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.
Property damage liability coverage is one of the foundational auto insurance coverages, along with bodily injury liability coverage, which covers the cost of someone’s medical bills resulting from an accident.
Property damage coverage reimburses damages to someone else’s property that you caused. The property can be a vehicle or another object like a fence. Together with bodily injury liability, property damage coverage makes up basic liability coverage.
Since property damage liability doesn’t require a deductible, you won’t have to pay anything under your property damage limit for a covered claim. Rather, your insurance provider will reimburse the other party for its damages up to the limit you’ve selected. Beyond that limit, you’d be responsible for paying out of pocket, given you’re in a state other than New Hampshire or Virginia (neither of which requires property damage liability).
When it comes to the limits, you have two factors to consider: your state’s minimum coverage required and how much car insurance you actually need. Find your state’s minimum coverage requirement below.
|State||Minimum per-accident limit for property damage liability coverage|
|District of Columbia||$10,000|
|Michigan||$1 million within the state; $10,000 elsewhere|
|New Hampshire||Not required|
That said, the minimum coverage isn’t always enough. Take the minimum coverage in Florida, for example, which is only $10,0001. If you got into an at-fault accident and caused more than $10,000 worth of damages to the other party, you’d have to pay for the remainder out of pocket, not to mention your own damages and injuries.
Florida is a no-fault state, meaning that each party is responsible for its own bodily injuries, while the at-fault party is only responsible for the other’s property damages.
|Car part repaired||Average cost (range)|
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.
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.
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.
|State||Average cost of liability insurance in 2019 (low to high)|
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!
Frontal-impact accidents cause 54% of all passenger vehicle occupant deaths across all types of vehicles4.
Property damage liability doesn’t cover it all. Here are some things it does not cover:
Filing a property damage insurance claim is easy, but you have to do it in a timely manner to obtain the coverage you need.
|State||Property damage claims statute of limitations (in years)|
|District of Columbia||3|
Just as an umbrella keeps you dry on a rainy day, an umbrella policy provides you with excess funds in the event you exhaust your coverage limits. For example, if you’ve reached your property damage limit but you still have to pay for $5,000 in damages, an umbrella policy would cover it. It usually starts at $1 million and increases in $500,000 increments6. Remember that umbrella insurance is optional in every state.
Whether you’re getting auto insurance for the first time or you’re simply switching auto insurance companies, make sure you’re comparing apples to apples.
If auto insurance was a house, property damage liability coverage would be the foundation, a requirement in all but two states. After all, you don’t want to get caught driving without insurance. Read on for answers to more of your auto insurance FAQs.
Learn even more about the ins and outs of property damage coverage.
Property damage coverage is a part of auto insurance that covers damages to the other party’s property, including their vehicle. Together with bodily injury coverage, it makes up liability coverage and is required in every state except New Hampshire and Virginia.
A good amount of property damage coverage meets both your state’s requirements and your needs. The limit should be no less than $25,000, but it will depend on how much you can afford. You should choose a limit that’s as high as you can afford to pay for in premiums.
These are some examples of property damage:
No, property damage coverage is not the same as comprehensive coverage. Property damage covers damages to the other party’s property in the event of at-fault collisions, while comprehensive coverage covers damages to your car from events other than collisions, such as theft, vandalism, and weather-related incidents.
Florida Insurance Requirements. FLHSMV. (2022). https://www.flhsmv.gov/insurance/
Estimated collision repair costs. LendingTree. (2022). https://www.lendingtree.com/personal/car-body-damage-repair-cost/#estimatedcollisionrepaircosts
2018/2019 Auto Insurance Database Report. NAIC. (2022). https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf
Fatality Facts 2020 Passenger vehicle occupants. IIHS. (2022). https://www.iihs.org/topics/fatality-statistics/detail/passenger-vehicle-occupants
Car Accidents: Statutes of Limitations. Enjuris. (2022). https://www.enjuris.com/car-accident/statutes-of-limitations.html
Should I purchase an umbrella liability policy? III. (2022). https://www.iii.org/article/should-i-purchase-umbrella-liability-policy-0