What Is Property Damage Liability in Car Insurance?

Property damage liability in car insurance covers expenses when you accidentally damage another person's property, such as cars or buildings. It's a standard part of auto policies and is mandatory in most states, but it doesn't cover damage to your own vehicle. If damages exceed your coverage limit, you pay the difference, and your premiums may increase after an accident.

• What Is Property Damage Liability?
• What Property Damage Liability Covers
• How Property Damage Liability Works
• How Much Property Damage Liability You Need
• How Much Property Damage Liability Costs
• How to File a Property Damage Claim
• FAQ About Property Damage Liability

Property damage liability in car insurance covers the costs if you are at fault for accidentally damaging someone else's property with your vehicle. This includes other vehicles, buildings, fences and more but does not cover damage to your own car.

The last number in your policy limit's sequence represents your property damage liability limit. For example, in a 100/300/100 policy, you have up to $100,000 in coverage for property damage in each accident.

When choosing liability coverage, the options typically include the following:

• State minimum liability coverage: The basic, legally required coverage in your state.
• 50/100/50: Offers property damage protection up to $50,000 per accident.
• 100/300/100: Increases your coverage to $100,000 for property damage per accident.
• 300/500/300: Provides a comprehensive $300,000 in property damage coverage per accident. While not rare, it's more typical among drivers who opt for higher-than-average liability coverage due to their higher risk exposure or desire for more comprehensive financial protection.

To cover damages to your own vehicle, you'll need collision insurance, which pays for damage to your car from a collision, regardless of who is at fault. Comprehensive insurance covers non-collision-related damage to your car, such as theft, vandalism or natural disasters.

Property damage liability in car insurance is designed to cover the costs of damage that you, as the driver, might cause to someone else's property with your vehicle. This coverage is a standard part of most auto insurance policies and is mandatory in many states.

It's important to note that this coverage does not extend to any damage to your own vehicle.

If you’re looking to get insurance to cover your own vehicle, add collision insurance on top of your liability coverage. Here's how the two types of coverage compare:

Property damage liability is essential in car insurance, covering a specified amount for each accident without requiring a deductible.

If you accidentally damage someone's property with your car, they'll file a claim with your insurance. Your insurance pays for the repairs, but only up to your policy's limit. If the repair costs exceed your limit, you'll have to foot the bill for the extra amount.

If you have another accident, your insurance steps in again with the same limit. Say your limit is $10,000 per accident; it'll cover up to that amount each time. But remember, after an accident, your insurance cost might go up. In fact, the average cost of car insurance can jump by 67% after an accident.

In some states, if your policy has a combined single limit, your insurance covers injuries and property damage under one total limit. This gives you a bit more flexibility when dealing with different kinds of claims.

Most states require property damage liability insurance — the exceptions are New Hampshire and Virginia. Liability insurance automatically includes both bodily injury and property damage liability, regardless of the policy limits or if you choose the state minimum coverage.

The National Safety Council reports that the average property damage in an accident is about $5,700. The right amount of coverage for you depends on your budget, your risk tolerance and the risks you might face. Typically, state minimums don't cover the full extent of property damage, especially in accidents involving high-value vehicles. For example, if you're in an accident with a luxury car, a lower limit might not fully protect you financially.

In choosing your coverage, weigh the potential accident costs against your policy limit. A higher limit offers more protection and can prevent significant out-of-pocket expenses in the event of a serious accident.

The average cost of liability insurance, which includes both bodily injury and property damage, is as follows:

• For basic state minimum liability: $41 per month, $489 per year
• For 100/300/100 liability coverage: $51 per month, $615 per year
• For 300/500/300 liability coverage: $60 per month, $723 per year

The average premiums are based on rates for a 40-year-old male with a Toyota Camry.

You can get higher coverage by increasing your monthly cost by $10 to $19. Higher limits can safeguard you against large out-of-pocket expenses in the event of an accident, especially if the damages exceed state minimum coverage levels.

If you're in an accident and need to file a claim against the other driver's insurance, start by documenting the damage with photos and gathering any eyewitness accounts. If you have a pre-accident photo of your property, keep it for comparison. Exchange insurance information with the other driver and promptly contact their insurance company. Ensure that the settlement you receive is fair and covers all your repair bills.

MoneyGeek addresses commonly asked questions about property damage claims to help you understand this essential coverage, how it works and what it means for you as a driver.