Property Damage Liability: What Is It? What Does It Cover?

Carol Chung
Apr 27, 2022 · 9 min read
Property damage liability (PDL) coverage can protect you financially if you’re at fault in a car accident.
It’s one of the two types of car insurance that make up liability insurance, which is mandatory for drivers in many states. But what is property damage liability, exactly? Is it required? Can it be bought by searching for car insurance quotes online? Read on to learn everything you should know about this type of auto coverage.
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What is property damage liability?

Property damage liability is one of the core components of standard car insurance, along with bodily injury liability coverage. By definition, if you’re found to be responsible for a car accident, property damage liability covers the costs associated with any damage you cause to other people’s vehicles or property.
What it doesn’t cover, however, is damage to your own car. For that, you should consider getting collision coverage or comprehensive car insurance on your policy.
Collision coverage will pay to repair or replace your vehicle if it's damaged in a crash with another car. Comprehensive car insurance covers you when another event, such as a falling tree or extreme weather event, causes damage to your car.

Property damage liability coverage

Property damage liability covers other people’s cars and property, which can include things like building fronts, mailboxes, and fences. If you rear-end someone, your coverage will pay the cost to repair their vehicle. If you accidentally back into a neighbor’s front gate, your coverage will pay to repair the damage.
Property damage liability may even cover personal items that are in someone else’s car at the time of an accident. If the other party had a laptop in their car and it was damaged, they can file a claim through your insurance company to get a payout for their damaged computer.

How does property damage liability work and what are the coverage limits?

When you buy property damage liability coverage, you have to select a limit. If you choose a split limit policy, it typically distributes your coverage into three parts: bodily injury liability per person, bodily injury liability per accident, and property damage liability per accident.
These parts are commonly expressed in number form–25/50/20, for example. The first two numbers refer to your bodily injury liability limits per person and per accident. The last number refers to your property damage liability limit.
In the above example, the number 20 stands for $20,000. That means if you have a property damage liability limit of $20,000, your coverage will pay up to $20,000 for the combined property damage in an accident that you caused.
In some states, drivers have the option to buy a combined single limit (CSL) policy for both bodily injury liability and property damage liability. The limit represents the maximum amount that will be paid out for all injuries and property damage in an accident.
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How much property damage liability do I need?

States generally require drivers to get a minimum level of property damage liability insurance. The mandatory limits can vary significantly by state; they range from $5,000 to $25,000 per accident.
At the low end of the scale, states like California and Massachusetts have a mandatory property damage liability limit of $5,000. At the midrange, there are states like Maryland and Iowa with a mandatory limit of $15,000. And at the top of the scale, with a mandatory limit of $25,000, you’ll find states including Mississippi and North Dakota.

How much property damage liability car insurance should I have?

According to the Insurance Information Institute, the average liability claim for property damage is $3,841. That’s less than the mandatory minimum limit in every state.
However, this number could spike if you’re found responsible for a major accident. If the costs of the property damage exceed your limit, you still have to pay the remaining balance and you may be sued. If the court rules against you, your assets can be seized to pay off the balance.
To avoid this kind of worst-case scenario, it’s recommended that you go beyond your state’s minimum limit and get as much property damage liability coverage as you can afford.
Limits for property damage liability coverage typically range from $5,000 to $100,000. Try to aim for a limit that matches your overall net worth; this will provide protection for your assets) in the event of a lawsuit.

What does property damage liability cost?

The cost of property damage liability varies depending on the driver, the state, and the insurance company.
If you opt for your state’s minimum requirements for coverage, you can expect to pay less than if you buy additional coverage above the minimum. If you live in an area with more drivers, there’s a greater chance that you’ll get into a car accident and your property damage liability cost will likely increase.
If you choose a combined single limit for bodily injury and property damage liability, you may be charged more since the flexibility of a CSL makes it more expensive to insure.

Is property damage liability the only liability coverage I need?

There are other forms of liability coverage that you may be required to have, including the following:
Bodily injury liability: Most states require bodily injury liability. Along with property damage liability, this is one of the two main components of liability car insurance. It covers costs associated with injuries suffered by others if you’re at fault in an accident. The minimum requirement for bodily injury liability coverage varies from state to state.
Personal injury protection (PIP): People are required to carry a minimum level of PIP coverage in 13 states. PIP pays for your medical expenses after a car accident. It can even cover you if you’re a passenger in someone else’s vehicle, or if you’re struck by a car as a bystander or cyclist.
Medical payments coverage (MedPay): MedPay coverage is optional in all but two states. It covers medical expenses for you, your family, and passengers in your car, regardless of who’s at fault for the accident. MedPay is intended to complement standard liability insurance, and it may be used to enhance PIP coverage.
Uninsured and underinsured motorist coverage: Uninsured and underinsured motorist insurance is required in 22 states. It’s actually two separate types of insurance that are frequently grouped together by insurers. Uninsured motorist coverage applies when a car accident isn’t your fault and the at-fault driver doesn’t have liability insurance to pay for your injuries or property damage. Underinsured motorist coverage kicks in when the at-fault driver does have liability insurance, but not enough to cover your costs.
Comprehensive and collision coverage: No state laws require drivers to carry these coverage types, but you’re usually required to have them if you lease or finance your car. Both comprehensive and collision coverage pay for physical damage to your car. Comprehensive coverage kicks in if your car is stolen or damaged outside of a collision. Collision coverage insures your car against damage suffered in a collision with another vehicle or object; it pays regardless of who’s at fault.
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Frequently Asked Questions

What is considered property damage?

In the context of property damage liability, property damage is the damage or destruction of property owned by a third party in a car accident. As the policyholder, you are the first party. Your insurance company is the second party.

What is a good amount of liability insurance?

To get adequate protection, it’s recommended that you purchase more coverage than is required by your state. Be sure to check your state’s minimum requirements when you’re looking to buy liability insurance, which includes both property damage liability and bodily injury liability. Consult your insurance company or agent to decide how much coverage you need beyond the state minimum.

What is considered property damage in a car accident?

In an accident, property damage encompasses vehicles, physical structures, and personal items. For example, if you wipe out on an icy road, sideswipe a fence, and strike another car that contains a valuable GPS device, your property damage liability coverage may pay to repair the fence and the other driver’s car and replace the GPS.

How do you assess property damage?

When you’re the at-fault driver in an accident, there’s no assessment required on your part. Instead, a claim representative or insurance adjuster will appraise any damage. They will settle on an appropriate amount to pay out to others to repair or replace their damaged property.

What is the difference between collision and property damage insurance?

Property damage liability covers damage that you’ve caused to other people’s property. Collision coverage protects your own vehicle in the event that it strikes another car or object.

Is there a deductible for property damage liability?

No, there’s no deductible for property damage liability coverage. In fact, liability car insurance never requires a deductible.

How to search for property damage liability insurance quotes

Quotes for property damage liability insurance can be gathered online. You can visit the website of several insurance companies, fill out a long form on each site, compare prices and coverage limits, and then deal with the required phone calls and paperwork to buy your new policy (and cancel your old one, if necessary).
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