Content of the material
- Definition of Property Damage
- What is My Property Damage Claim Worth?
- How Much Property Damage Liability Insurance Is Required?
- What Does Property Damage Insurance Cover?
- How Much Does Property Damage Liability Cost
- What does property damage liability cover?
- How much liability coverage should you get?
- How much does property damage liability insurance coverage cost?
- Uninsured Motorist Property Damage
- Insuranceopedia Explains Property Damage
Definition of Property Damage
Property damage is defined as harm to real or personal property that occurred due to natural forces or someone’s act or omission.
Damage to property can include:
- Residential property damage, including damage to your home, trees, and driveway
- Commercial property damage
- Damage to your personal property, including vehicles and bicycles
Natural causes of property damage include wind, fire, hail, flooding, and freezing. Types of property damage caused by a person may include intentional acts (such as theft) and negligence (e.g., car accidents).
What is My Property Damage Claim Worth?
Your compensation in a property damage claim will depend on the facts and circumstances of your situation.
Factors that may affect the value of your claim include:
- What was damaged (e.g., your home, your vehicle)
- The type of property damage you suffered
- The severity of your property damage
- The insurance coverage available for your claim, if any
- Your level of fault, if any
Your damages may include the cost to repair your property or the item’s fair market value if it’s stolen or damaged beyond repair.
If you suffered property damage to your home, business, or vehicle, you should speak with a lawyer familiar with property damage law. They will be able to maximize your damages to ensure that you’re fully compensated for your loss.
How Much Property Damage Liability Insurance Is Required?
How much property damage liability insurance you’re required to have depends on what state you live in. Below are the minimum requirements for each state and Washington, D.C.:
- Alabama: $25,000
- Alaska: $25,000
- Arizona: $10,000
- Arkansas: $25,000
- California: $5,000
- Colorado: $15,000
- Connecticut: $20,000
- Delaware: $10,000
- District of Columbia: $10,000
- Florida: $10,000
- Georgia: $25,000
- Hawaii: $10,000
- Idaho: $15,000
- Illinois: $20,000
- Indiana: $25,000
- Iowa: $15,000
- Kansas: $25,000
- Kentucky: $25,000
- Louisiana: $25,000
- Maine: $25,000
- Maryland: $15,000
- Massachusetts: $5,000
- Michigan: $10,000
- Minnesota: $10,000
- Mississippi: $25,000
- Missouri: $25,000
- Montana: $20,000
- Nebraska: $25,000
- Nevada: $20,000
- New Hampshire: $25,000
- New Jersey: $5,000
- New Mexico: $10,000
- New York: $10,000
- North Carolina: $25,000
- North Dakota: $25,000
- Ohio: $25,000
- Oklahoma: $25,000
- Oregon: $20,000
- Pennsylvania: $5,000
- Rhode Island: $25,000
- South Carolina: $25,000
- South Dakota: $25,000
- Tennessee: $15,000
- Texas: $25,000
- Utah: $15,000
- Vermont: $10,000
- Virginia: $20,000
- Washington: $10,000
- West Virginia: $25,000
- Wisconsin: $10,000
- Wyoming: $20,000
What Does Property Damage Insurance Cover?Property damage liability insurance, also known as property damage insurance, can help pay for repairs if you destroy another person’s belongings, like their:
- Lamp posts
- Turn your vehicle into a friend’s driveway too quickly and hit their mailbox
- Crash into a storefront after putting your car in “drive” instead of “reverse”
- Rear-end another car while you’re in traffic
How Much Does Property Damage Liability CostIf you live in an area with more drivers, your liability cost will likely increase. This is because there’s a higher chance you’ll be in an accident where you’ll need physical damage insurance. Also, if you choose a higher coverage limit than your state’s minimum requirement, this can increase your rate. It’s also important to note that the amount you drive impacts your premium price.To figure out an estimate of how much coverage you need, you can use a car insurance calculator. You can also learn more about auto insurance coverage types and what car insurance discounts are available by getting a quote from us today.
What does property damage liability cover?
Property damage liability covers another person’s property if you cause damage from an at-fault accident. It covers property, including cars, houses, fences, mailboxes and business storefronts. It also covers public property, like light poles or road signs, that might be damaged in an accident.
This coverage type can also cover your legal fees if you are involved in a major property damage claim and have to go to court. If you crash into a business storefront and it has to close for repairs, your car insurance company may also cover the owner’s lost revenue.
Property damage liability coverage does not cover your losses, like vehicle damage or medical bills. It specifically covers other peoples’ property. If your vehicle is damaged in an accident, or if you need medical treatment, your optional collision, comprehensive and medical payments coverage will help cover the costs. Review your auto policy to understand if these coverages are listed and if they are not, contact your insurance agent if you need them added before an accident occurs.
How much liability coverage should you get?
Drivers must carry at least the minimum amount of property damage liability insurance required in their state. Without the minimum coverage, you can get cited for driving without adequate insurance, which comes with a fine (at a minimum) and usually a requirement to carry an SR-22 certificate.
However, many drivers are encouraged to purchase more liability coverage than what is required. There is 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 cause $25,000 in property damage, you could 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, increasing your coverage limit can provide that peace of mind. Just keep in mind that the higher your coverage limit is, the more expensive your insurance premium will be.
How much does property damage liability insurance coverage cost?
Typical liability limits for property damage coverage range from $5,000 to $100,000, and are based in part on what options auto insurance companies offer to their prospective policyholders. With higher coverage limits, you can expect to have higher premiums.
The following table illustrates the property damage premiums at different coverage limits for a sample car and driver profile. In this case, we used a 2014 Toyota Camry for a driver in New York.
Coverage limit Property damage premium (six months) $10,000$68.20$15,000$68.80$20,000$69.50$25,000$70.10$50,000$71.40$100,000$73.30
Doubling or tripling your coverage limit does not lead to a corresponding increase in your premiums. The company we obtained quotes from for our example only charges about 1.07 times the rate of the lowest limit for an increase to the highest limit.
So going from a $10,000 to $100,000 coverage limit only increases property damage premiums by about $5 per year. This holds true regardless of the driver’s background and what kind of car (economy or luxury) the policyholder is insuring with our example company.
Uninsured Motorist Property Damage
Uninsured motorist property damage coverage (UMPD) is pretty straightforward. This type of auto insurance coverage pays for the damages incurred by the policy holder when someone without insurance, or who is underinsured, hits his car. It also pays for damages to a car that is involved in a hit-and-run collision. Typically, uninsured motorist property damage coverage is needed when collision coverage is not included in someone’s insurance policy. In this case, the UMPD would cover what the collision provision in another insurance policy would cover.
In some cases, it is still worth it to invest in uninsured motorist property damage coverage because it may pay for more than what collision insurance would cover. UMPD coverage only pays a victim up to the value of his car. In some states it pays even less. Therefore, if someone is driving an older car that is not worth much, then it may not be beneficial for that person to carry UMPD coverage.
The rules regarding UMPD vary widely, depending on the state. For instance, UMPD is required in 14 states, including New Jersey, North Carolina, Texas, and Vermont. Utah and Washington allow their policyholders to decline UMPD coverage if they already have elected for collision coverage.
In some states, like Alaska, California, and Tennessee, drivers must carry UMPD coverage unless they specifically reject the coverage in writing. Most of the states in the U.S. do not have a UMPD requirement, which means it is up to the insurance companies as to whether they want to offer UMPD, and many of them choose not to.
Insuranceopedia Explains Property Damage
Property damage is a risk that can be covered by property insurance. However, a policy might not cover a particular peril. Damage caused by an earthquake, for example, should be specified in most property insurance policies so that a company can financially assist the policyholder with the repair or reconstruction of the damaged property. For an owner of a damaged property that does not have property insurance, their only hope for a reprieve is by asking government for tax cuts after they reports the damage.
The person who causes the damage is covered by property liability insurance. Most car owners, for instance, have this policy to protect them financially and legally should they figure in a vehicular accident that causes damage to other vehicles and motorists.