What is Property Damage Liability?
Property damage liability is a type of coverage on your auto policy that pays for repairs to someone else’s vehicle or property if you or another covered person causes damage to it. It does not pay for repairs to your own vehicle if you are at fault in the accident.
Property damage coverage protects your personal assets. If you are in an accident and are responsible for property damage, you are legally required to pay the other party. Property damage liability allows the other party to go to your insurance company to get paid instead of you paying out of pocket.
How does Property Damage Liability work?
Property damage liability is part of the liability coverage in your auto policy. Bodily injury liability pays for medical bills for injuries you cause, property damage liability pays for the cost of repairing damaged property.
If you cause property damage in an accident you will exchange insurance information with the other party. They can then file a claim with your insurance company for the repair costs up to the limit shown on your declarations page.
The property damage liability limit is the maximum amount your insurance company will pay for damages from a covered claim. Most policies have split limits which have separate amounts for bodily injury liability insurance and property damage coverage. For example a 100/300/50 split limits means:
- $100,000 per person for bodily injury liability
- $300,000 per accident for bodily injury liability
- $50,000 per accident for property damage
In this case your insurance company would pay up to $50,000 for property damage. If the cost exceeds that, you would be responsible for the balance.
Or a combined single limit policy has one total limit for both bodily injury coverage and property damage coverage. A $300,000 combined single limit means your insurance company will pay up to $300,000 for all damages—both property damage and bodily injuries—for one at-fault accident.
What Does Property Damage Liability Cover?
Nearly every car driver in America is familiar with property damage liability insurance. This is mainly because property damage liability insurance is primarily required by law for all drivers to carry in some form.
Providing insurance coverage for repairs for car accidents you cause is expected in nearly every state except New Hampshire. Insurance coverage for car repairs would be your responsibility if another driver didn’t damage them.
Property damage liability operates per car accident, meaning one property damage liability claim is filed for every car accident.
Bodily injury liability coverage functions the same way but only applies to people injured in an accident you caused.
- Auto repair - Naturally, repairs to the other driver’s vehicle are covered first and foremost. Any replacement parts and labor fees from the car repair shop are also included.
- Property damage - The property damage policy pays for collateral damage from the accident to buildings, fences, or street signs.
- Court fees - Attorney fees for legal defense in the courtroom for said property damages to the city or town are also covered by the property damage policy.
- Lost business income - If a business was damaged from the accident and must close for repairs, your property damage policy will cover any lost income during the business closure.
- Recurring expenses - Recurring car repairs and long-term vehicle maintenance will continue to be covered by your property damage liability because of the car accident.
How Much Property Damage Liability Coverage Do You Need?
Every driver sets their car insurance policy limits differently. A liability insurance claim costs around a couple of thousand dollars when it is filed. Drivers often purchase high auto insurance coverage limits for maximum financial protection.
The average car insurance claim has almost doubled from $2,880 to $4,600. But because the auto insurance coverage limits are high, so is the cost of vehicle insurance. Consider what you can afford to purchase as car insurance for your vehicle protection.
The state car insurance requirements are different from the averages, they are the bare minimum limits, which may not fully cover you in the event of a significant car accident. Many vehicle insurance policyholders look at their net worth to gauge how much they should spend annually on liability insurance coverage.
The state mandated car insurance requirements are listed in the table below.
| State | Requirements |
|---|---|
| Alabama | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Alaska | (Auto insurance is optional for certain Alaska residents) $50,000 Bodily injury liability coverage per person $100,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Arizona | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $15,000 Property damage liability coverage per accident |
| Arkansas | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| California | $15,000 Bodily injury liability coverage per person $30,000 Bodily injury liability coverage per accident $5,000 Property damage liability coverage per accident |
| Colorado | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $15,000 Property damage liability coverage per accident |
| Connecticut | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident |
| Delaware | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident $15,000 Personal injury protection (PIP) per person $30,000 Personal injury protection (PIP) per accident |
| Florida | $10,000 Property damage liability coverage per accident $10,000 Personal injury protection (PIP) |
| Georgia | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Hawaii | $20,000 Bodily injury liability coverage per person $40,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident $10,000 Personal injury protection (PIP) |
| Idaho | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $15,000 Property damage liability coverage per accident |
| Illinois | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $20,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage per person $50,000 Uninsured motorist coverage per accident |
| Indiana | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Iowa | $20,000 Bodily injury liability coverage per person $40,000 Bodily injury liability coverage per accident $15,000 Property damage liability coverage per accident |
| Kansas | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident PIP: $4,500 Medical, $900/Month for 1 year disability/loss of income, $25/Day in-home services, $2,000 Funeral costs, $4,500 Rehab. Survivors: $900/Month for 1 year disability/loss of income, $25/Day in-home services. |
| Kentucky | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Louisiana | $15,000 Bodily injury liability coverage per person $30,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Maine | $50,000 Bodily injury liability coverage per person $100,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $100,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $2,000 Medical payments coverage (MedPay) Single liability limit per accident of $125,000 |
| Maryland | $30,000 Bodily injury liability coverage per person $60,000 Bodily injury liability coverage per accident $15,000 Property damage liability coverage per accident $30,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $60,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $15,000 Uninsured/underinsured property damage coverage per accident |
| Massachusetts | $20,000 Bodily injury liability coverage per person $40,000 Bodily injury liability coverage per accident $5,000 Property damage liability coverage per accident $20,000 Uninsured motorist coverage per person $40,000 Uninsured motorist coverage per accident $8,000 Personal injury protection (PIP) |
| Michigan | $50,000 Bodily injury liability coverage per person $100,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident outside Michigan $10,000 Property damage outside MI $1M Property protection in MI $250,000 PIP ($ Lower for some Medicare/Medicaid). |
| Minnesota | $30,000 Bodily injury liability coverage per person $60,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $40,000 Personal injury protection (PIP) |
| Mississippi | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Missouri | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage per person $50,000 Uninsured motorist coverage per accident |
| Montana | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $20,000 Property damage liability coverage per accident |
| Nebraska | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident |
| Nevada | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $20,000 Property damage liability coverage per accident |
| New Hampshire | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $25,000 Uninsured/underinsured motorist property damage coverage $1,000 Medical payments coverage (MedPay) |
| New Jersey | $5,000 Property damage liability coverage per accident $15,000 Personal injury protection (PIP) |
| New Mexico | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident |
| New York | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $50,000 Liability coverage for death per person $100,000 Liability coverage for death per accident $10,000 Property damage liability coverage per accident $25,000 Uninsured motorist bodily injury coverage (UM) per person $50,000 Uninsured motorist bodily injury coverage (UM) per accident $50,000 Personal injury protection (PIP) |
| North Carolina | $30,000 Bodily injury liability coverage per person $60,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $30,000 Uninsured motorist coverage (UM) per person $60,000 Uninsured motorist coverage (UM) per accident $25,000 Uninsured motorist property damage coverage (UMPD) per accident |
| North Dakota | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $30,000 Personal injury protection (PIP) |
| Ohio | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Oklahoma | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Oregon | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $20,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage (UM) per person $50,000 Uninsured motorist coverage (UM) per accident $15,000 Personal injury protection (PIP) |
| Pennsylvania | $15,000 Bodily injury liability coverage per person $30,000 Bodily injury liability coverage per accident $5,000 Property damage liability coverage per accident $5,000 Medical benefits |
| Rhode Island | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| South Carolina | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage (UM) per person $50,000 Uninsured motorist coverage (UM) per accident $25,000 Uninsured motorist property damage coverage (UMPD) |
| South Dakota | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident |
| Tennessee | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Texas | $30,000 Bodily injury liability coverage per person $60,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident |
| Utah | $25,000 Bodily injury liability coverage per person $65,000 Bodily injury liability coverage per accident $15,000 Property damage liability coverage per accident $3,000 Personal injury protection (PIP) |
| Vermont | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident $50,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $100,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $10,000 Uninsured/underinsured motorist property damage coverage (UM/UIM-PD)per accident |
| Virginia | Optional auto insurance: Minimum limits apply; $500 Fee if no insurance. $30,000 Bodily injury liability coverage per person $60,000 Bodily injury liability coverage per accident $20,000 Property damage liability coverage per accident $30,000 Uninsured/underinsured motorist coverage (UM/UIM) per person $60,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident $20,000 Uninsured/underinsured motorist coverage (UM/UIM) per accident |
| Washington | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident |
| Washington, D.C. | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage (UM) per person $50,000 Uninsured motorist coverage (UM) per accident $5,000 Uninsured motorist property damage coverage (UMPD) per accident |
| West Virginia | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $25,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage (UM) per person $50,000 Uninsured motorist coverage (UM) per accident $25,000 Uninsured motorist property damage coverage (UMPD) |
| Wisconsin | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $10,000 Property damage liability coverage per accident $25,000 Uninsured motorist coverage (UM) per person $50,000 Uninsured motorist coverage (UM) per accident |
| Wyoming | $25,000 Bodily injury liability coverage per person $50,000 Bodily injury liability coverage per accident $20,000 Property damage liability coverage per accident |
State minimums may not cover all property damage you could cause in an accident. For high net worth individuals, this could mean big financial losses if you’re found liable for damages that exceed your limits.
To avoid paying out of pocket, you should carry enough property damage liability to cover all potential claims. According to the National Safety Council’s latest data, the average cost of property damage from a crash involving only vehicles is $5,700 per vehicle. But repair costs can be much higher in severe accidents, especially if the damaged vehicle is a high end sports car or luxury vehicle.
How Much Does Property Damage Coverage Cost?
To get to the point, what will you regularly pay with property damage liability insurance?
Remember that an annual car insurance premium can be more costly if the driver has recently been issued a speeding ticket or is involved in a car accident. Remember that car insurance companies base their auto insurance premiums on driver risk based on their driving history information.
Here’s what property damage liability rates will typically look like based on coverage limits:
- Clean driving record - Drivers with no recent accident or traffic violation will see the lowest property damage liability rates. Some examples would be $88 for a $25,000 limit, $114 for a $50,000 limit, and $141 for a $100,000 limit. These are estimates.
- Speeding ticket - Interestingly enough, annual property damage liability premiums for speeding tickets are greater than those for a recent car accident. These rates look like $188 for a $25,000 limit, $231 for a $50,000 limit, and $273 for a $100,000 limit.
- Recent car accident - Annual property damage liability rates for recent accidents or collisions run less than current speeding ticket rates would. They would be around $146 for a $25,000 limit, $182 for a $50,000 limit, and $210 for a $100,000 limit.
How Do You File a Property Damage Liability Claim?
The at-fault driver for the car accident files the car insurance claim with the other’s auto insurance policy. These car insurance claims are third-party and are only made between the driver and the car insurance provider of the other driver. Now, it’s all a matter of following the necessary steps to resolve the property damage and bodily injury liability quickly. The steps to file a property damage liability claim are listed below.
- File police report - Car insurance companies don’t require police reports of the car accident. However, you would still be able to file one when you are in a car accident. It’s the foremost form of documentation of the event. Your information and the other drivers' will be included along with accident details.
- Document damage with photos - Taking photographs of the accident scene and damages is another safe way to document it. You should photograph every damage at least once.
- Report the car accident to the car insurance carrier - Now comes the time to file the auto insurance claim with the other driver’s insurance agent. You will need the following information for an auto insurance claim file to come through after a car accident: accident date, accident description, driver’s license number, birthday, and vehicle information such as make and model. You will only need the other driver’s personal identification and vehicle information.
- Speak with auto insurance claims adjuster - After the car insurance claim is filed, a car insurance claims adjuster will review the property and bodily injury damages and help facilitate the auto insurance payout your car insurance policy provides. If you have comprehensive coverage, the auto insurance adjuster will also officiate repairs and payment for your bodily injuries and property damage in the car accident.
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Frequently Asked Questions
Is Property Damage Liability Insurance Required by State Law?
Yes, property damage liability coverage is mandatory in most states and is part of your overall liability coverage. But the amount you must carry varies by state. While most states have a minimum coverage requirement, if you lease your vehicle the requirement may be different. Leasing companies, who have an interest in the vehicle, often require policies with higher coverage limits than the state minimum.
What’s the difference between Property Damage and Collision Coverage?
Property damage liability coverage pays for the repair or replacement of others’ property you damage in an accident. Collision insurance coverage pays for repairs to your vehicle, minus your deductible, regardless of fault.
What’s the difference between Physical Damage Coverage and Property Damage?
Property damage means accidental damage, loss or destruction of tangible property, including loss of use of that property. It can also mean loss of use of tangible property that has not been physically damaged, destroyed or lost. Physical damage insurance means unexpected physical harm, damage or destruction of property.
Does Umbrella Insurance Cover Property Damage from a Car Accident?
Property damage insurance on an umbrella policy can cover damages from an accident or to someone else’s property. Umbrella insurance is an optional coverage for individuals who need higher liability limits. For example, if you hit a power pole and damage the pole and knock out power to nearby homes, the cost of repairs and damages could exceed your auto policy limits.
