Property damage liability coverage pays for the damage your car causes to someone else's property, most often another vehicle, but also structures like a fence, building, or lamppost. It is a mandatory component of car insurance in nearly every state. If you are at fault in an accident, this coverage steps in to pay for repairing or replacing the other person's damaged property, protecting you from having to pay these costs out-of-pocket.
This coverage is distinct from collision coverage (which pays for damage to your own car) and comprehensive coverage (which covers your car for non-collision events like theft or hail). Property damage liability is purely for the other party's losses. State laws set minimum required coverage amounts, such as $25,000 per accident, but these minimums are often insufficient to cover the total cost of serious accidents, making higher limits a wise financial decision.
| State | Minimum Required Property Damage Liability Coverage |
|---|
| California | $5,000 |
| Texas | $25,000 |
| Florida | $10,000 |
| New York | $10,000 |
| Pennsylvania | $5,000 |
| Illinois | $20,000 |
| Ohio | $25,000 |
| Michigan | $10,000 |
| Georgia | $25,000 |
| Arizona | $15,000 |
A typical policy might list coverage as "100/300/50," where the last number represents $50,000 of property damage liability. If you cause an accident that totals a new SUV and damages a storefront, your insurance would cover those costs up to your policy's limit. Any expenses beyond your limit would become your personal financial responsibility, which is why selecting a limit of $100,000 or more is commonly recommended.
