What is Property Damage Liability in Car Insurance?
<lingo>When you are found to be at fault for a car accident, property damage liability covers the cost of repairing or replacing the other car(s) involved. It may also apply to other types of damaged property. For example, if one of the cars involved ran off the road as a result of the accident and hit the fence surrounding someone's backyard, this would likely be covered by property damage liability insurance. This type of insurance is required by law in most states, though the minimum amount varies. Keep in mind that it does not cover damage to your own vehicle or personal property. </lingo>
Property Damage Liability Explained
According to the National Highway Traffic Safety Administration (NHTSA), there were roughly 6,296,000 police-reported crashes in the U.S. in 2015, amounting to approximately 17,250 accidents per day. Considering these statistics, the odds are high that the average driver will be involved in some kind of car accident at least once in his or her lifetime. If you are involved in an accident, the chances are pretty high that you will cause at least some damage. Even if you are just partially at fault, this means you will have to pay the cost out of pocket without insurance. What's worse, you might even become embroiled in a lawsuit that can put your home and other valuable assets at risk.
<twitter>According to the NHTSA, there were roughly 6,296,000 police-reported crashes in the U.S. in 2015</twitter>
Fortunately, you are unlikely to find yourself in this situation considering the fact that property damage liability insurance is mandatory in nearly every state. However, mandatory coverage varies from state to state. According to the California Department of Insurance, California drivers are required to have a minimum of $5,000 of property damage liability coverage. In Texas, the minimum coverage amount is $25,000, according to the Texas Department of Insurance.
Consider researching the average cost of property damage liability claims to determine if your state minimum is an amount that you're comfortable with. For peace of mind and added security in the event of an accident, it might be in your best interest to opt for a higher coverage amount.