Car Insurance Term: Property Damage Liability

The term property damage liability refers to auto insurance for any and all damages you may be responsible for in regards to another automobile or private possession. Property damage liability coverage is required in all states (with one exception), and the minimum required amounts of coverage will vary from state to state.

When you get auto insurance for yourself and your car, one aspect of the entire package will be property damage liability coverage. The idea behind property damage liability is that if you are driving and cause an accident with another person or persons, you will be responsible for damages done to their property.

Again, property damage liability only pertains to accidents which you caused, no matter how accidental. So if you are driving along and are momentarily distracted by something and hit another car, you are responsible for the accident. You will be responsible for damages, hence the idea behind auto insurance itself. If your insurance has property damage liability up to, say, $50,000, and the damage to the other driver’s car is estimated at $10,000, your insurance will pay for those repairs once you have paid your deductible. Referring to the picture below – if, however, you have a minimal insurance policy and your property damage liability coverage is $10,000, and the damage you’ve done to the other driver’s car totals $20,000, then you will be required to pay the $10,000 difference. That’s why it pays to have a higher property damage liability limit for your car insurance.


If you have more questions about property damage liability or any other aspect of automobile insurance, be sure to call or sit down with an automobile insurance expert. He or she will answer any and all questions about car insurance, and help you determine the policy that’s right for you.

Here are other important auto insurance terms you should know:

  1. Personal Injury Protection
  2. Bodily Injury Liability
  3. Comprehensive Auto Insurance