Having the right insurance coverage is a responsibility all drivers should take seriously. When you’re on the road, anything can happen. This includes accidents that either you or another driver cause. Regardless of who’s at fault, an auto accident can be expensive without the proper coverage. Let’s discuss what property damage liability insurance is and how much it costs, so you can ensure you have the coverage you need if anything happens when you’re behind the wheel.

What Is Property Damage Liability Insurance?

Woman calls her insurance agency after a vehicle accident.
Image by Tumisu is licensed with Pixabay License

Property damage liability insurance coverage will pay for damages caused to another person’s property if it’s damaged in an accident where you’re at fault. Keep in mind that this specific coverage doesn’t cover costs for damage to your vehicle or your property. For example, if you were to lose control of your vehicle and crash through your neighbor’s fence, property damage liability insurance would pay to replace or repair the fence. However, you’ll need other coverage, such as collision, to cover the costs to repair your own vehicle.

Almost every state requires drivers to have some amount of property damage liability coverage as part of their insurance policy. Some of the other types of property damage this insurance can pay for include:

  • Another driver’s vehicle.
  • Buildings, like houses or stores.
  • Power poles.
  • Mailboxes.
  • Fire hydrants.
  • Trees or landscaping.

How Much Does Property Damage Liability Insurance Cost?

Because almost all states require you to have property damage liability insurance, driving without this coverage can cause a huge financial burden if you’re in an accident or caught driving without it in a state that mandates it. The cost of this coverage will vary based on factors like:

  • Your driving record.
  • Your age.
  • The vehicle you drive.
  • Your deductible.

This variation in pricing can make it challenging to know exactly how much this type of coverage will cost. Additionally, you can select different coverage amounts based on your needs, which ultimately affects how much you’ll pay each month for your insurance policy. However, there are typically minimum requirements for property damage liability insurance, depending on your state. For instance, New Jersey and California only require a minimum of $5,000 worth of property damage liability coverage, while Oklahoma requires a minimum of $25,000. Illinois requires property damage coverage of $15,000 per accident.

So, depending on the vehicle you drive and other factors listed above, this could break down to a monthly premium of around $71.40 per month for $50,000 worth of coverage. Of course, you can opt for more coverage, which often doesn’t raise your monthly premium as much as you’d think. Consult with an agent at American Auto Insurance to get a quote for the exact amount your property damage liability insurance will cost.

Who Needs Property Damage Liability Insurance?

All drivers need to have property damage liability insurance. This coverage protects others’ property that’s damaged as a result of an accident you cause. Without this coverage, you’ll be held responsible for paying the costs to repair any property, including the vehicle of another driver, damaged in an accident where you’re at fault. These costs can add up quickly, so it’s important to have the right coverage. Although almost every state has its own minimum requirements for this type of coverage, you need to be sure the amount of insurance you choose is enough to protect yourself financially.

While it may be tempting to opt for a higher deductible or less coverage to lower your monthly premium, you may have problems in the future if you can’t cover the cost of damages out of pocket. It’s important to understand that any amount over your coverage terms will have to be paid by you. An insurance policy will only pay the amount you choose on your policy.

This means that if you decide to go with a minimum of $10,000 for property damage insurance coverage and you get in an accident with a car worth $30,000, you’ll have to pay the additional $20,000 that the policy doesn’t cover. For most people, this can be a huge financial burden. So it may be a good idea to go with a higher coverage amount to ensure you aren’t left with a debt you can’t afford to pay after an accident.

Can Other Insurance Coverage Help With Property Damage?

In Illinois, your insurance policy must include property damage liability coverage. This is the only type of coverage that will help pay for the costs incurred from an accident you cause that damages someone else’s property. If you want to ensure your insurance policy covers your own property, you’ll need additional coverage.

Collision coverage will help pay for repairing your vehicle if it’s damaged in an accident that’s your fault. This type of coverage is optional if you own your vehicle, but if you’re leasing or have a loan, it’s likely that this coverage will be required. Despite the fact that collision coverage isn’t always a requirement, it’s good to have if you don’t want to pay out of pocket to repair your vehicle if you’re in an accident.

Another type of insurance that isn’t required but can help cover the cost of damages caused by forces out of your control is comprehensive coverage. With this type of insurance on your policy, damages that aren’t caused by a collision, such as weather or vandalism, are covered. This means that if a tree branch happens to go through your window, your insurance will cover the cost to replace it. Hail damage is another common occurrence that’s out of your control that’s also covered under comprehensive insurance.

Understanding the type of insurance you need to cover expenses if you’re in an accident can end up saving you a lot of money. If you’re still not sure what type of coverage you need or how much your policy should cover, don’t hesitate to reach out to the team at American Auto Insurance. Our agents are always happy to help explain everything you need to know about your car insurance policy, and we can give you a quote for the exact coverage you want and need.


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