Property damage liability insurance is one of the main types of coverage drivers are required by law to have. This insurance covers the cost of damage caused to others, whether you damaged your car, home, or any other type of personal property.
what is property damage auto insurance and what does it cover?
Property damage insurance covers you for any financial liability that occurs if you are in an accident and cause damage to someone else’s property. coverage for your property is included in comprehensive and collision coverage, which you pay for separately.
Like bodily injury coverage, property damage coverage helps ensure that any driver can take some financial responsibility for damages caused in an accident in which they are found to be at fault. This type of coverage operates per accident, with the insurance company willing to cover the costs up to the amount of your coverage.
examples of what is covered:
minimum property damage limits for each state:
how much does property damage liability insurance coverage cost?
Typical liability limits for property damage coverage range from $5,000 to $100,000 and are based in part on the options auto insurance companies offer their prospective policyholders. with higher coverage limits, you can expect higher premiums.
The following table illustrates property damage premiums at different coverage limits for a sample car and driver profile. In this case, we used a 2014 Toyota Camry for a driver in New York.
doubling or tripling your coverage limit does not result in a corresponding increase in your premiums. the company we got quotes from for our example only charges about 1.07 times the lower limit rate for an increase to the higher limit.
so going from a coverage limit of $10,000 to $100,000 only increases property damage premiums by about $5 per year. this is true regardless of the driver’s background and the type of car (economy or luxury) the insured is insuring with our example company.
How much property damage liability insurance should you have?
The average property damage claim is typically a few thousand dollars, much less than bodily injury liability coverage. however, you should consider higher property damage limits to ensure you are sufficiently protected in the event of an accident.
We found that doubling property damage liability coverage from $25,000 per year to $50,000 only costs a few dollars more per month.
In 2019, the average property damage claim was $4,525, considerably less than the minimum required amount of coverage in all states. However, getting more coverage is very inexpensive and can provide additional support after an accident that results in expensive car damage, especially if you spend a lot of time behind the wheel or live in an area where people tend to drive expensive cars.
how do you file a property damage liability claim?
Because property damage insurance covers damage you cause to someone else’s property, you’ll never be the one to make claims against your own policy. Instead, property damage claims are typically filed as third-party auto insurance claims, where you or someone else files an insurance claim against the at-fault person’s insurance policy.
Property damage coverage limits dictate the most the insurance company is willing to pay as a result of a single accident. If the damages caused by the accident exceed the amount of coverage, then the person making the claim can go directly to the policyholder to recover the excess amount. this may include being sued in civil court to make up the difference.
If the accident is found to be most at fault and you can’t recover enough money from another driver’s property damage insurance, you can use your collision insurance to cover the rest. although we recommend having collision insurance, it is optional and usually expensive to carry.