What Is Property Damage Liability?

Property damage liability insurance is a part of your car insurance coverage that pays for damage to another person's property when you cause an accident. It covers costs like repairing or replacing a vehicle, fence, or other property. Almost every state requires drivers to carry it, but limits vary. In this article, we’ll explain what property damage liability covers, what it doesn’t, how much you need, state minimums, costs, and why having sufficient coverage really matters.

What Does Property Damage (PD) Liability Insurance Cover?

Property damage coverage steps in when you cause a car accident that results in damage to another person’s property. It helps cover the costs of repairing or replacing what was damaged, so you don’t have to pay everything out of pocket. This type of liability insurance doesn’t just apply to vehicles. It can extend to different types of property you might damage in an accident. 

Here's what property damage liability insurance usually covers: 

• Repairing or replacing another driver’s vehicle after a crash. 
• Damage to buildings, fences, or mailboxes caused during an accident. 
• Public property such as lamp posts, road signs, and guardrails. 
• Legal defense fees if the property owner files a claim or sues you. 
• Certain court costs related to the accident.

Looking for a reliable insurance carrier that offers affordable auto insurance quotes? Reach out to USA Auto today. We’re committed to serving both high-risk and standard drivers in Michigan and beyond with budget-friendly auto insurance solutions. Contact us online or simply call (866) 855-1872.

What Does Property Damage Liability Not Cover for You? 

Property damage liability doesn’t cover everything related to accidents. Here’s what it doesn’t cover for you: 

• Repairs to your own vehicle (you’d need collision coverage for that). 
• Medical bills, lost wages, or any personal injury expenses (covered under liability or personal injury protection). 
• Damage to items inside your car, like a laptop, phones, or personal belongings. 
• Accident involving uninsured drivers unless you carry uninsured motorist coverage. 
• Routine wear and tear, mechanical breakdowns, or maintenance issues.

Practical Example of Property Damage Liability in Action 

Let’s say you’re driving through Detroit on a rainy evening and slide through a stop sign. You hit another vehicle and also damage a nearby fence. The other driver’s SUV repair bill comes to $18,000, and the fence owner requests $4,000 for replacement. That’s a total of $22,000 in property damage.

If your auto policy in Michigan carries the state’s minimum property damage liability coverage of $10,000, your insurance company would only pay up to that limit. In that case, you will have to pay the remaining $12,000 out of pocket. This is why we recommend choosing higher coverage limits than the minimum.

How Much Property Damage Liability Coverage Do You Need?

Well, most of the time, it’s best to carry more than the minimum amount of property damage liability your state requires. Minimums are often too low to handle real-world accident costs. In many instances, we’ve seen that repairing a newer vehicle can easily exceed $20,000, and hitting both a car and a structure in the same accident can push damages even higher.

So most experts actually suggest carrying at least $50,000 to $100,000 in property damage liability insurance. However, the right number always depends on your financial situation, the asset you want to protect, and your comfort with risk.

Is Property Damage Liability Insurance Required in Every State?

Yes, almost every state requires drivers to carry property damage liability coverage (PDL) as part of their auto insurance. The only exception is New Hampshire, which requires proof of financial responsibility if you don’t carry any insurance. Anyway, whether your state requires it or not, the standard path is having liability coverage in your auto policy. Because if you cause an accident without it, you risk fines, license suspensions, and even lawsuits. 

Minimum Property Damage Coverage Limits Required by State

Each state sets its own minimum. Some states require as little as $5,000, and others set higher thresholds since modern repair costs are steep. The following table illustrates the minimum property damage liability (PDL) coverage requirement for all 50 states:

State	PDL Minimum Limit Per Accident
Alabama	$25,000
Alaska	$25,000
Arizona	$15,000
Arkansas	$25,000
California	$15,000 (effective on Jan 1, 2025)
Colorado	$15,000
Connecticut	$25,000
Delaware	$10,000
District of Columbia	$10,000
Florida	$10,000
Georgia	$25,000
Hawaii	$10,000
Idaho	$15,000
Illinois	$20,000
Indiana	$25,000
Iowa	$15,000
Kansas	$25,000
Kentucky	$25,000
Louisiana	$25,000
Maine	$25,000
Maryland	$15,000
Massachusetts	$30,000 (Effective on July 1, 2025)
Michigan	$10,000
Minnesota	$10,000
Mississippi	$25,000
Missouri	$25,000
Montana	$20,000
Nebraska	$25,000
Nevada	$20,000
New Hampshire	$25,000 *(Not Mandatory)
New Jersey	$25,000
New Mexico	$10,000
New York	$10,000
North Carolina	$50,000 (As of July 1, 2025)
North Dakota	$25,000
Ohio	$25,000
Oklahoma	$25,000
Oregon	$20,000
Pennsylvania	$5,000
Rhode Island	$25,000
South Carolina	$25,000
South Dakota	$25,000
Tennessee	$25,000
Texas	$25,000
Utah	$25,000 (As of Jan 1, 2025)
Vermont	$10,000
Virginia	$25,000 (As of Jan 1, 2025)
Washington	$10,000
West Virginia	$25,000
Wisconsin	$10,000
Wyoming	$20,000

Please note that all data was updated as of October 6, 2025. State laws are subject to change at any time, and we will update this information accordingly.

Understanding and Choosing Your PDL Limits

We hope you already know how to read your liability coverage limits, including PDL. Still, if you’re confused, let us help you. So, when you look at your auto insurance coverage, you’ll usually see numbers listed such as 100/300/50. The last number 50 in this case represents your property damage liability coverage in thousands. This means $50,000 per accident to pay for damage to another person’s property.  

Now, to choose the right PDL limit, you need to ask yourself, “Could I afford to pay out of pocket if I cause a costly crash?” If the answer is no, then consider buying more than the minimum coverage. Many drivers go for at least $50,000 or $100,000 to avoid financial fallout. However, if you want extra protection, you can always add an umbrella insurance policy, which helps you cover the remaining amounts that your standard auto insurance doesn’t cover. 

What If the Cost of Property Damage Goes Beyond My Coverage Limits?

So as we said, your property damage liability insurance only pays up to the amount listed in your auto policy. If the total damage to another person’s property is higher, your insurance company stops paying once your limit is reached. And anything beyond falls under your personal responsibility. 

Let’s say you live in Virginia and your property damage liability coverage is $25,000, but the car accident you cause results in $60,000 property damage. Your insurer would cover $25K and you’d owe the remaining $35K out of pocket. 

There are a few ways to avoid this. First, you should choose higher PDL limits so that you don’t have to face this sort of financial catastrophe in the first place. Second, even if you choose the minimum limits, you must have the financial ability/savings to pay for the damage. Lastly, the best option is to buy an umbrella insurance policy. An umbrella plan provides additional protection once your auto insurance coverage hits its limits.

How Much Does Property Damage Liability Insurance Cost?

The exact cost depends on several factors. According to ValuePenguin, drivers pay around $23 per month for $25,000 coverage limits. However, since Property Damage Liability (PDL) is only one component of liability auto insurance, insurers typically charge a total premium without itemizing the costs for Bodily Injury (BI) or Property Damage (PD) separately. The national average cost for minimum car insurance in the United States is $68 per month, so you can expect to pay around this amount or more when purchasing liability coverage (BI and PD). 

Before accepting this price as a given, keep in mind that the following factors can dramatically impact your overall liability car insurance cost: 

• Claim history 
• Driving history 
• Credit score 
• Vehicle type (make and model) 
• Chosen insurance company 
• Chosen coverage limits

How Do I File a Property Damage Claim? 

Filing a property damage liability claim is pretty straightforward if you have the right documentation. So, here’s how to do it. First, start by reporting the car accident to your insurance company as soon as possible. Share all the details where it happened, who was involved, and any photos or videos of the damage. It’s also best if you provide any witness details. Once you’re done, the insurer will assign a claim adjuster to review what happened and estimate repair costs for the else’s property.

Cooperate fully with the investigation, stay honest about the facts, and keep records of all communication. If the other driver files a claim against you, your insurer will handle payments up to your coverage limit and even help with legal defense (if needed). 

Is Property Damage Liability Insurance Worth It? 

Certainly. Since most states require property damage liability insurance, it’s not just worth it. It’s the law. And beyond that, it protects you from huge financial losses if you cause damage to another person’s vehicle or property. Besides, having adequate liability coverage for property damage shows you’re a responsible driver and citizen who values safety and accountability.

Property Damage Liability Insurance FAQs

Is property damage liability insurance required?

Yes. Almost every state (except New Hampshire) requires drivers to carry property damage liability coverage as part of their auto insurance. If you don’t carry it, you’re likely to face fines, license suspensions, or legal disputes after a car accident.

Is property damage the same as collision? 

No. Property damage liability covers damage to another person’s property when you’re at fault. On the flip side, collision insurance pays to repair or replace your own vehicle after an accident.  What is the most common property damage liability coverage?  

Well, there’s no common coverage limit since every state sets its own limit when it comes to property damage liability. You can customize your limit if you need to choose higher limits.

What is the most common property damage liability coverage?

Well, there’s no common coverage limit since every state sets its own limit when it comes to property damage liability. You can customize your limit if you need to choose higher limits.