What is property damage coverage?

If you are found at fault in an accident and have caused damage to someone’s property, property damage liability insurance (also known as property damage coverage) may pay for the cost of repairs to the property.

People may mistakenly think that property damage insurance provides coverage for damages to their own car; however, this is not the case. You would be using your collision coverage instead.

What does property damage insurance cover?

You might use this coverage if you do one of the following:

  • Lose control and run into a neighbor's house
  • Hit a parked vehicle
  • Slide on the ice and hit your neighbor's mailbox

How much property damage insurance do I need?

According to the Insurance Information Institute, the severity of accidents rose from 2014 - 2015 as well as the costs of materials and labor. This has all led to an increase in property damage costs per accident. You should think about this when you are setting your limits for property damage coverage.

In some states, you are required to purchase a minimum amount of property damage liability coverage (but the standard limit is $100,000). Ask your client service representative what is required in your state.