What is property damage liability insurance?  – Forbes consultant

What is property damage liability insurance? – Forbes consultant

Editorial note: We earn commission from partner links on Forbes Advisor. Commissions do not influence the opinions or ratings of our editors.

When you travel, the last thing you expect to happen is an accident. Not to mention one you caused. But most states require car owners to carry a minimum level of auto insurance so that drivers have a way to pay for the accidents they cause.

Here’s how to understand property damage liability insurance.

What is Property Damage Liability?

Property damage liability is a type of insurance that, together with personal injury liability, ensures that drivers can pay for losses when they are responsible for an accident. If you cause damage to another person’s vehicle or property, then property damage liability insurance comes into play.

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

  • There is no state mandatory insurance law in New Hampshire (although some New Hampshire drivers must purchase auto insurance, such as drivers who have previously caused an accident).
  • In Virginia, car owners can pay an uninsured motor vehicle tax of $ 500 if they do not wish to purchase liability coverage.

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

What does property damage liability insurance cover?

Property damage liability insurance covers two main types of damage caused to other people:

Another person’s vehicle. Whether you accidentally hit someone’s bumper while driving away from a parking lot or cause an accident totaling another driver’s vehicle, you are financially liable for the damage. Property damage liability will pay for this vehicle damage, including the cost of repairing or replacing someone else’s vehicle, up to the limit stated in the policy.

Property of another person. Let’s say you swerved to avoid an animal on the road and crashed into someone’s fence. Or you accidentally hit a neighbor’s mailbox. Property damage liability insurance also covers these types of damage.

Keep in mind that this type of insurance does not cover your vehicle. Purchase comprehensive and collision coverage if you want insurance for damage or theft of your vehicle.

How much does property damage liability insurance cost?

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

Average liability insurance costs vary somewhat by state – the cheapest liability insurance cost is in North Dakota ($ 312.30 per year), and the most expensive is in Louisiana ($ 312.30 per year). 1,023.91 per year).

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

You can shop around for the cheapest auto insurance rates by getting quotes from different insurance companies.

How Much Property Damage Liability Coverage Do I Need?

It’s smart to buy enough liability insurance to cover what you might lose in a lawsuit. For example, car owners with high net worth should have high-level liability insurance, including property damage liability.

Consider at least $ 100,000 in property damage liability. For example, if you cause an accident that damages multiple cars, your $ 100,000 coverage can run out quickly. You are still ready for damage costs that exceed the liability limits.

The liability limits of 100/300/100 mean:

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

The minimum the amount of liability insurance you need to carry depends on the state, but these minimum limits are probably insufficient.

The best car insurance companies 2022

With so many choices for auto insurance companies, it can be difficult to know where to start in order to find the right auto insurance. We’ve evaluated insurers to find the best auto insurance companies, so it’s not necessary.

Frequently Asked Questions About Property Damage Liability Insurance

Do you need property damage liability insurance?

Property damage liability insurance is required by law in nearly all states. The minimum amount of coverage required depends on the state.

Even if you’re only required to carry a small amount of coverage, or no coverage in your state, it’s a good idea to have extensive liability insurance in case you cause an accident. You are still legally liable for amounts exceeding the insurance limits in the event of an accident.

How do I file a property damage claim?

If your property has been damaged by another driver, you can file a claim with the other person’s insurance company. Be sure to exchange information about the crash site, including the person’s name, insurance card information, and license plate number.

Take photos of the scene if possible. Submit an accident report to the police: The insurance company may request a copy.

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

Is there an excess for property damage liability claims?

There is no deductible for liability insurance. A deductible is the amount of money that you are personally responsible for paying in the event of a claim.

Leave a Comment

Your email address will not be published.