Property Damage Coverage for Car Insurance

In 48 states, property damage liability coverage is a legal requirement for driving. It covers the other party’s property damages in the event of an at-fault accident, meaning an accident you caused. We’ll go over how much property damage liability is required and how much you really need.

Car repair costs can quickly add up, especially if the accident was particularly bad. And if the car is declared a total loss, meaning the damages cost more than the car’s actual market value (AMV), you’d be responsible for the entire AMV, which could be far higher than $10,000. For these reasons, we recommend getting a higher limit than the minimum requirement. Don’t worry: You can save money in other ways, like taking advantage of auto insurance discounts.

Who Needs It

Everyone needs property damage liability, but legally, only people living outside of New Hampshire and Virginia are required to have it. That’s because those states have no auto insurance requirements whatsoever. That being said, even if you live in either of these states, we still recommend getting property damage insurance to avoid paying completely out of pocket in at-fault accidents.

Cost

Since property damage insurance is part of liability insurance, meaning it’s bundled with bodily injury liability, it’s hard to tell exactly how much this auto insurance will cost. There are also many factors that affect auto insurance premiums, including credit score, gender, and which state you live in.

On average, liability insurance cost $650.35 per year in 2019, the last year the National Association of Insurance Commissioners published national data. See below for your state’s annual average.

Example

Let’s say you have a $25,000 property damage liability limit and you accidentally back into another car as you’re leaving a parking spot, causing them $5,000 worth of damages.

In that case, since property damage coverage doesn’t have a deductible, your insurance provider would pay $5,000 directly to the other party. You wouldn’t have to pay any money aside from your premium. Then, you’d have $20,000 worth of coverage left for property damage liability. Try not to spend it all in one place!

Restrictions and Exceptions

Property damage liability doesn’t cover it all. Here are some things it does not cover:

• Commercial driving, such as for Uber or Lyft
• Classic cars
• Custom equipment you added
• Depreciation
• Rental car coverage
• Damage you caused on purpose

How to File a Property Damage Claim

Filing a property damage insurance claim is easy, but you have to do it in a timely manner to obtain the coverage you need.

1. Call the police. Filing a police report makes coverage for a claim more likely. Plus, in some states, you’re legally required to file a police report for certain types of car accidents. Find out whether you need to file a police report. Make sure to get a copy of the accident report.
2. Collect evidence. Document all of the damages. Note the other party’s name and their vehicle information, including the vehicle identification number, make, model, and year. Also take note of the date, time, and weather conditions during the accident, as well as the names and badge numbers of any police officers you dealt with. Get the contact information of the involved party as well as their name, phone number, and insurance information. Most importantly, take photos of the damage.
3. Check your state’s statute of limitations. See how long you have to file your claim per your state’s regulations.

4. Contact your insurance provider. File a claim and give your evidence to your insurance agent or broker. If the accident was not your fault, file a third-party claim with the other party’s insurance provider. You may have to meet with an appraiser to determine the exact damages before receiving compensation.