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When you hit the road, the last thing you expect is to get into an accident. Not to mention one you caused. However, most states require car owners to have minimum insurance so drivers have the option of paying for accidents they cause.
This is how you understand property damage liability insurance.
What is property damage liability?
Property damage liability is a type of insurance that, along with personal injury liability, ensures drivers can be held liable if they are at fault in an accident. If you cause damage to the vehicle or the property of another person, the property damage liability insurance takes effect.
Property damage liability insurance is required by law in almost all states, with two exceptions:
- New Hampshire does not have a state-mandated insurance law (although certain New Hampshire drivers are required to have auto insurance, such as drivers who have previously caused an accident).
- In Virginia, car owners can pay a $500 uninsured motor vehicle fee if they do not wish to purchase liability insurance.
Even if your state doesn’t require auto insurance, having one is a smart move.
What does property damage liability insurance cover?
Property damage liability insurance basically covers two types of damage that you cause to other people:
Another person’s vehicle. Whether you accidentally damage someone else’s bumper while backing out, or cause an accident that totals another driver’s vehicle, you are financially responsible for the damages. Property Damage Liability pays for that vehicle damage, including the cost of repairing or replacing someone else’s vehicle, up to the maximum shown on your policy.
Another person’s property. Suppose you dodged an animal on the road and crashed into a fence. Or you accidentally ran over a neighbor’s mailbox. Property damage liability insurance also covers this type of damage.
Note that this type of insurance does not cover your own vehicle. Take out fully comprehensive and comprehensive insurance if you want to insure your own vehicle against damage or theft.
What does property damage liability insurance cost?
The median annual cost of auto liability insurance (both property damage and personal injury liability) is $650.35, according to the latest data from the National Association of Insurance Commissioners.
Average liability insurance costs vary significantly by state: the cheapest liability insurance is in North Dakota ($312.30 per year) and the most expensive in Louisiana ($1,023.91 per year).
The cost of car insurance, including property damage insurance, is based on many factors including your location, age, gender, driver’s license, credit and more.
You can look for the cheapest car insurance rates by getting quotes from several insurance companies.
How much property damage liability insurance do I need?
It is wise to have sufficient liability insurance to cover what you could lose in a lawsuit. For example, wealthy car owners should have high liability insurance, including property damage liability.
Consider at least $100,000 in property damage liability. For example, if you cause an accident that damages multiple cars, that $100,000 of coverage can quickly be depleted. For damage costs in excess of your liability limit, you’re still on the hook.
Liability limits of 100/300/100 mean:
- $100,000 for injuries per person
- $300,000 for injuries per accident
- $100,000 for property damage per accident
That minimum The amount of liability insurance you must carry depends on the state, but these minimum limits are probably not sufficient.
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FAQ on property damage liability insurance
Is property damage liability insurance required?
Property damage liability insurance is required by law in almost all federal states. The minimum sum insured required depends on the federal state.
Even if you only have a small amount of coverage—or none at all in your state—it’s a good idea to get comprehensive liability insurance just in case you cause an accident. You are still legally liable for amounts in excess of your insurance limits if you cause an accident.
How do I report a claim in property damage liability insurance?
If your property was damaged by another driver, you can file a claim with the other person’s insurance company. Be sure to share information at the scene of the accident, including the person’s name, insurance card information, and license plate number.
If possible, take photos at the crime scene. File an accident report with the police – the insurance company may ask for a copy.
Knowing what to do after a car accident to protect yourself from other drivers who want to take advantage of the situation.
Is there a deductible for property damage liability claims?
There is no deductible for property damage liability insurance. A deductible is the amount of money that you are personally responsible for paying in the event of a claim.