Liability insurance for property damage is a mandatory policy for auto owners in most states. While it can refer to other items, such as a building, it is most often used to refer to a primary part of an auto insurance policy. Note that many states require at least $5,000 of property damage liability insurance.
This type of insurance should not be overlooked, however. It is a good idea to obtain a sizable amount of insurance. For instance, if you were to get into a serious accident, the minimum would not likely cover the potential costs that you would face. As a result, you could face litigation that would entail out-of-pocket expenses. These figures can be quite large.
Liability insurance for property damage can be purchased either as a single limit or split limit policy:
- Single limit policy allows you to use the entire amount purchased for bodily injury and property damage liability. The amount can be divided in any combination, making it a more versatile option.
- Split limit policy involves three numbers, with the third being the amount for property damage liability for each accident. The latter number refers to your property damage liability – the other two numbers refer to bodily injury per person and the amount per accident.
As you can imagine the potential scenarios can be quite costly. For instance, if you swerve and cause damage to an expensive parked car, this is where your property damage liability insurance would come into play. Many experts purchasing at least $50,000 in insurance for every vehicle, at a minimum. A higher amount is often recommended, due to the potential costs that could face an owner.
It is a good idea to go over liability insurance for property damage with your insurance agent. The agent will be able to describe how it plays a role in your overall auto insurance policy, along with any questions that you may have.
Liability for property damage is a core area of any auto policy. Discuss it with your agent to find out what policy limits are appropriate for your insurance needs and budget.