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When you hit the road, the last thing you expect is to get into an accident. Just leave the one you caused. But most states require car owners to carry a minimum level of car insurance so that drivers have a way of paying for accidents they cause.
Here’s how to understand property-casualty 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 are at fault for an accident. If you damage 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 some New Hampshire drivers must purchase auto insurance, such as drivers who have previously caused an accident).
- In Virginia, car owners can pay a $500 uninsured motorist fee if they don’t want to purchase liability coverage.
If your state doesn’t require auto insurance, this is a smart move.
What does property damage liability insurance cover?
Property damage liability insurance covers two main types of damages you cause to other people:
Another person’s vehicle. If you accidentally ding someone’s bumper while backing out of a parking spot or cause a total accident with another driver’s vehicle, you are financially responsible for the damage. Property damage liability will pay for damage to this vehicle, including the cost of repairing or replacing someone else’s vehicle, up to the limits listed on your policy.
Another person’s property. Say you swerve to avoid an animal on the road and crash into someone’s fence. Or you accidentally ran into a neighbor’s mailbox. Property damage liability insurance also covers these types of damages.
Note that this type of insurance does not cover your own vehicle. If you want to insure your vehicle for damage or theft, buy comprehensive and collision coverage.
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 slightly by state: the cheapest liability insurance costs are 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.
How Much Property Damage Liability Coverage Do I Need?
It is wise to buy enough liability insurance to cover what you might lose in a lawsuit. For example, car owners with high net worth should have a high level of liability insurance, including property damage liability.
Consider the last $100,000 in property damage liability. If you cause an accident that damages multiple cars, for example, that $100,000 in coverage could be used up quickly. You’re still on the hook for damage costs above your liability limit.
A liability limit of 100/300/100 means:
- $100,000 per person for injuries
- $300,000 for injuries per accident
- $100,000 for property damage per accident
The minimum The amount of liability insurance you should carry depends on the state, but these minimum limits are likely insufficient.
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Property Damage Liability Insurance FAQ
Do you need property damage liability insurance?
Property damage liability insurance is required by law in almost every state. The minimum amount of coverage required varies by state.
If you only need to carry a small amount of coverage—or none in your state—it’s a good idea to make sure you have adequate liability insurance for damages caused by an accident. If you cause an accident you are still legally liable for the amount above your insurance limit.
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 share information including the person’s name, insurance card information and license plate number at the scene of the accident.
Take photos at the scene if possible. File an accident report with the police – the insurance company may request a copy.
Learn what to do after a car accident to protect yourself from other drivers looking 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 you make a claim.