What is Liability Insurance?

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When you hit the road, the last thing you want to happen is an accident. Leave the one you started. But many states require car owners to carry car insurance so that drivers have a way to pay for the accidents they cause.

Here’s how to understand property damage insurance.

What is a property damage loan?

Property damage liability is a type of insurance that, along with bodily injury liability, ensures that drivers can pay for losses when they are involved in an accident. If you damage someone else’s car or property, that’s where property damage insurance comes into play.

Property damage insurance is required by law in almost all states, with two exceptions:

  • In New Hampshire, there is no state-mandated insurance policy (although some New Hampshire drivers must purchase auto insurance, such as drivers who cause accidents).
  • In Virginia, car owners can pay a $500 fine for an uninsured car if they don’t want to buy insurance.

Even if your state doesn’t require auto insurance, it’s a smart move to have it.

What Does Property Damage Insurance Cover?

Property damage insurance covers two types of damage you cause to other people:

Someone else’s car. Whether you hit someone else’s bumper while pulling out of a parking space or caused a full-on collision with another driver’s car, you are responsible for the costs. Property damage coverage will pay for damage to the vehicle, including the cost of repairing or replacing someone else’s vehicle, up to the limits listed in your policy.

Someone else’s wealth. Let’s say you swerve to avoid an animal in the road and crash into someone’s fence. Or you accidentally passed your neighbor’s mailbox. Property damage insurance covers these types of damages.

Note that this type of insurance does not cover your car. Buy everything and hit Learn if you need insurance for damage or theft of your car.

How Much Does Property Damage Insurance Cost?

The average annual cost of car insurance (property damage and bodily injury liability) is $650.35, according to the most recent data from the National Association of Insurance Commissioners.

The cheapest insurance price is in North Dakota ($312.30 per year) and the most expensive is in Louisiana ($1,023.91 per year).

The cost of car insurance, including property damage insurance, is based on many factors, including your location, age, gender, driving history, credit and more.

You can shop for the cheapest car insurance rates by getting quotes from several insurance companies.

How Much Property Damage Insurance Do I Need?

It is wise to purchase enough insurance to cover your potential losses in a lawsuit. For example, car owners who have a lot of money should have a high level of insurance, including property damage.

Consider finally $100,000 in property damage loans. If you cause an accident that damages multiple vehicles, for example, $100,000 in damages can be used up quickly. You are still on the hook for expenses that are above what you have.

Credit limit 100/300/100 means:

  • $100,000 per injury per person
  • $300,000 for injuries per accident
  • $100,000 for property damage in an accident

The at least The amount of insurance you are required to carry depends on the state, but these minimum limits are not sufficient.

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Property Damage Insurance FAQ

Is property damage insurance required?

Property damage insurance is required by law in almost every state. The minimum amount required depends on the state.

Even if you need to carry only a few—or none at all in your area—it’s a good idea to have comprehensive damage insurance in case you cause an accident. You are responsible for paying the amount above your insurance if you cause an accident.

How do I apply for property damage insurance?

If your property was damaged by another driver, you can file a claim with the other person’s insurance company. Be sure to exchange information at the scene of the accident, including the person’s name, insurance card information and license plate number.

Take pictures of the place if possible. File an accident report with the police—the insurance company may request a copy.

Learn what to do after a car accident to protect yourself from other drivers who may want to take advantage of the situation.

Is there a policy for property damage complaints?

There is no deductible for property damage insurance. The deductible is the amount of money you are responsible for paying in the event of a claim.