There were 6,776,000 traffic accidents in 2019. [1] Thankfully, most of those accidents did not involve any injuries or fatalities, but almost all of them involved some amount of property damage.
Your property damage liability coverage is the part of your car insurance that will pay out if you cause an accident that damages someone else’s property, like if you damage someone else’s car in a crash, or back into your neighbor’s fence. Having enough property damage liability insurance is vital to protecting yourself and others in an accident.
What is property damage liability insurance?
Property damage liability coverage (sometimes shortened to PD) is the part of your car insurance that pays for damage to the other driver’s property when you are at fault in an accident. In a split limit policy, like 50/100/25, property damage liability is represented by the third number.
You need property damage liability insurance to protect yourself financially, because without it you’ll be forced to repair or replace the property you’ve damaged out of your own pocket. For example, if you rear end a car at a stoplight and dent its back fender, it will be paid by your insurance.
Property damage liability doesn’t pay for damage to your own vehicle (that’s what comprehensive and collision coverage do). So if you cause an accident that totals your SUV and the other driver’s sedan, your property damage liability coverage will pay for the other driver’s sedan but not your SUV. Drivers who want coverage for both their vehicle and the other person’s vehicle should consider a full coverage policy.
What’s in a full coverage policy?
Full coverage car insurance includes liability coverage and coverage for your own vehicle. While there is no such thing as a car insurance policy that will cover every conceivable type of damage, some of the most common types of insurance in a full coverage policy are listed in the chart below.
Coverage type | What it does |
|---|---|
Bodily injury liability | Pays for medical bills and expenses if you've injured someone in an accident |
Property damage liability | Covers the cost of property damage you've caused in an accident |
Personal injury protection | Covers medical expenses for you or your passengers after an accident, required in some states |
Uninsured/underinsured motorist | Covers the costs if you're in an accident caused by a driver with little or no car insurance |
Comprehensive | Covers damage to your car that happens when you're not driving |
Collision | Covers damage to your car after a car accident, no matter who was at fault |
→ Learn more about full coverage car insurance
What does property damage liability insurance cover?
Property damage liability insurance covers damage you cause to another person’s property in an at-fault accident, up to the limits of your policy. This includes damage to:
Cars and other vehicles: If you hit someone’s car, your property damage liability coverage will pay to repair or replace their vehicle.
Buildings and structures: If you hit someone’s house, fence, shed, or other physical structure, your property damage liability coverage will pay to repair or replace it.
Public property: If you hit something that belongs to the city or the state, like a lamp post or fire hydrant, your property damage liability insurance would pay to repair or replace it.
Business property: If you hit a post outside of your local grocery store or drive away with the gas pump still in your gas tank, your property damage liability insurance would pay the business back for the damage you caused.
→ Learn more about car insurance claims
How do property damage liability insurance limits work?
A limit is the maximum amount your insurance company will pay out in a claim. For property damage liability coverage, the limit is a per-accident total.
For example, if you have $25,000 in property damage liability insurance and you cause $33,000 in damage in an at-fault accident, the insurance company will pay for the first $25,000 and you will be responsible for paying the additional $8,000 on your own. That’s why it’s important to set high liability limits when you buy car insurance — to make sure you’re fully protected in case of an accident.
Property damage liability insurance limits by state
The amount of property damage liability coverage you need varies by state. As you can see in the chart below, each state sets their own minimum liability requirements, with some requiring as little as $5,000 in coverage.
State | Bodily injury liability per person | Bodily injury liability per accident | Property damage liability per accident |
|---|---|---|---|
$25,000 | $50,000 | $25,000 | |
$50,000 | $100,000 | $25,000 | |
$25,000 | $50,000 | $15,000 | |
$25,000 | $50,000 | $25,000 | |
$15,000 | $30,000 | $5,000 | |
$25,000 | $50,000 | $15,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $10,000 | |
District of Columbia | $25,000 | $50,000 | $10,000 |
Optional, unless otherwise specified by the state | Optional, unless otherwise specified by the state | $10,000 | |
$25,000 | $50,000 | $25,000 | |
$20,000 | $40,000 | $10,000 | |
$25,000 | $50,000 | $15,000 | |
$25,000 | $50,000 | $20,000 | |
$25,000 | $50,000 | $25,000 | |
$20,000 | $40,000 | $15,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $10,000 | |
$15,000 | $30,000 | $25,000 | |
$50,000 | $100,000 | $25,000 | |
$30,000 | $60,000 | $15,000 | |
$20,000 | $40,000 | $5,000 | |
$50,000 | $100,000 | $10,000 | |
$30,000 | $60,000 | $10,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $10,000 | |
$25,000 | $50,000 | $10,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $20,000 | |
Optional; or $25,000 | Optional; or $50,000 | Optional; or $25,000 | |
$15,000 | $30,000 | $5,000 | |
$25,000 | $50,000 | $10,000 | |
$25,000 | $50,000 | $10,000 | |
$30,000 | $60,000 | $25,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $20,000 | |
$15,000 | $30,000 | $5,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $15,000 | |
$30,000 | $60,000 | $25,000 | |
$25,000 | $65,000 | $15,000 | |
$25,000 | $50,000 | $10,000 | |
Optional; or $25,000 | Optional; or $50,000 | Optional; or $20,000 | |
$25,000 | $50,000 | $10,000 | |
$25,000 | $50,000 | $25,000 | |
$25,000 | $50,000 | $10,000 | |
$25,000 | $50,000 | $20,000 |
New Hampshire and Virginia are the only two states that don’t require drivers to have any liability insurance. Drivers in these states are allowed to guarantee they accept responsibility for an at-fault accident by proving they have the money to cover those costs, but the states still highly recommend drivers buy auto insurance. Drivers who do choose to buy auto insurance have to meet the required minimum levels of insurance.
Some states have no-fault insurance laws, but this only applies to bodily injury liability insurance. No-fault laws are for injuries and medical expenses, not property damage, so drivers in no-fault states still need to purchase property damage liability coverage.
→ Learn more about car insurance requirements in every state
How much property damage liability insurance do I need?
There are two ways to think about how much property damage coverage you need. At a minimum, you need to have the amount of insurance required by law, which varies from state-to-state.
However, the legally required minimum amount of coverage in your state often isn’t enough to cover a serious accident. This means that the second answer to this question is that you should have as much liability insurance as you can afford. Your best bet is to buy a minimum of $100,000 per accident in property damage coverage.
This may sound like a lot, but it is easy to cause a significant amount of property damage. For example, if you accidentally drive through the wall of someone’s home or total a Tesla on the highway, a property damage liability limit of $25,000 won’t be enough to cover all of that damage.
→ Learn more about recommended amounts of car insurance coverage
Frequently asked questions
How do you file a property damage liability claim?
If you were not at fault in an accident and the other driver damaged your car (or other property) you can reach out to the other driver’s insurance company and file a claim. When you file a claim, it can be helpful to have a police report, photos of the accident, or other documentation, but you can still file a claim without those things.
How much does property damage liability insurance coverage cost?
Liability insurance is usually the cheapest portion of your car insurance, but costs will vary based on a number of factors, including your age and your driving history. On average, a car insurance policy that just includes the minimum amount of car insurance required by law costs $621 a year.
What happens if I don’t have enough property damage liability insurance?
If you don’t have enough property damage liability insurance to pay for all the damage you caused in an at-fault accident, you will still be held liable for those costs (meaning you have to pay them). You may be taken to court and forced to pay out-of-pocket for any expenses that exceed the limits of your policy.
