Property Damage Liability

Property damage liability coverage pays for damage you cause to another person's property while operating a vehicle. Most commonly, this means damage to other drivers' vehicles in an accident where you are at fault. It also covers damage to other types of property you may strike: a fence, a mailbox, a storefront, a utility pole, or landscaping. Property damage liability is legally required in every state, though the minimum limits vary widely and are often inadequate relative to today's vehicle values.

On a standard personal auto policy, property damage liability is the third number in the split-limit structure. In a 100/300/100 policy, the final $100,000 is the property damage per-accident limit. For reference, the average transaction price for a new vehicle in the US has exceeded $45,000 in recent years, and trucks, SUVs, and luxury models regularly exceed $60,000 to $90,000. Causing a total loss to a single newer vehicle at a state minimum property damage limit of $25,000 leaves you personally responsible for the gap -- potentially $35,000 to $65,000 out of your own assets on a single collision.

The incremental cost to increase property damage coverage from $25,000 to $100,000 is typically $40 to $80 per year on most personal auto policies. This is one of the most cost-effective adjustments you can make to your auto coverage. A single at-fault accident involving a high-value vehicle, a commercial vehicle, or a situation where you damage multiple vehicles or property types can expose you to losses that dwarf the lifetime cost of the additional premium. Review your property damage limit alongside your bodily injury limits at your next auto renewal.