What You Need to Know About Property Damage Liability Insurance

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.

What Are the State Minimum Liability Limits?

What Are the State Minimum Liability Limits?Every state in the U.S. imposes minimum liability insurance requirements on its drivers. Although the amounts vary from state to state, they all serve the same intended purpose: To financially protect other drivers against bodily injury and property damage incurred in an accident for which they are not at fault.

The minimum amount of auto insurance you must personally carry depends solely on the state in which you live and drive. For example, New Jersey, California, Delaware, Pennsylvania and Massachusetts all have very low property damage liability limits. In those states, you only need $5,000 of coverage for the damage you cause to another person’s vehicle or property. Many other states, however, such as Mississippi, Alaska and Maine, require a minimum of $25,000 of liability coverage for property damage.

State minimum bodily injury limits are typically higher and divided into two categories – the amount an insurer will pay for one person injured in an accident and the total amount an insurer will pay for all people injured in an accident. If you are in Oklahoma, Florida or Louisiana, you are only required to carry $10,000 per person, per wreck with a maximum of $20,000 per accident. Alaska residents, on the other hand, are on the hook for a bare minimum of $50,000 per person with a maximum of $100,000 per accident.

Driving Without State Minimum Coverage

If you choose to drive uninsured or underinsured, you could be facing serious consequences. The laws vary by state, but in some places, you could lose your license for as much as a year or have your vehicle impounded for driving without state minimum coverage. That is in addition to the fines, penalties and court fees you are almost certain to have to pay. Additionally, the offense could go on your permanent driving record for potential employers to see.

Considerations

Keep in mind that just because you have met your state’s minimum liability limits, it doesn’t necessarily mean you have enough auto liability insurance. Some states have notoriously low minimum insurance limits that wouldn’t even pay for half of the damage to a new vehicle. Others may have adequate liability limits for the average driver, but not enough to protect the assets of someone with a lot of savings, investments or property to lose.

You should speak with your insurance agent to determine how much coverage you personally need in the event of an accident. Remember, just because you max out your auto insurance benefits, it doesn’t mean you are not still liable for the damages or losses you cause another driver or passenger.

Liability Insurance of Pennsylvania – Bodily Injury and Property Damage

Liability Insurance of Pennsylvania – Bodily Injury and Property DamageLiability provides protection to you or anyone driving your car with your concern. When any claim is made against you by a third person labeling you to be responsible for the accident caused, this coverage will make payments to him on your behalf, if found that your vehicle is involved and resulted in injury or damaged any of the property of the third person. In addition, it will also provide legal support and will defend you when a law suit is filed. Hence do not reduce limits on your liability coverage.

Minimum limits mandated on bodily injury liability coverage for third-party by Pennsylvania’s Vehicle and Traffic Law are:

  • bodily injury of $15,000 for each person or $30,000 for causing death due to any injuries, sustained in an accident by one person
  • bodily injury of $30,000 for two or more in one accident or $60,000 resulting in death of two or more persons due to injuries from one accident.

State law also requires a minimum of $5,000 for any damage caused to vehicle or it’s parts or any damage to the property during an accident. Thus the minimum liability limits in Pennsylvania is referred to “15/30/5” or “$15,000/$30,000/$5,000”.

For any bodily injury or property damage caused during an accident, if it is due to other driver’s negligence then you can claim under the other driver’s car insurance policy, where the automobile insurance policy provides coverage for each person involved in the accident and hence a liability coverage. However, when an injured person in your vehicle is your spouse unlike the purchase made, you need to opt for Supplemental Spousal Liability Insurance. Remember, your wife is still eligible for No-Fault as discussed above. Hence, it becomes necessary to check with your insurer or the insurance agent much before buying a car insurance policy.

Shedding Light on Texas Car Insurance Requirements

Insight on Insurance RequirementsMany Texas residents may be confused as to exactly how much car insurance they must have. Some may believe that full coverage is necessary, no matter what the circumstances, while others are aware that there is a “state minimum,” but they are concerned as to whether or not they qualify for just the “state minimum” or if they need full coverage.

Texas Car Insurance Requirements

The only Texas car insurance requirements necessary for you to meet “state minimum” requirements is what is commonly as “liability only” insurance. Simply put, this means that you take out only enough insurance to pay for repair or replacement of another person’s car if you are at fault. (Texas is not a no-fault state; in most instances, fault will be placed—usually by law enforcement officials—on one of the drivers involved).

Liability Insurance & Medical Expenses

Additionally, liability insurance covers any medical expenses of the other party involved should there be any. Liabilities only insurance does not cover repairs to or replacement of your car, nor does it cover medical expenses if you are injured.
If your car is paid for and is an older model, and if you are not required by your employer to carry full-coverage auto insurance, you can opt for liability-only insurance coverage. The dollar amounts required for bodily injury liability are $25,000/$50,000; for property damage liability it is $25,000.

The first thing you need to do is find out for sure if you are required to have full coverage. If you aren’t, and you want to go with just “state minimum” coverage, compare rate quotes between different insurance companies to find the best price.