Property damage liability is a component of auto insurance. Most drivers should have this type of insurance in place. It may be a legal responsibility you have within your state. It’s important to understand when this coverage applies as well as how much you should maintain. Take a closer look at how property damage liability car insurance works. Is it right for you?
How Does Property Damage Liability Work?
If you have a wreck, and you cause that accident, you may be responsible for the financial losses you create. After all, it was your fault, and most authorities will label you as at-fault.
When you cause damage to another person’s property, property liability insurance applies. It helps cover the costs of the damage you cause to another party’s belongings. For example, your coverage will help that person pay for their vehicle repairs. Because you are responsible for the losses, if you did not have this coverage, you would have to pay the bill out of your pocket.
What Type of Property Does It Cover?
Property damage car insurance covers most types of property. When your vehicle causes damage to another party’s belongings of any type, this policy may apply. It can usually include:
- Damage to another person’s vehicle
- Damage to the other party’s belongings within the vehicle
- Damage to a person’s real estate or things like fences, mailboxes, and homes
This type of car insurance never covers your vehicle. It is only capable of providing financial coverage to another party’s belongings.
How Much Coverage Do You Need?
The amount of property damage insurance you need depends on several things.
First, your state may provide a specific minimum level of coverage. It is typically at least $15,000 but can be up to $30,000. This is the legal minimum. It virtually never represents how much you should have, though.
More commonly, drivers should have significantly higher amounts. This coverage can help cut your losses in accidents where another vehicle is a total loss. The costs here can usually exceed $30,000 easily. Most drivers should work with their insurance agent to determine how much coverage is right for them.
It is important to meet at least the minimum required property damage liability insurance set by your state. This provides a base level of coverage. It also makes it legal for you to operate your vehicle in that state. Furthermore, discuss other car insurance needs with your agent.
Also Read: What Is Uninsured Motorist Coverage?
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