What Is Property Damage Liability Insurance?
Property damage liability insurance is a type of coverage that pays for damage to someone else’s property, such as their car or home, resulting from an accident caused by the policyholder. Property damage liability coverage is one of two types of liability insurance and is required in most states.
What Property Damage Liability Insurance Covers
- Damage to other cars caused by the policyholder’s vehicle.
- Damage to any structure or stationary object, including houses and fences, caused by the policyholder’s vehicle.
- An established maximum dollar amount of damage per accident.
Property damage liability insurance never covers damage to the policyholder’s own vehicle or property. In order to cover their own vehicle repairs, the policyholder would instead need to use collision or comprehensive coverage.
How Property Damage Liability Works
If you’re at fault for an accident, the other driver files a claim with your liability insurance policy to pay for their property damage expenses, along with their medical bills. Liability insurance also covers your legal fees if you are sued because of an incident.
While liability insurance is designed to pay for the victim’s accident-related expenses, your insurance company does not write a blank check to cover whatever the victim needs. How much the insurance company will pay is determined by policy limits.
Liability insurance policies are described as either a combined single-limit policy or a split-limit policy. Combined single-limit policies don’t differentiate the coverage limits between property damage and bodily injury liability, while split-limit policies specify how much coverage is available per liability insurance type.
Learn more about how property damage liability works.
How Much Property Damage Liability Do You Need?
Most states require drivers to carry at least a minimum amount of bodily injury and property damage liability insurance. The map below shows the minimum amount of property damage liability insurance that each state requires per accident.
| State | Property Damage Liability Limit |
|---|---|
| Alabama | $25,000 |
| Alaska | $25,000 |
| Arizona | $15,000 |
| Arkansas | $25,000 |
| California | $5,000 |
| Colorado | $15,000 |
| Connecticut | $25,000 |
| Delaware | $10,000 |
| District of Columbia | $10,000 |
| Florida | $10,000 |
| Georgia | $25,000 |
| Hawaii | $10,000 |
| Idaho | $15,000 |
| Illinois | $20,000 |
| Indiana | $25,000 |
| Iowa | $15,000 |
| Kansas | $25,000 |
| Kentucky | $25,000 |
| Louisiana | $25,000 |
| Maine | $25,000 |
| Maryland | $15,000 |
| Massachusetts | $5,000 |
| Michigan | $10,000 |
| Minnesota | $10,000 |
| Mississippi | $25,000 |
| Missouri | $10,000 |
| Montana | $20,000 |
| Nebraska | $25,000 |
| Nevada | $20,000 |
| New Hampshire | $25,000 |
| New Jersey | $5,000 |
| New Mexico | $10,000 |
| New York | $10,000 |
| North Carolina | $25,000 |
| North Dakota | $25,000 |
| Ohio | $25,000 |
| Oklahoma | $25,000 |
| Oregon | $20,000 |
| Pennsylvania | $5,000 |
| Rhode Island | $25,000 |
| South Carolina | $25,000 |
| South Dakota | $25,000 |
| Tennessee | $15,000 |
| Texas | $25,000 |
| Utah | $15,000 |
| Vermont | $10,000 |
| Virginia | $20,000 |
| Washington | $10,000 |
| West Virginia | $25,000 |
| Wisconsin | $10,000 |
| Wyoming | $20,000 |
Minimum coverage requirements are per accident and last updated June 2021
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 Property Damage Liability Insurance Cost?
In general, the cost of property damage liability insurance depends on how much you purchase. The higher your limits are, the more expensive your coverage is going to be.
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 Property Damage Liability Insurance Should I Buy?
When purchasing property damage liability insurance, consider whether you can afford to purchase more coverage than is required by your state. Most state requirements for property damage liability are relatively low, and if property damage costs exceed those limits, you are financially liable for paying the remaining balance. In that case, the other party may sue you, putting your savings and assets at risk.
While the average property damage liability claim was $3,841 in 2018, according to the Insurance Services Office, your costs could spiral if you are found responsible for a major accident. We recommend that you buy the maximum amount of property damage coverage that you can afford. At the very least, you should purchase limits that are equal to your net worth, which will protect your assets if you’re sued. If your net worth is particularly high, you can supplement your property damage liability limits with a personal umbrella policy.
