Auto Insurance Property Damage: What's Covered And What's Not

Property damage liability insurance is a type of auto insurance coverage that pays for damage to another person's property if the policyholder is at fault in a car accident. This includes damage to other cars, buildings, and structures like fences and telephone poles. Property damage liability insurance is required by law in most states, with minimum coverage amounts varying by state. This type of insurance does not cover injuries caused in a crash or damage to the policyholder's car, which would be covered by collision coverage or comprehensive coverage.

What is covered under property damage liability insurance?

Property Damage Liability (PDL) insurance covers damage to another person's property or belongings in the event of a car accident that was the policyholder's fault. This includes damage to another person's car, as well as other types of property such as buildings, fences, lamp posts, telephone poles, traffic signs, mailboxes, trees, and landscaping. PDL coverage is required by law in most states, with each state setting its own minimum coverage requirements.

If you cause an accident and the cost of damages exceeds the amount of your PDL coverage, you will be responsible for paying the remaining cost out of pocket. Therefore, it is important to consider your budget, the value of your assets, and your driving history when deciding on the amount of PDL coverage you need. You may also want to take into account whether you live in an area with a lot of expensive vehicles or if you frequently drive in high-traffic areas.

It is worth noting that PDL coverage does not cover damage to your own vehicle or property. For that, you would need additional coverage such as collision coverage or comprehensive coverage. Additionally, PDL coverage does not include injuries you cause in a crash; separate coverage is required for that.

What is not covered by property damage liability insurance?

Property damage liability insurance is a type of auto insurance that covers damage to another person's property or vehicle as a result of a car accident that was the driver's fault. While it covers damage to another person's vehicle, it does not cover damage to your own vehicle. Here are some things that property damage liability insurance typically does not cover:

• Damage to your own vehicle: Property damage liability insurance will not cover repairs or replacement costs for your own vehicle. For that, you would need to purchase additional coverage, such as collision and comprehensive insurance.
• Medical expenses: This type of insurance only covers property damage and does not include coverage for any medical bills or injuries sustained in the accident.
• Intentional damage: If the driver intentionally caused the accident or was committing a felony, the damage may not be covered by property damage liability insurance.
• Damage by an unauthorised driver: If someone else was driving your car without your permission and caused an accident, the damage may not be covered.
• Pre-existing damage: If the damage to the property was pre-existing and not a direct result of the accident, it may not be covered.
• Fraudulent claims: If the damage was a result of fraud or deception, the insurance company may deny the claim.
• Excluded property: Certain types of property may be specifically excluded from coverage under the policy.

It is important to carefully review your insurance policy to understand what is and is not covered by your property damage liability insurance. Each policy has its own limitations and exclusions, so it is essential to know what your specific coverage entails.

How much property damage liability insurance is required?

Property damage liability insurance is one of the major types of coverage that drivers are required by law to have. This insurance covers the cost of damage caused to others' property in an accident. This includes damage to their car, house, or any other type of personal property. The cost of repairs to the other person's vehicle is also covered by this insurance, including auto body shop labour or replacement parts.

The amount of property damage liability insurance required varies by state and lender. The minimum amount of car insurance typically required is state-mandated liability coverage. This allows the policyholder to pay for some, if not all, injuries and damages for which they are liable in an accident. The most commonly required liability limits are $25,000/$50,000/$25,000, which means:

• $25,000 in bodily injury per person
• $50,000 in total bodily injury per accident
• $25,000 for property damage per accident

However, individual state requirements vary widely. While some states mandate higher or lower limits than these, others require additional coverages, such as personal injury protection. If you are leasing or financing your car, your lender may require you to carry liability coverage above your state's minimum limits, in addition to comprehensive and collision coverage.

It is important to note that state minimum car insurance requirements are just that—minimum coverage. It is recommended to carry more liability coverage than what is legally required to avoid paying the difference. In fact, 61% of Progressive customers choose more coverage than their state requires.

When deciding on the amount of property damage liability insurance to purchase, it is essential to consider your net worth and the value of your assets. Property damage liability insurance will cover the costs of damage to another person's property up to your policy limits. If the damage caused by the accident exceeds the amount of coverage, you will be responsible for the remaining cost. Therefore, it is advisable to choose a higher limit for this coverage to ensure sufficient protection.

What happens if property damage exceeds coverage?

If the cost of property damage exceeds your auto insurance coverage, you will be responsible for the remaining cost. This means that you will have to pay out of pocket for any damage costs that exceed your policy's property damage liability limit.

For example, if your policy has a property damage liability limit of $10,000 and you cause $10,500 in damage to another person's car and property, your insurer will cover $10,000 of the repair costs, and you will be responsible for the remaining $500.

If you are found to be at fault for an accident and the costs exceed your insurance coverage, you may be held responsible for all the damage you have caused. In this case, a judge may garnish your salary or place a lien on your property to force you to pay for the damage.

To avoid this situation, it is recommended to purchase higher levels of liability coverage than the state-mandated minimums. You can also consider adding an umbrella insurance policy, which can provide additional coverage on top of your regular car insurance.

How do you file a property damage claim?

If you have damaged someone else's property, they will need to file a claim with your insurance company. You should exchange information at the scene of the accident, including your name, insurance card information, and license plate number. It is also a good idea to take photos of the scene and file an accident report with the police.

If you are filing a claim for damage to your own property, you will need to have collision insurance. You can then file a claim with your insurance company by calling them. For glass-only claims, you may need to call a different number.

Frequently asked questions