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Property damage car insurance helps pay for damage you cause to another person's vehicle or property after a car accident where you're at fault.
This type of insurance also protects you and your family from unexpected liability costs arising from claims against you. Understanding how property damage coverage works can help you determine how much coverage is appropriate for you.
What Does Property Damage Car Insurance Cover?
Property damage car insurance is a type of liability insurance that kicks in when you're responsible for a car accident. The property damage portion of your liability coverage pays to repair anything you damage, such as another vehicle, a fence, a mailbox or a building. It can also pay for any related legal expenses after you damage property.
The other portion of liability coverage, called bodily injury, pays medical bills for people you injure in the accident. It does not, however, cover you and your passengers.
Liability coverage comes with all standard auto insurance policies. Your policy can pay for claims up to your coverage limits, which are typically written as three separate numbers separated by slash marks. For example, you might carry auto insurance with liability coverage limits of $30,000/$60,000/$10,000. The coverage limit is commonly shortened to "30/60/10." Here's what the numbers mean:
- $30,000: The maximum amount your insurer will pay for bodily injuries per person.
- $60,000: The total amount your insurer will pay for bodily injuries per accident.
- $10,000: The maximum your insurer will pay for property damage per accident.
Liability coverage does not protect your own car or pay for your own medical bills following an accident. But other types of car insurance, like collision and comprehensive, can provide coverage for you.
Is Property Damage Car Insurance Required?
Property damage car insurance is required in most states, but the details depend on where you live. All 50 states have "financial responsibility" laws, which require drivers to prove they can pay for liability or any damage they cause in a car accident. Most states require drivers to buy auto insurance to comply with these laws.
But some states, like New Hampshire and South Dakota, provide other options for meeting the requirements. For example, you might be able to provide a surety bond, a cash deposit or a certificate of self-insurance to demonstrate your ability to cover potential accident costs.
If you get car insurance to satisfy requirements, you'll need to buy at least the minimum amount of coverage required in your state. These limits vary across the U.S., ranging from $5,000 to $25,000.
Learn more >> How Much Car Insurance Do I Need?
How Much Property Damage Car Insurance Do I Need?
Each state sets a minimum amount of property damage coverage that drivers need to buy. You can choose higher liability limits to better protect your assets. This will increase your premiums, but the cost may be worthwhile. That's because your car insurance company will only pay up to your policy limits. If you're legally responsible for costs beyond those limits, you'll have to pay the difference out of pocket.
For example, say you cause $20,000 in damage to a vehicle after rear-ending it. Your property damage auto insurance limit is $15,000 and you have a $500 deductible. The insurance company would pay out $14,500 (the limit minus the deductible) and you'd have to pay the other $5,500 in costs.
To choose the right amount of car insurance, consider your own needs, your driving habits and state law. Here's the minimum amount of property damage insurance needed in each state:
| Minimum Property Damage Liability Insurance | |
|---|---|
| State | Requirement |
| Alabama | $25,000 |
| Alaska | $25,000 |
| Arizona | $15,000 |
| Arkansas | $25,000 |
| California | $15,000 |
| Colorado | $15,000 |
| Connecticut | $25,000 |
| Delaware | $10,000 |
| District of Columbia | $10,000 |
| Florida | $10,000 |
| Georgia | $25,000 |
| Hawaii | $10,000 |
| Idaho | $15,000 |
| Illinois | $20,000 |
| Indiana | $25,000 |
| Iowa | $15,000 |
| Kansas | $25,000 |
| Kentucky | $25,000 |
| Louisiana | $25,000 |
| Maine | $25,000 |
| Maryland | $15,000 |
| Massachusetts | $5,000 |
| Michigan | $10,000 |
| Minnesota | $10,000 |
| Mississippi | $25,000 |
| Missouri | $25,000 |
| Montana | $20,000 |
| Nebraska | $25,000 |
| Nevada | $20,000 |
| New Hampshire | $25,000 |
| New Jersey | $25,000 |
| New Mexico | $10,000 |
| New York | $10,000 |
| North Carolina | $25,000 |
| North Dakota | $25,000 |
| Ohio | $25,000 |
| Oklahoma | $25,000 |
| Oregon | $20,000 |
| Pennsylvania | $5,000 |
| Rhode Island | $25,000 |
| South Carolina | $25,000 |
| South Dakota | $25,000 |
| Tennessee | $25,000 |
| Texas | $25,000 |
| Utah | $25,000 |
| Vermont | $10,000 |
| Virginia | $25,000 |
| Washington | $10,000 |
| West Virginia | $25,000 |
| Wisconsin | $10,000 |
| Wyoming | $20,000 |
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The Bottom Line
Property damage car insurance is legally required in most states. Even when it's optional, property damage coverage is worth it because it helps protect your finances. If you need coverage, Experian's free auto insurance quote tool can help you compare rates from a number of top insurers at the same time to find the best deal for your needs.