Property damage liability coverage helps pay for damage to someone else’s car or other property due to an accident you caused, up to the policy’s limits. It will also cover damage you may cause to structures and stationary objects, including houses, stores, offices, trees, fences, guardrails, lamp posts, telephone poles, and more.
Property damage liability insurance does not cover damage to your own car. To repair that damage, you will need the physical damage coverage of your collision and comprehensive policies.
Property damage coverage is one of two types of liability auto insurance. The other, bodily injury liability insurance, covers injuries to the other driver and any passengers. Some minimum amount of both types of liability car insurance is typically required by states.
We’ll discuss exactly how property damage liability insurance works, what it costs, and how much you need below.
How It Works
Liability insurance packages come in two varieties: combined single limit policies and split limit policies. In a combined single limit policy, your policy will offer a certain amount of coverage, and you can decide how to divide that coverage between bodily injury and property damage.
When it comes to split limit policies, however, your insurance company will decide how much it will pay out for each type of liability coverage. You will often see such policy packages described using a numeric shorthand like this:
While the first two numbers apply to bodily injury coverage, we’ll focus on the last, which applies to property damage coverage. In this example, this policy would pay up to $20,000 to repair damage to others’ property in an accident you caused. Let’s look at two scenarios.
Scenario 1: Minor damage. Let’s say you swerved to avoid a squirrel, hop the curb, and hit a neighbor’s fence, causing $5,000 in damage. Your policy would completely cover the cost to repair or replace the fence.
Scenario 2: Major damage. Let’s say you are driving on the highway when you lose control of your car and hit two vehicles, causing $5,000 damage to one car and totaling another car worth $20,000. Your policy would pay up to $20,000, but you would be responsible for the remaining $5,000 in damage.
How Much Is Required?
Most states require drivers to carry a minimum amount of bodily injury and property damage liability insurance. Your state’s minimum property damage liability coverage amount is provided in the map and table below.
State | Minimum coverage limit per accident | State | Minimum coverage limit per accident | |
|---|---|---|---|---|
| Alabama | $25,000 | Montana | $10,000 | |
| Alaska | $25,000 | Nebraska | $25,000 | |
| Arizona | $10,000 | Nevada | $10,000 | |
| Arkansas | $25,000 | New Hampshire | $25,000 | |
| California | $5,000 | New Jersey | $5,000 | |
| Colorado | $15,000 | New Mexico | $10,000 | |
| Connecticut | $10,000 | New York | $10,000 | |
| Delaware | $10,000 | North Carolina | $25,000 | |
| District of Columbia | $10,000 | North Dakota | $25,000 | |
| Florida | $10,000 | Ohio | $25,000 | |
| Georgia | $25,000 | Oklahoma | $25,000 | |
| Hawaii | $10,000 | Oregon | $20,000 | |
| Idaho | $15,000 | Pennsylvania | $5,000 | |
| Illinois | $15,000 | Rhode Island | $25,000 | |
| Indiana | $10,000 | South Carolina | $25,000 | |
| Iowa | $15,000 | South Dakota | $25,000 | |
| Kansas | $10,000 | Tennessee | $15,000 | |
| Kentucky | $10,000 | Texas | $25,000 | |
| Louisiana | $25,000 | Utah | $15,000 | |
| Maine | $25,000 | Vermont | $10,000 | |
| Maryland | $15,000 | Virginia | $20,000 | |
| Massachusetts | $5,000 | Washington | $10,000 | |
| Michigan | $10,000 | West Virginia | $10,000 | |
| Minnesota | $10,000 | Wisconsin | $10,000 | |
| Mississippi | $25,000 | Wyoming | $20,000 | |
| Missouri | $10,000 |
Minimum coverage requirements last updated November 2014
Note that some states give you the option to forgo car insurance if you have enough assets to “self insure.” In these states, you may have to deposit significant funds that could be used if you caused an accident, or post a bond. If you—like the vast majority of drivers—opt not to “self insure,” then you are required to meet at least the minimums above.
How Much Does It Cost?
When purchasing property damage liability insurance, consider how much it would cost to purchase more coverage than required by your state. You can use the WalletHub Car Insurance Calculator to compare quotes for different levels of property damage liability coverage.
The table below provides an example of the average additional cost drivers in Los Angeles may incur annually if they increase their property damage liability limits above a baseline of $10,000.
Added annual cost for additional coverage
| Property Damage Coverage Limits | From $10K to $25K | From $10K to $50K | From $10K to $100K |
|---|---|---|---|
| Driver with clean driving history | $88 | $114 | $141 |
| Driver with recent speeding ticket | $188 | $231 | $273 |
| Driver with recent accident | $146 | $182 | $210 |
Note: Average calculated from quotes by multiple insurance providers for a 37-year old female with excellent credit in zip code 90001 driving a 2008 Honda Accord.
*Monthly cost also includes $50,000/$100,000 bodily injury liability insurance and collision and comprehensive insurance with $500 deductibles.
How Much Coverage Should I Buy?
Most state requirements are relatively low, and property damage costs can easily exceed those limits. While the Insurance Research Council found that the average property damage liability claim was just over $3,000 in 2012, you could easily exceed the minimum required coverage if you damage or total a new, expensive car in an accident. The average new car costs over $30,000 today, according to TrueCar.com. Keep in mind that if the damages exceed your limit that the other party may sue you for the difference, putting your savings and assets at risk. We recommend you buy maximum property damage coverage you can afford.