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Car insurance is an important aspect of car ownership. In many states, a minimum level of car insurance is required by law. Limits are the maximum that your car insurance will pay for a covered claim, and you may want limits higher than the state minimum to protect you in case of an accident. Several types of car insurance coverage exist, and you should know what kinds of insurance you are required to carry and what types you want to add. Let’s look at property damage liability insurance and how much you need.

What Is Property Damage Liability Insurance Coverage?

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Property damage liability insurance pays for damages to someone else’s property, including their home or vehicle, that resulted from an accident where the policyholder was at fault. This insurance coverage does not cover damage to the policyholder’s property, which would cover collision or comprehensive coverage. Property damage liability insurance covers the following types of damage:

  • Damage to another person’s vehicle caused by the policyholder’s vehicle.
  • Damage to a stationary object or structure, such as fences, sheds, and houses, caused by the policyholder’s vehicle.

A property damage liability insurance covers damage to another person’s property and pays up to a maximum pre-established dollar amount as stated on your policy. Your insurance policy rate is determined by the amount of coverage you carry. If you carry more than the minimum amount required by law, your rates will be higher. However, you’ll be better protected financially in the event of an accident.

Liability insurance is typically offered in two ways: a combined single limit policy or a split limit policy. A combined single limit policy allows you to decide how to divide the total amount of coverage between bodily and property damage. A split limit policy lets the insurance company decide what percentage of the total coverage it will pay out under each liability category.

What Is the Minimum Property Damage Liability Insurance Amount for Illinois?

Illinois has a minimum coverage limit of $20,000 per accident. This means that you carry at least $20,000 in property damage liability insurance. The state also has a $25,000 minimum in bodily injury coverage per person and a $50,000 minimum in bodily injury coverage total per accident. In addition, Illinois requires you to carry a minimum of $25,000 per person and $50,000 per accident coverage on uninsured motorist coverage. Illinois also requires that you carry a minimum of $25,000 per person and $50,000 per accident coverage on uninsured motorist coverage.

A split limit policy is listed as 25,000/50,000/20,000 or 25/50/20. This example covers $25,000 per person in bodily injury coverage, $50,000 per accident in total bodily injury coverage, and $20,000 in property damage liability.

If you don’t carry the minimum requirements for coverage in Illinois, penalties include a fine between $500 and $1,000 for a first-time offender. Repeat offenders risk higher penalties. Your driver’s license will be suspended, and a $10  reinstatement fee will be required to get your license back. In Illinois, police can run your plates to complete an insurance inquiry instantaneously. You can’t show a fake insurance card or a card from a policy you no longer carry because they check the state database.

How Does Property Damage Liability Insurance Work?

If you’re involved in an accident with minor damage, and the total amount of property damage is less than the $20,000 coverage available, your insurance company will pay the full amount to repair the damage. For example, you hit your neighbor’s motorcycle causing $6,000 in damages. The entire $6,000 will be paid out by your insurance policy.

However, if you’re involved in a collision resulting in significant damage, you may be responsible for any damages over the $20,000 maximum limit on your policy. For example, you hit another car after missing a stop sign, and the amount of damage to their vehicle is $27,000. Your policy will pay out the $20,000, leaving you responsible for the remaining $7,000.

Why Should You Carry More Than the Minimum Coverage?

More and more vehicles these days are in the upper $20,000 and higher range. You may consider upping your property damage liability coverage enough so it can cover the replacement cost of a vehicle in full, leaving you off the hook. It doesn’t take long to reach that $20,000 limit, and anything over will be paid out of your pocket.

Contact your insurance agent to discuss the difference in rates for higher coverage. You’ll be surprised to learn that the difference between a $20,000 minimum coverage policy and a $100,000 coverage policy is typically less than $100 per year. Just one accident resulting in more than $20,000 in property damage makes it worth having a higher limit.

How Do You Make a Property Damage Liability Coverage Claim?

The policyholder will never make a property damage liability claim because the damage is to another person’s property. Typically, property damage claims are made as a third-party claim against the insurance policy of the person at fault. If the amount of damages exceeds the policyholder’s insurance coverage, the person making a claim can directly request this amount from the policyholder. If the policyholder refuses to pay, the claimer may sue them in civil court for the difference.

How Much Property Damage Liability Coverage Should You Carry?

The answer to this question varies depending on several factors. If you’re considering carrying more than the minimum amount required by Illinois law, it’s prudent to reach out to your insurance agent to discuss your options. The team at American Auto Insurance is here to make sure you get the coverage you need at a price you can afford. A knowledgeable agent would be happy to help you determine how much your insurance premium will be affected if you chose to carry more than the minimum. 

An American Auto Insurance agent would also be happy to discuss additional coverages with you, such as collision and comprehensive, and get you a free quote for coverage. You can reach us at 800-483-4868 or contact your local agent. With locations across Illinois, we’re sure there’s an American Auto Insurance near you.