Property Damage Liability Car Insurance Coverage 101: Introduction

Property damage liability coverage is an important part of an auto insurance policy. Depending on how much property damage liability you have on your policy, you'll be covered up to a certain amount for any damages that you and your vehicle incur on another vehicle or piece of property.

If you cause an accident and are deemed "at fault," by your car insurance policy, then your auto insurance company will help the other driver pay for any repair costs to their vehicle and cover damage to their personal property (in case you were talented enough to run into their mailbox, for instance).

If you've ever wondered exactly what your property damage plan covers, how to make a claim, and why you need it, then this article is for you! 

Let's take a quick look at why this basic level of property damage coverage is required by all drivers in the country.

Property Damage Liability Definition

Property damage liability car insurance coverage is a type of auto insurance product that covers car or property damage repair expenses for damage caused by you to another party, aka you are the at fault side in an auto accident and damaged someone else's vehicle or property. 

As you know, car accidents and road crashes do happen. You missed a stop sign or a red light, were over speeding, made an illegal turn, texted while driving... unfortunately, these life threatening driving habits are too frequent, and sometimes can result in an accident - an accident that you, being non-compliant with the law, assuming that you actually survive it, are legally responsible for. 

Even if the person in the vehicle that you collided with has auto insurance, he has no legal responsibility to pay for these damages. 

In this case, the costs fall squarely on you. And in the case that you accidentally violate a rule, such as driving on a red light, the collision can result in a fairly serious damage to the vehicle you collide with - and a serious expense to cover.

You may want to ask yourself the following questions while exploring your options: 

• Do I have a tendency to space out? 
• Do I consistently follow the rules, or do I often break them out of habit, impatience or impulsiveness? 
• Do I drive when I am tired, or at night when there is less visibility? 
• Do I drive in areas of traffic, or areas where there is barely any other vehicles? 
• Do I have road rage issues?

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What Does Property Damage Liability Insurance Cover?

In the U.S., almost every state requires drivers to have this property damage liability coverage to repair or replace victim's personal property so that they don't have to pay out of pocket. Without a property damage insurance plan, you would be in a LOT of trouble should you ever cause an accident.

As an at-fault driver without insurance, the victim could legally sue you for damages. You would have to pay to repair their car, pay for any surrounding damage (say a wheel flies off and hits another car), and any other damages. Most people simply don't have an extra $10,000 - $25,000 lying around to cover these costs. This is why states have certain minimum limits on coverage amounts that you must purchase from your auto insurance provider.

Here is a comprehensive list of what a standard property damage insurance policy covers.

Damage To The Victim's Car

Depending on what type of car you hit and how hard you hit it during the accident, their vehicle repair costs could be a few hundred bucks or could easily be $10,000. Hitting a brand-new Mercedes AMG-class with a $5,000 bumper is a lot more expensive than hitting an old Honda with a $500 bumper.

Unfortunately, though, you'll never be able to control what type of car is involved in an accident (hence why it's called an accident). Nobody plans an accident, so the point of property damage auto insurance plans is to make sure that no matter what happens to another driver's car or property, that you don't have to front the bill yourself.

Damage To Surrounding Vehicles

In a best-case scenario, the damage is limited to your vehicle and the other driver's vehicle. However, sometimes the damage spreads and impacts other drivers too. This is where your car insurance policy comes in, especially your property damage policy.

This policy may cover the damage done to another vehicle in the area. It will pay for the cost of their vehicle repairs or personal property, depending upon the minimum amount of your coverage limit. The higher that your coverage limit is, the more damage that your insurance company will cover and the less you'll have to pay out of pocket.

One of the main reasons that car insurance is legally required in most states is to protect innocent bystanders. For instance, if you weren't insured by an insurance company, then you would be 100% liable for all damage to personal property. If you couldn't pay the amount, then the victim would be left to pay to repair their property with their own money (which would be incredibly unfair).

This is why the minimum amount of coverage varies significantly from one state to another. The higher the property and vehicle value in a certain state, the higher that the insurance premiums and liability limits will also be.

Damage To Personal Property Caused By Your Vehicle

In addition to paying for the damage to the victim's vehicle, your property damage coverage limits will also help pay for any damage caused to personal property. For example, if you are involved in an accident that causes damage to a bystander's front lawn or storefront, then your insurance company will front the bill required to replace that individual's grass lawn or their glass storefront if you're involved in an at-fault accident.

This is yet another example of why auto insurance is required in every state. Every year, there are over six million car accidents in the United States. Most of them are completely unplanned, which is where an insurance company can step in to replace the victim's property depending on the coverage limits imposed by the policyholder.

How Much Property Damage Liability Auto Insurance Coverage Do I Need?

Depending on which state you live in, there will usually be a minimum amount that you'll have to pay for property damage coverage. The higher the value of property in the state is, the higher coverage limits that you'll have to pay for in our monthly premium.

This is usually decided based on your zip code and the statistics of the area. There may also be a "per person" insurance amount that you'll be required to pay depending on how many people were involved in the accident.

How Do Property Damage Insurance Claims Work?

So, let's just say that you were recently involved in a vehicular accident...

Your first step would be to exit the car (as long as you don't have any medical injuries) and share your insurance information with the other driver. While the two of you call your insurance provider and discuss coverage limits, the local police or authorities will arrive. They will help mediate the event.

If anybody needs medical care, then they will call an ambulance. If not, they will ensure that no further damage or argument ensures.

Once your insurance company answers and obtains the details of the event, they will identify which driver is "at fault" and which driver was the "victim."

If you are the victim, then the other driver's insurance will be required to pay for your damages. However, if you are found to be "at fault," then your insurance company will be required to pay for damage to the other driver’s car or property.