,000
- Delaware: $10,000
- DC: $10,000
- Florida: $10,000
- Georgia: $25,000
- Hawaii: $10,000
- Idaho: $15,000
- Illinois: $20,000
- Indiana: $25,000
- Iowa: $15,000
- Kansas: $25,000
- Kentucky: $25,000
- Louisiana: $25,000
- Maine: $25,000
- Maryland: $15,000
- Massachusetts: $5,000
- Michigan: $10,000
- Minnesota: $10,000
- Mississippi: $25,000
- Missouri: $25,000
- Montana: $20,000
- Nebraska: $25,000
- Nevada: $20,000
- New Hampshire: $25,000
- New Jersey: $5,000
- New Mexico: $20,000
- New York: $10,000
- North Carolina: $25,000
- North Dakota: $25,000
- Ohio: $25,000
- Oklahoma: $25,000
- Oregon: $20,000
- Pennsylvania: $5,000
- Rhode Island: $25,000
- South Carolina: $25,000
- South Dakota: $25,000
- Tennessee: $15,000
- Texas: $25,000
- Utah: $15,000
- Vermont: $10,000
- Virginia: $20,000
- Washington: $10,000
- West Virginia: $25,000
- Winsconsin: $10,000
- Wyoming: $20,000
Property Damage Liability Calculator