What is Property Damage Liability Car Insurance?
Property damage liability coverage covers damage you cause to another person's car, home or other belongings.
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If you're the at-fault driver in an accident, your property damage insurance will pay to repair or replace the other driver's car. This coverage also applies to other types of property, such as mail boxes, fences and garage doors.
You need to have property damage car insurance to drive legally. The minimum amount of coverage you have to get depends on where you live.
What is property damage car insurance?
Property damage car insurance pays to repair or replace another person's vehicle or other items after an accident you cause.
Property damage car insurance does not pay for damage to your car. If you cause an accident, you'll need comprehensive and collision insurance to cover your own repairs.
Typically, this coverage will kick in if you cause damage to another person's car. For example, your property damage coverage would pay to repair another driver's bumper after you rear end them. It would also pay out if you ran into a parked car.
But it's important to note your coverage extends to any type of property you damage with your car. That means your property damage auto insurance would pay out if you drove your car into a neighbor's tree or a fence, or through a storefront window.
What does property damage car insurance cover?
- Repairs for damage caused to another person's car including labor costs and replacement parts.
- A replacement vehicle if the other person's car can't be repaired or if the cost to repair their car is higher than the cost to replace it.
- Fixing other types of property damaged by your car, such as businesses, houses, fences, lampposts, mailboxes, trees and shrubs.
- Legal defense costs if you need to hire a lawyer after an accident.
- Lost income if you caused a business to temporarily close.
How much property damage liability insurance do you need?
You need to have enough property damage car insurance to meet your state's minimum requirements.
In many states, you need to have at least $25,000 of property damage coverage. But some states have higher or lower limits. For example, you only need $5,000 of property damage insurance in Massachusetts. But North Carolina drivers have to carry at least $50,000 worth of coverage.
Property damage minimum requirements by state
State | Property damage |
|---|---|
| Alabama | $25,000 per accident |
| Alaska | $25,000 per accident |
| Arizona | $15,000 per accident |
| Arkansas | $25,000 per accident |
| California | $15,000 per accident |
Keep in mind, it's almost always a good idea to carry more than your state's minimum coverage requirements. Raising your property damage limits is inexpensive and can save you from big financial problems down the road.
That's because you're responsible for any damages beyond what your insurance will cover. So if you have a policy with $25,000 worth of coverage and you caused $75,000 worth of damage, you'd have to pay the remaining $50,000 out of pocket.
If you have a high net worth you want to protect, consider getting extra coverage, called an umbrella policy. Umbrella policies typically start at $1 million and can go up to $5 million.
How much does property damage liability insurance cost?
Property damage by itself costs an average of $23 per month for $25,000 of coverage.
Keep in mind that the amount you pay will depend on many factors, including the company you choose, the amount of coverage you need, the deductible you choose, where you live, your age, gender, driving history and other personal information such as your credit score.
Many states require you to have at least $25,000 of property damage coverage. But it's a good idea to get more because you typically don't need to pay much more to double your coverage. For example, going from a $10,000 to $100,000 coverage limit raises your monthly rate by only about $5 per year. This holds true regardless of your background and the car you drive.
Remember, you're responsible for any costs beyond what your policy will pay. So if you get into an accident with a luxury car such as an Audi or a Mercedes, you may be responsible for tens of thousands of dollars or more in damages.
How do you file a property damage liability claim?
The process for filing a claim is straightforward. The steps you need to take will look a little different depending on whether you caused the accident or you're the victim.
The victim will need to file the claim with the at-fault driver's insurance. If you caused the accident, it's still important to contact your insurance company. But you won't file a property damage claim since your company will pay for the other driver's repair costs.
- Get the other driver's insurance information. After an accident, talk to the other driver and get their name, contact information and the name of their insurance company.
- Take photos and video of the damage. As soon as it's safe, it's important to document any damage to your car.
- Get in touch with the at-fault driver's insurance company. You'll need to give them some information about when and how the accident happened, alongside any photos, videos or other documentation you have. It's also a good idea to contact your own insurance company for help with this process.
Frequently asked questions
What is property damage car insurance?
Property damage car insurance pays to repair or replace another person's car, house or other items after an accident you cause. This coverage doesn't pay for damage to your own car.
How much property damage car insurance do I need?
The amount of property damage car insurance you need depends on where you live, because each state sets its own coverage requirements. Keep in mind, it's usually a good idea to have higher limits than the state minimum.
Is property damage the same as collision?
No, property damage insurance only covers damage you cause to other people. Collision coverage pays for damage to your own car after an accident.
Sources and methodology
Car insurance costs are based on a 30-year-old man with good credit who drives a 2015 Honda Civic EX. Averages are based on thousands of insurance quotes from ZIP codes across Texas for the largest insurance companies.
Rates for state comparisons are based on national data for the average cost of insurance.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were taken from public insurance company filings and should be used for comparative purposes only. Your own quotes may be different.
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
