What is Property Damage Liability Insurance?
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Along with bodily injury liability coverage, property damage coverage is one of the two parts that make up liability insurance. If cause a car accident, property damage liability covers damage to another person’s property, such as their vehicle.
Even if no one is injured in a car accident, property damage can still be more expensive than you think. Repairs are getting more expensive, too, because of all the sensors and technology included in new cars. When someone else’s vehicle is damaged in an accident for which you are at fault, your property damage liability insurance kicks in.
In this article, we’ll go over what property damage liability insurance covers and how much you need. Do you want to change your current policy for better coverage? Start by entering your ZIP code below to compare quotes from dozens of auto insurance companies:
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What is Property Damage Liability?
Property damage liability is the often-overlooked part of your car insurance that pays for damage to other people’s property from an accident you’re responsible for. Most often, it’s paying to repair another person’s vehicle, but it could also pay for damage to a garage door, a mailbox, a bicycle, a fence, or some other piece of property.
If you’re in an at-fault accident in which you damage someone else’s property, the property owner will file a claim with your insurance company for the amount of the damage, then get a check directly from the company. If the claim is for more than your insurance covers, you may be responsible for paying the rest.
Is Property Damage Liability Insurance Required?
Along with bodily injury liability insurance, property damage liability insurance is required in almost all states. These two types of liability insurance form the foundation of most typical auto insurance policies. While other types of coverage, like collision insurance or comprehensive insurance, are often optional, liability car insurance is usually mandatory.
The minimum coverage amount required varies by state, but you may consider purchasing additional coverage if you can afford it.
How Much Property Damage Liability Coverage Do I Need?
How much property damage liability coverage you need depends on where you live. Almost every state requires drivers to carry a minimum amount of property damage liability. The exact amount varies widely, from $5,000 in states like California, Massachusetts, New Jersey, and Pennsylvania, to $25,000 in states like Maine, North Carolina, and Kentucky.
If you’re trying to keep your overall insurance premium low, you can opt for the state minimum property damage insurance. And that might be plenty! In 2021, the average auto insurance claim for property damage was $5,314. Also, just 2.3% of people with liability insurance had a property damage liability claim that year, according to III.
However, in many cases, playing it safe and purchasing additional property damage insurance coverage can pay off. The average new car costs more than $48,000 in 2023. So if you cause an accident that totals or extensively damages two newer cars, you could be looking at claims that go way beyond what minimum property damage insurance will cover.
You may want a policy with more than the state minimum coverage if you live in a busy urban area where tight parking and heavy traffic make it more likely you’ll hit someone’s car. You may also want additional coverage if you have assets to protect and want the peace of mind of having solid insurance protection.
A good general rule of thumb is to set your liability limits at $100,000 in property damage liability insurance per accident, $100,000 in bodily injury liability insurance per person, and $300,000 in bodily liability insurance per accident.
Does Property Damage Liability Cover Damage to My Own Car?
Property damage liability does not cover damage to your own vehicle caused by an at-fault accident (that’s covered by collision coverage, which is usually optional). If your car is damaged by some other circumstance, such as a hurricane, flood, hailstorm, or collision with a deer, comprehensive coverage will cover that type of damage. If you’re in an accident where you’re not at fault, you’ll need to file a claim with the other person’s insurance company.
Property Damage Coverage vs. Uninsured Motorist Property Damage Coverage
Uninsured motorist property damage, or UMPD, is a type of uninsured or underinsured motorist coverage. This type of insurance covers property damage that occurs if your vehicle is damaged by someone uninsured or underinsured. UMPD can also cover property damage caused by a hit-and-run driver.
While property damage liability coverage covers damage to someone else’s property if you’re in an accident, UMPD works in the other direction, covering your own vehicle if someone without insurance hits your car.
UMPD typically comes bundled with UMBI, or uninsured motorist bodily injury coverage, as part of an uninsured/underinsured motorist insurance policy. Some states require UMPD, some states make it optional, and others don’t offer it at all. Uninsured motorist property damage coverage also overlaps with collision coverage, so you may not need both types of coverage.
Other Types of Car Insurance to Consider
In most states, if you own a car, you’ll need to purchase property damage liability insurance as part of your car insurance policy. There may also be other types of insurance that you must include in your policy. And even if they’re not required, a few types of coverage are still a good idea. Here are some other common types of auto insurance:
- Bodily injury liability insurance: Along with property damage liability insurance, bodily injury liability insurance is almost always required. It covers injuries and medical expenses for the other party in an accident.
- Uninsured or underinsured motorist coverage: This type of coverage covers accidents where the other driver is uninsured or has inadequate insurance coverage. It’s required in some, but not all, states.
- Personal injury protection insurance: Also called PIP, this insurance covers medical bills regardless of who is at fault.
- Collision coverage: Usually optional, collision coverage covers damage to your own vehicle if you’re in an accident.
- Comprehensive coverage: Also optional, comprehensive coverage covers non-accident damage, like theft, vandalism, or natural disasters.
How Can I Find Cheap Property Damage Car Insurance?
Property damage liability typically isn’t sold on its own. It comes as a package with bodily injury liability (the part of your auto insurance that pays for other people’s medical bills). The best way to find the most affordable insurance is to shop around and compare personalized quotes from multiple insurance providers.
Before you begin comparison shopping, you’ll need to decide exactly what types of insurance you need and what you want your coverage limits and deductibles to be. When determining how much coverage you need, you may want to go above and beyond your state’s insurance requirements.
The more car insurance you purchase, the better coverage you’ll have in case of an accident. But more isn’t necessarily better; if you have an older vehicle, drive infrequently, or would rather pay for the cost of repairs out of pocket, lower coverage limits may be worth considering.
Once you’ve decided what type and how much car insurance coverage you need, you can use a tool like Compare.com to quickly and easily compare auto insurance rates from different providers. Just enter some basic information about yourself and your vehicle, and browse personalized quotes in just a few minutes!
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