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What Is Property Damage Liability Car Insurance?

Updated
Christy Bieber
By: Christy Bieber

Our Insurance Expert

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Property damage liability insurance is an important type of car insurance coverage. It pays compensation when the policyholder damages property belonging to others. This guide to property damage liability insurance provides insight into how this coverage works and why it is important.

What is property damage liability insurance?

Understanding property damage liability coverage is a key part of any car insurance overview. This type of coverage provides protection for policyholders who cause a collision and damage property belonging to other people. It would pay for damage to another driver's car, for example. Or if a covered motorist struck a fence, light post, or even a home, it would provide compensation to the owner of that property.

Does car insurance cover damage on private property?

When a policyholder wants to learn about liability car insurance, one common question is whether property damage liability coverage pays for damage on private property.

Fortunately, the answer is yes. Coverage applies in any circumstances where the policyholder damages the property of others -- even on private property.

This means if a driver causes a crash in a private parking lot, a private driveway, a private road, or on any other private property, the motorist's car insurance is still in effect. Damage to any affected property will be covered in these circumstances.

Exactly what does property damage car insurance cover?

Property damage car insurance covers the repair or replacement of any property that the policyholder harmed in a collision. It could cover the repair or replacement of:

  • Vehicles driven by other motorists that were damaged or destroyed when the covered policyholder caused a crash
  • Structures the policyholder damaged by crashing into them, such as houses, fences, electrical lines, bridges, or commercial buildings

Property that a policyholder damaged is covered up to policy limits.

What is not covered by property damage liability insurance?

There are many things property damage liability insurance does not cover. This type of policy will not pay for:

  • Damage to the covered driver's own vehicle: A motorist would need collision coverage to make sure their insurance would pay for their own vehicle.
  • Personal injuries a driver causes in a collision: Bodily injury liability coverage pays for medical bills and lost wages when a covered driver causes a crash that leads to injuries.
  • Damages in excess of coverage limits: If the policy has a $5,000 limit and the total cost of property damage adds up to $20,000, $15,000 of the damage would not be covered.

How much property damage liability insurance do I need?

It can be complicated to answer the question of how much car insurance you need. But it is important.

In general, each state sets minimum coverage requirements for property damage liability. Drivers must buy at least the minimum required protection. Not doing so would be a violation of the law.

Motorists may wish to buy more property damage liability car insurance than they are required to. This is because the limits are often very low in many states.

Motorists who do not have enough coverage to pay for the full repair or replacement of property they damage could find that the property owners pursue legal claims against them personally. They might have to pay out of pocket for any losses above what insurance covers.

What are property damage liability limits?

Property damage liability limits cap the amount of money an insurer will pay when a policyholder causes an accident and damages the property of others. For example, if a driver has a $25,000 limit, the insurance company will only pay for up to $25,000 in property damages.

Damage liability limits by state

Each state sets its own limits for the minimum amount of property damage liability car insurance drivers must buy. Limits could be as low as $5,000 or as high as $25,000. The table below shows the minimum required coverage.

State Minimum Required Property Damage Liability Car Insurance
Alabama $25,000 per accident
Alaska $25,000 per accident
Arizona $15,000 per accident
Arkansas $25,000 per accident
California $5,000 per accident
Colorado $15,000 per accident
Connecticut $25,000 per accident
Delaware $10,000 per accident
Florida $10,000 per accident
Georgia $25,000 per accident
Hawaii $10,000 per accident
Idaho $15,000 per accident
Illinois $20,000 per accident
Indiana $25,000 per accident
Iowa $15,000 per accident
Kansas $25,000 per accident
Kentucky $25,000 per accident
Louisiana $25,000 per accident
Maine $25,000 per accident
Maryland $15,000 per accident
Massachusetts $5,000 per accident
Michigan $10,000 per accident
Minnesota $10,000 per accident
Mississippi $25,000 per accident
Missouri $10,000 per accident
Montana $20,000 per accident
Nebraska $25,000 per accident
Nevada $20,000 per accident
New Hampshire* $25,000 per accident
New Jersey $5,000 per accident
New Mexico $10,000 per accident
New York $10,000 per accident
North Carolina $25,000 per accident
North Dakota $25,000 per accident
Ohio $25,000 per accident
Oklahoma $25,000 per accident
Oregon $20,000 per accident
Pennsylvania $5,000 per accident
Rhode Island $25,000 per accident
South Carolina $25,000 per accident
South Dakota† $25,000 per accident
Tennessee $15,000 per accident
Texas $25,000 per accident
Utah $15,000 per accident
Vermont $10,000 per accident
Virginia $20,000 per accident
Washington $10,000 per accident
Washington, D.C. $10,000 per accident
West Virginia $25,000 per accident
Wisconsin $10,000 per accident
Wyoming $20,000 per accident
Data source: ValuePenguin by Lending Tree *Auto insurance is not mandatory in New Hampshire, but if a driver purchased it or was required to purchase, this is the minimum coverage.

How much does property damage car insurance cost?

The costs of property damage liability coverage vary based on many factors, including geographic location, driving history, and the amount of coverage purchased.

It is typically possible for a motorist to get covered for around $65 to $75 per six months. The costs of upgrading coverage are small, so going from $10,000 in coverage to $50,000 might add only a few dollars a month to premiums.

Costs can vary depending on the insurer as well. The best car insurance companies provide online quotes that make it easy to compare premium prices.

How to file a property damage insurance claim

A property damage insurance claim will go through the insurance of the driver responsible for causing a collision. A person whose property has been damaged can make a third-party claim with that insurer.

Often, those who have sustained damage to their property will report the incident to their own insurer who will help them to make a claim and recover funds. It is also possible to hire a lawyer to pursue compensation for injuries and property damage through a civil case. This is most often done when injuries occur.

When filing a claim, it is important to have proof of both the extent of the damage as well as proof of who was at fault for the crash. Photos from the accident scene, a police report, and witness statements can all serve as evidence during the claims process.

Typically, an insurance adjuster will then be appointed to assess the damage and make an offer of compensation. An insurer will always pay only up to the policy limits, though, regardless of the full extent of loss.

Other types of car insurance policies

There are many other types of car insurance policies motorists may wish to purchase in addition to property damage liability car insurance. These include:

  • Bodily injury liability: This pays for damages resulting from injuries when a policyholder causes a collision.
  • Collision coverage: This pays for the policyholder's own vehicle damages in the event the policyholder causes a crash.
  • Comprehensive coverage: This covers non-crash-related losses to the policyholder's vehicle, such as damage due to vandalism or loss of the vehicle due to theft.
  • Personal injury protection: This is required in some states, and pays for medical bills and lost wages when more minor collisions occur, regardless of who was to blame for the accident.
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FAQs

  • Property damage liability car insurance is a type of liability insurance. It pays for damage to property when the damage was caused by the policyholder. For example, it would pay to repair or replace a vehicle that was damaged by the policyholder who caused a crash to occur.

    Liability insurance is broader than just property damage coverage, though. Drivers are generally also required to buy bodily injury liability coverage. That pays for medical bills and lost wages if the policyholder causes an injury.

  • Property damage liability is an important type of insurance coverage. Without it, a driver who caused a collision would be personally responsible for paying to repair or replace any property damaged. A driver could be sued for tens of thousands of dollars if they totaled another motorist's vehicle.

  • Property damage coverage pays for losses a policyholder causes to other people's property. Collision coverage pays for losses to the policyholder's own vehicle.

  • Property damage coverage and collision coverage are not the same. Collision coverage will reimburse a policyholder for repairs or replacement of the policyholder's own vehicle if the covered motorist causes a crash. But property damage coverage only pays for damage to other people's vehicles if the policyholder causes an accident.

  • In most states, property damage liability coverage is required. The amount of required coverage could be as little as $5,000 or as high as $25,000. Many motorists should purchase more than the required amount of coverage to get more protection for their assets.

Our Insurance Expert