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What Does Property Damage Liability Cover?

Property damage liability insurance is a type of automotive liability coverage that pays for the costs associated with another person's vehicle or property due to a car accident you cause. Limit requirements differ in every state as does the cost for this coverage. You can, of course, get higher limits than what your state requires, providing an extra layer of protection should you cause a car accident. If you do cause an accident, the damaged party will file a claim with your insurance company, which will pay for losses. Keep in mind that property damage will cover medical fees and legal fees or damages to your own car. Keep reading to see what property damage liability insurance is and how it works.

What is Property Damage Liability Insurance?

Property damage liability insurance is a component of required coverage on your auto insurance policy that helps pay for damages you cause to someone else's vehicle or property. Other property could include fences or building fronts. Property damage liability coverage does not cover damage to your own vehicle. However, you can buy collision coverage to protect your car.

Most states require a minimum amount of liability coverage. These mandatory coverage limits vary from one state to another. New York drivers, for example, are required to have at least $10,000 of liability coverage. Alabama has a minimum limit of $25,000. Virginia has a $20,000 limit with an option to waive the insurance requirement with a $500 fee. New Hampshire doesn't require auto insurance at all. You will be able to choose your coverage limits when you purchase car insurance. You can also adjust your limits later with the help of an insurance agent if you choose. Consider how expensive car repairs can be when choosing a liability limit, because you may still be on the hook for a remaining balance if you're underinsured.

What's Covered With Property Damage Insurance?

Property damage insurance covers any damage you cause to another person's vehicle or property. These include:

  • Repairs for any damage caused to another's vehicle

  • Repairing damage to fences, houses, lampposts, mailboxes, etc.

Understand that your property damage liability insurance will not cover the medical expenses of someone who was hurt by an accident you caused. Bodily injury liability coverage, which is also required, would cover those costs.

Property damage liability insurance helps pay for damages you cause to someone else's vehicle or property.

Property Damage Insurance Requirements by State

Each state has its own minimum requirements for damage liability insurance. New Hampshire does not require drivers to own auto insurance of any kind. However, the costs fall directly on the driver without insurance if an accident occurs. Virginia allows drivers to choose between owning auto insurance or paying a $500 Uninsured Motorists Vehicle (UMV) fee which offers no coverage. Again, the costs due to an accident land squarely on the driver's shoulders if there is no insurance.

State

Minimum Coverage

State

Minimum Coverage

Alabama

$25,000

Montana

$20,000

Alaska

$25,000

Nebraska

$25,000

Arizona

$10,000

Nevada

$25,000

Arkansas

$25,000

New Hampshire

$25,000 (Not required)

California

$5,000

New Jersey

$5,000

Colorado

$15,000

New Mexico

$10,000

Connecticut

$20,000

New York

$10,000

Delaware

$10,000

North Carolina

$25,000

Florida

$10,000

North Dakota

$25,000

Georgia

$25,000

Ohio

$25,000

Hawaii

$10,000

Oklahoma

$25,000

Idaho

$15,000

Oregon

$20,000

Illinois

$20,000

Pennsylvania

$5,000

Indiana

$25,000

Rhode Island

$25,000

Iowa

$15,000

South Carolina

$25,000

Kansas

$25,000

South Dakota

$25,000

Kentucky

$25,000

Tennessee

$15,000

Louisiana

$25,000

Texas

$25,000

Maine

$25,000

Utah

$15,000

Maryland

$15,000

Vermont

$10,000

Massachusetts

$5,000

Virginia

$20,000

Michigan

$10,000

Washington

$10,000

Minnesota

$10,000

West Virginia

$25,000

Mississippi

$25,000

Wisconsin

$10,000

Missouri

$25,000

Wyoming

$20,000

Each state has its own minimum requirements for damage liability insurance.

How Much Does Property Damage Liability Insurance Coverage Cost?

The cost of insurance varies across the country. Below is a list of the average monthly premium rates for each state:

State

Liability Cost

State

Liability Cost

Alabama

$59.05

Montana

$47.22

Alaska

$69.89

Nebraska

$38.52

Arizona

$65.96

Nevada

$93.69

Arkansas

$55.99

New Hampshire

$52.90

California

$83.09

New Jersey

$120.84

Colorado

$65.76

New Mexico

$67.65

Connecticut

$93.57

New York

$126.15

Delaware

$79.54

North Carolina

$46.25

Florida

$134.26

North Dakota

$41.67

Georgia

$91.07

Ohio

$46.67

Hawaii

$56.07

Oklahoma

$72.45

Idaho

$39.58

Oregon

$67.89

Illinois

$60.81

Pennsylvania

$55.12

Indiana

$43.81

Rhode Island

$108.75

Iowa

$39.51

South Carolina

$64.80

Kansas

$49.32

South Dakota

$41.33

Kentucky

$65.67

Tennessee

$62.96

Louisiana

$133.98

Texas

$80.61

Maine

$38.81

Utah

$66.05

Maryland

$102.86

Vermont

$42.62

Massachusetts

$60.33

Virginia

$54.87

Michigan

$93.51

Washington

$64.35

Minnesota

$56.62

West Virginia

$67.31

Mississippi

$67.63

Wisconsin

$43.38

Missouri

$56.67

Wyoming

$41.07

Property Damage Liability Insurance Coverage

How Much Liability Coverage Do I Need?

How much liability insurance you need depends on your needs and your state's requirements. The average damage liability claim is well over several thousand dollars. The average claim in 2020 was $4,711. Fortunately, this was covered by the minimum required damage limits for every state. However, this doesn't necessarily mean you should forgo extra coverage. It's always better to err on the side of caution. Below are the average property damage claims between 2011 and 2020.

Year

Average Property Damage Claim

2011

$2,958

2012

$3,073

2013

$3,231

2014

$3,516

2015

$3,628

2016

$3,843

2017

$3,933

2018

$4,165

2019

$4,331

2020

$4,711

Liability insurance is an umbrella term that encompasses both bodily injury liability insurance and property damage liability insurance.

How To File a Property Damage Liability Claim

If you are the victim of a car accident, you can file a claim with the offending driver's insurance company. Below are steps you should take when filing a claim:

  • Exchange insurance information with the offending driver

  • Take photographs of any damage caused to your vehicle

  • File a police report with a law enforcement officer

  • Contact your insurance company and notify them of the accident

  • Contact the offending driver's insurance company and file a claim

Once this is done, the offending person's insurance company will launch their own investigation.

If you are the person who caused the accident, you won't have to file a property damage liability claim. Instead, the damaged party will file a claim with your insurance company. Even if you did cause the accident you should still:

  • Contact your insurance company and notify them of the accident

  • Notify the DMV if,

    • The car accident resulted in an injury

    • The car accident resulted in a death

      or

    • The car accident resulted in property damage in excess of the state's limit. Limits vary by state

Are There Property Damage Liability Coverage Restrictions?

Property damage liability insurance only covers damage caused to another person's vehicle or property if you were at fault. It won't cover any damages that you or your property incurs. You will need additional coverage such as collision coverage and personal injury protection (PIP). Keep in mind that when you buy liability insurance, it not only comes with personal damage liability coverage but bodily injury liability coverage as well. Bodily injury liability coverage will help pay for funeral costs, legal fees, lost wages, or any long-term physical pain or emotional suffering the damaged party may have incurred. Keep in mind that your liability insurance has limits. This means it will only cover a certain dollar amount. It is likely up to you to pay whatever remains if this happens.

Is Property Damage Liability Important?

Property damage liability is important because it covers vehicle or property damage you may cause in an automotive accident. Without liability insurance, you may have to pay out-of-pocket for any car or property damage. Since property damage liability coverage is also required in most states, it is important in following law.

Property damage liability won’t cover any damages that you or your property incurs.

Liability Insurance FAQs

What's the difference between liability and property damage?

Liability insurance is an umbrella term that encompasses both bodily injury liability insurance and property damage liability insurance. Both types of coverage are designed to cover the costs a damaged party has associated with automotive accidents that you cause.

What's the difference between bodily injury liability insurance and property damage liability insurance?

Bodily injury liability insurance specifically covers the medical and legal costs of a wounded individual associated with a car accident you cause. Property damage liability insurance covers damage you cause to another's vehicle or property.

Avoid Paying Out-of-Pocket

Property damage liability coverage is a type of liability insurance that covers the costs associated with damages you cause in a car accident. It specifically covers the other person's vehicle or property. Keep in mind that the cost of damage liability coverage and the required limits for a policy differ from state to state. If you are looking to save money on a new car insurance policy, enter your zip code below and fill out a quick questionnaire to receive free auto insurance quotes for the lowest rates in your area.

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