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When you hit the road, the last thing you expect to happen is to get into an accident. Let alone one you caused. But most states require car owners to carry a minimum level of car insurance so that drivers have a way to pay for accidents they cause.
Here’s how to understand property-damage liability insurance.
What Is Property Damage Liability?
Property damage liability is a type of insurance that, along with bodily injury liability, ensures that drivers can pay for losses when they’re at fault for an accident. If you cause damage to another person’s vehicle or property, that’s when property damage liability insurance kicks in.
Property damage liability insurance is required by law in almost all states, with two exceptions:
- In New Hampshire, there is no state-mandated insurance law (although certain New Hampshire drivers must buy auto insurance, such as drivers who have previously caused an accident).
- In Virginia, car owners can pay a $500 uninsured motor vehicle fee if they don’t wish to purchase liability coverage.
Even if your state doesn’t require auto insurance, it’s a smart move to have it.
What Does Property Damage Liability Insurance Cover?
Property damage liability insurance covers two main types of damage you cause to other people:
Another person’s vehicle. Whether you accidentally ding someone’s bumper while backing out of a parking spot or cause an accident that totals another driver’s vehicle, you are financially responsible for the damages. Property damage liability will pay for this vehicle damage, including the cost of repairing or replacing someone else’s vehicle, up to the limit listed in your policy.
Another person’s property. Say you swerved to avoid an animal in the road and crashed into someone’s fence. Or you accidentally ran over a neighbor’s mailbox. Property damage liability insurance also covers these types of damage.
Note that this type of insurance does not cover your own vehicle. Buy comprehensive and collision coverage if you want to insurance for damage to or theft of your own vehicle.
How Much Does Property Damage Liability Insurance Cost?
The average annual cost for liability car insurance (property damage liability and bodily injury liability) is $650.35, according to the most recent data from the National Association of Insurance Commissioners.
Average liability insurance costs vary quite a bit by state: The cheapest liability insurance cost is in North Dakota ($312.30 a year) and the most expensive is in Louisiana ($1,023.91 a year).
The cost of car insurance, including property damage liability, is based on many factors, including your location, age, gender, driving record, credit and more.
You can shop around for the cheapest car insurance rates by getting quotes from several insurance companies.
Related: Cheapest liability only car insurance
How Much Property Damage Liability Coverage do I Need?
It’s smart to buy enough liability insurance to cover what you could lose in a lawsuit. For example, car owners with a high net worth should have a high level of liability insurance, including property damage liability.
Consider at last $100,000 in property damage liability. If you cause an accident that damages multiple cars, for example, that $100,000 in coverage can get used up quickly. You’re still on the hook for damage costs that are above your liability limits.
Liability limits of 100/300/100 mean:
- $100,000 for injuries per person
- $300,000 for injuries per accident
- $100,000 for property damage per accident
The minimum amount of liability insurance you’re required to carry depends on the state, but these minimum limits are likely insufficient.
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Property Damage Liability Insurance FAQ
Is property damage liability insurance required?
Property damage liability insurance is required by law in almost every state. The minimum amount of coverage that’s required depends on the state.
Even if you are required to carry only a small amount of coverage—or none at all in your state—it’s a good idea to have ample damage liability insurance just in case you cause an accident. You’re still legally liable for amounts that are above your insurance limits if you cause an accident.
How do I file a property damage liability insurance claim?
If your property was damaged by another driver, you can file a claim with the other person’s insurance company. Be sure to exchange information at the scene of the accident, including the person’s name, insurance card information and license plate number.
Take pictures at the scene if possible. File an accident report with the police—the insurance company may request a copy.
Know what to do after a car accident to protect yourself from other drivers who may want to take advantage of the situation.
Is there a deductible for property damage liability claims?
There is no deductible for property damage liability insurance. A deductible is the amount of money you are personally responsible for paying when there’s a claim.
