Content of the material
- What is property damage car insurance and what does it cover?
- How much does liability coverage cost?
- Who needs property damage coverage?
- How Does Property Damage Liability Works?
- How Much Liability Coverage Do I Need?
- How Much Will Be The Cost of Property Damage Liability Insurance?
- How much property damage liability insurance should you carry?
- What does auto liability insurance include?
- Property damage liability coverage restrictions
- Multiple vehicles
- State minimums
- How Much Property Damage Liability Insurance Is Required?
- How does property damage liability work and what are the coverage limits?
- Compare auto insurance policies
- What does property damage liability cost?
- Frequently asked questions
- Is property damage liability coverage required?
- What factors determine the size of a claim?
- What’s the highest coverage limit for property damage liability insurance?
- What are other coverage types required for car insurance?
What is property damage car insurance and what does it cover?
Property damage insurance covers you for any financial liability that occurs should you get into an accident and cause damage to someone else’s property. Coverage for your own property falls under comprehensive and collision coverage, which you pay for separately.
Like bodily injury coverage, property damage coverage helps to ensure that any driver will be able to assume some financial responsibility for damage caused in an accident where they are deemed at fault. This type of coverage operates on a per accident basis, with the insurance company willing to cover costs up to the amount of your coverage.
Examples of what is covered:
Repairs for damage caused to the other party’s vehicle, including auto body shop labor or replacement parts Fixing up damage or destruction to other businesses, houses, fences, lampposts, mailboxes, etc. Attorney, court and other legal defense fees incurred for the property damage claim (depending on your terms and conditions) Lost income from a business closure that your accident was deemed to cause Other recurring expenses from that damage
Each state sets its own minimum limits for property damage coverage:
State Minimum coverage State Minimum coverage Alabama$25,000Montana$20,000Alaska$25,000Nebraska$25,000Arizona$10,000Nevada$20,000Arkansas$25,000New Hampshire$25,000California$5,000New Jersey$5,000Colorado$15,000New Mexico$10,000Connecticut$25,000New York$10,000Delaware$10,000North Carolina$25,000District of Columbia$10,000North Dakota$25,000Florida$10,000Ohio$25,000Georgia$25,000Oklahoma$50,000Hawaii$10,000Oregon$20,000Show All Rows
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How much does liability coverage cost?
The cost of liability insurance coverage as part of your auto insurance policy depends on many factors. This can include things like how much coverage you select. For example, higher coverage limits may cost more.
Who needs property damage coverage?
Nearly every state requires some form of minimum car insurance requirements, which includes property damage liability.
For example, Massachusetts drivers are required to carry at least a minimum of $5,000 in property damage liability coverage. Alabama drivers are required to have at least $25,000 in property damage liability coverage. Regardless of how often you drive, you are legally required to carry at least the minimum amount of auto coverage or show proof of financial responsibility in the state where you live.
How Does Property Damage Liability Works?
As this is a claim for another driver or person so you don’t have to file the claim first.
- Another person will file the claim, you just have to inform your auto insurance company about it. Once another person has filed the claim, then your insurance company will check the coverage limits on your policy and your deductibles. The claim amount will be released as per the amount of your deductible.
- If the claim amount is more than your coverage limit then that person will contact the driver directly to recover the extra amount. You will be responsible for paying the extra amount on the claim.
- If you are the victim here and you are not getting the extra amount from the driver then you can file that claim to your insurance company under collision insurance. But collision auto insurance is a bit expensive and everyone can not afford it.
How Much Liability Coverage Do I Need?To figure out how much liability insurance you need, think about the total value of your personal assets. You’ll want to choose at least that much in coverage to protect your financial well-being if you’re at fault in a car accident. You can also increase your protection on the road by adding other types of liability car insurance to your policy, like:
- Uninsured motorist property damage insurance to help cover your repair costs if someone hits your car, and they don’t have an insurance policy.
- Uninsured motorist bodily injury coverage, to help pay for medical care for you or your passengers if someone hits you, and they don’t have insurance or enough of it.
- No-fault insurance, also known as personal injury protection (PIP), helps cover the costs of medical bills for you or your passengers no matter who is at fault for the car accident. Keep in mind that PIP coverage is not available in all states.
How Much Will Be The Cost of Property Damage Liability Insurance?
There are two major factors that affect the property damage liability insurance cost:
- The coverage limit
- Your auto insurance company
Every insurance company has its own terms, conditions, and method of calculating the coverage cost. Insurance companies verify factors like the age of the driver, experience of the driver, car model, etc. Based on all these factors the company decides the insurance premium.
Also, the coverage limit you are selecting for the premium will affect your insurance cost. The higher the limit the higher will be the premium.
Here is the list of coverage limits along with the premium for property damage insurance coverage:
|Coverage Limit||The Premium for Property Damage Coverage (Annually)|
It is clear from the table that the difference of premium between coverage limit of $10,000 and $100,000 is around $20 per year only. The above prices are of a 2012 Hyundai; the prices might vary as per the make and model of your car.
How much property damage liability insurance should you carry?
The average property damage claim is generally a few thousand dollars, meaning that unlike with other types of insurance, you may not need to carry that much. However, you may opt for higher limits to ensure that you are sufficiently protected in the event of an accident.
In 2010, the average property damage claim was $2,881. Over the last ten years, however, the average claim amount has nearly doubled. Nonetheless, these amounts are lower than the minimum amount in every state. As mentioned above, however, getting more coverage, just to be extra careful, is relatively inexpensive and can provide additional support following an accident that results in costly car damage.
The data below from the Insurance Information Institute shows how average property damage claims have risen between 2010 and 2019.
Year Average property damage claim 2010$2,8812011$2,9582012$3,0732013$3,2312014$3,5162015$3,7912016$3,9692017$4,0642018$4,2952019$4,525
What does auto liability insurance include?
Liability coverage includes property damage and bodily injury coverages.
Property damage covers damage to the other party’s property. This could include damage to vehicles, a yard, light pole, or other property damaged because of the accident. Other things may include:
- A rental vehicle while the other person’s car is being repaired
- Diminished value, the difference between the value of the vehicle if there had never been damage and the value after repairs have been completed
Bodily injury covers injuries sustained by another person because of the accident. This can include:
- Medical bills
- Lost wages
- Pain and suffering
States may have different requirements on who can file a bodily injury claim against you.
Property damage liability coverage restrictions
Your Property Damage Liability coverage limits cannot exceed your Bodily Injury Liability insurance per-person limits if you select a split limit for Liability.
- If one vehicle on the policy has Liability insurance, all of the vehicles must have it.
- The selected Property Damage limits must be the same for all vehicles on a policy.
- Each state sets laws regarding how much Property Damage Liability coverage its residents are required to have. This is known as your state’s minimum limits or minimum limit requirements.
Fortunately, Progressive knows the requirements for each state and will make sure you have at least the minimum amount of Property Damage Liability coverage required to meet your state’s laws.
- Property Damage Liability coverage is required when a filing is on a commercial auto insurance policy.
- Extra trailers are charged a flat fee for Property Damage Liability coverage.
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
How does property damage liability work and what are the coverage limits?When you buy property damage liability coverage, you have to select a limit. If you choose a split limit policy, it typically distributes your coverage into three parts: bodily injury liability per person, bodily injury liability per accident, and property damage liability per accident.These parts are commonly expressed in number form–25/50/20, for example. The first two numbers refer to your bodily injury liability limits per person and per accident. The last number refers to your property damage liability limit.In the above example, the number 20 stands for $20,000. That means if you have a property damage liability limit of $20,000, your coverage will pay up to $20,000 for the combined property damage in an accident that you caused.In some states, drivers have the option to buy a combined single limit (CSL) policy for both bodily injury liability and property damage liability. The limit represents the maximum amount that will be paid out for all injuries and property damage in an accident.RECOMMENDED
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What does property damage liability cost?The cost of property damage liability varies depending on the driver, the state, and the insurance company. If you opt for your state’s minimum requirements for coverage, you can expect to pay less than if you buy additional coverage above the minimum. If you live in an area with more drivers, there’s a greater chance that you’ll get into a car accident and your property damage liability cost will likely increase. If you choose a combined single limit for bodily injury and property damage liability, you may be charged more since the flexibility of a CSL makes it more expensive to insure.MORE: How much does your insurance go up after an accident?
Frequently asked questions
Is property damage liability coverage required?
Yes, property damage liability insurance is required in almost every state. It is automatically included as part of your liability coverage, if you drop the coverage, you can face higher insurance rates when you get reinsured. Driving without the minimum required amount of coverage in your state is illegal and comes with consequences.
What factors determine the size of a claim?
The main factor that determines the size of a claim is the cost of the repairs. A claim that costs $200 is considered a small claim, whereas a $10,000 claim is much larger. More extensive claims are also more likely to impact your car insurance rate when your policy renews.
What’s the highest coverage limit for property damage liability insurance?
Every insurance company has different maximum limits for property damage liability insurance. However, most providers offer coverage limits as high as $100,000. Some auto insurers may offer limits beyond $100,000 per accident.
What are other coverage types required for car insurance?
In addition to property damage liability coverage, most states require drivers to carry bodily injury liability coverage, with minimum coverage limits per person and per accident. Additionally, some drivers are required to carry uninsured and underinsured motorist coverage and personal injury protection (PIP).