Getting into a car accident is a major inconvenience and can be expensive—especially if you caused the crash. If your car is damaged, your collision insurance will cover the cost of repairs. But what about the other person’s car? That’s where property damage liability coverage comes into play.
Keep reading to learn what property damage liability covers, how much it costs, and how much coverage you need.
What is property damage liability?
Property damage liability is automatically included in your car insurance policy. It covers your financial liability if you get into an accident that damages someone else’s property.
Instead of paying out-of-pocket for the repairs, your property damage liability will cover it. This coverage is legally required in almost every state.
What does property damage liability cover?
Property damage liability covers another person’s property if you get into an accident and cause damage. It covers property including cars, houses, fences, mailboxes and business store fronts. It also covers public property, like light poles or road signs, that might get damaged in an accident.
Depending on your policy, this type of coverage can also cover your legal fees if you get involved in a major property damage claim and have to go to court. If you crash into a business store front and it has to close for repairs, your insurance can also cover the owner’s lost income.
Property damage liability coverage does not cover your own losses, like vehicle damages or medical bills. It specifically covers other people’s property. If your car is damaged in an accident, or if you need medical treatment, your collision, comprehensive and medical payments insurance will cover the costs.
Who needs property damage coverage?
Ultimately, every driver needs to have property damage insurance, with the exception of drivers in New Hampshire (car insurance isn’t required there). Additionally, every state has different minimum requirements for car insurance, including property damage coverage.
For example, drivers in Massachusetts are required to carry a minimum of $5,000 in property damage liability coverage. Drivers in Alabama are required to have at least $25,000 in property damage coverage. Regardless of how often you drive, you’re legally required to carry the minimum amount of coverage where you live.
How much does property damage coverage cost?
The cost of property damage insurance depends on your car insurance premium because it’s automatically included. However, certain criteria like your age, state, claims history, credit score and the type of car you drive can all impact your rate. Another thing that affects the cost of property damage liability is the amount of coverage you have.
How much liability coverage should you get?
Every driver must carry the minimum amount of property damage liability insurance required in their state. Without the minimum amount of coverage, you can get cited for driving without adequate insurance, which comes with a fine (at a minimum).
However, many drivers are encouraged to purchase more liability coverage than what’s required. There’s no guarantee that the state’s minimum required coverage limit is enough to cover the full cost of an accident. If you only have $5,000 in coverage and you cause $25,000 in property damage, you would be responsible for the $20,000 difference.
Ultimately, the amount of coverage you get is a personal choice. If you want the most protection possible, it’s a good idea to increase your coverage limit. Just keep in mind that the higher your coverage limit is, the more expensive your insurance premium will be.
How do you file a property damage liability claim?
Filing a property damage liability claim is similar to any other type of car insurance claim. Although the exact steps will vary based on your insurance company, here are the steps you’ll need to take if you caused the damage:
- Find the property owner: After the incident occurs, find the property owner and get their contact information. If they’re not around, leave a note with your name, phone number, insurance company, and policy number.
- Document the damage: When it’s safe, document any property damage at the scene of the accident with photos and videos.
- Contact your insurance company: Contact your insurance company and notify them of the incident. You’ll be asked to provide some paperwork, and provide photo and video evidence of the damage.
- Pay your deductible: Once the insurance company has assessed the damage and estimated the cost of repairs, you may need to pay your deductible. From there, your insurance company will coordinate repairs with the property owner.
You should also check with your provider to see if it has any additional requirements.
Frequently asked questions
Is property damage liability coverage required?
Yes, property damage liability insurance is required in almost every state. It’s automatically included in every car insurance policy, and you can’t drop the coverage. Driving without the minimum required amount of coverage in your state is illegal, and comes with consequences.
What factors determine the size of a claim?
The main factor that determines the size of a claim is the cost of the repairs. A claim that costs $200 is considered a small claim, whereas a $10,000 claim is much larger. Larger claims are also more likely to impact your car insurance rate when your policy renews.
What’s the highest coverage limit for property damage liability insurance?
Every insurance company has different coverage limits for property damage liability insurance. However, most providers offer coverage limits of up to $100,000. You might be able to get coverage beyond that limit depending on the minimum required amount in your state.
What other types of car insurance are required?
In addition to property damage liability coverage, most states require drivers to carry bodily injury liability coverage, with minimum coverage limits per person and per accident. Additionally, some drivers are required to carry uninsured/underinsured motorist coverage, and personal injury protection (PIP).