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What Does Property Damage Liability Cover?

April 21st, 2023 | 4 min. read

By Daniel J. Middleton

It’s a beautiful spring day in Clay, New York. Dave is behind the wheel, cruising toward Dick’s Sporting Goods to buy new kayaking gear. As he approaches a busy intersection, his phone suddenly rings, pulling his attention away from the road for a split second.

That’s when it happens. Before Dave knows it, he is inadvertently colliding with a gleaming BMW making a turn across his lane. Dave is shaken but uninjured. He looks left and immediately sees the damage the BMW took.

But he isn’t worried. This is precisely where property damage liability (or PD) comes to the rescue.

If you’re a driver in Central New York, you know that you need car insurance to protect yourself and others on the road. But do you know what property damage liability is and why it’s important?

If you’ve ever wondered what property damage liability covers or how much coverage you should have for your auto insurance, you’ve come to the right place.

We’ve written hundreds of auto policies for Central New Yorkers over the years, all of which had property damage liability built in.

While New York State requires a minimum amount of PD coverage, we advise you to choose a higher limit for more financial protection.

In this article, we will explain what property damage liability covers, how it works, and how much of it you need to have adequate protection for any given mishap on the road.

What is Property Damage Liability?

Property damage liability is a type of insurance that covers damage to another person’s property or vehicle when you’re at fault in an accident. It also covers public property and debris removal.

Some examples include:

  • You accidentally knock down your neighbor’s mailbox.
  • Your vehicle collides with another car while reversing.
  • You avoid hitting a deer by swerving but end up crashing into a utility pole.
  • On a snowy day, you sideswipe a guardrail, causing damage.

Your PD coverage handles the costs of repairing or replacing these damaged properties up to your insurance policy’s limit.[image_with_animation image_url=”15403″ animation=”Fade In” hover_animation=”none” alignment=”” border_radius=”none” box_shadow=”none” image_loading=”default” max_width=”100%” max_width_mobile=”default”]

How Property Damage Liability Limits Work

In most states, including New York, there are minimum coverage requirements for property damage liability, as we noted above.

New York State presently mandates a minimum of $10,000 per accident. If the repair or replacement costs are below $10,000 for a single accident, your policy provides sufficient coverage.

But if the cost of damages exceeds $10,000 and the accident is your fault, you could face significant financial challenges. When the expenses surpass your insurance policy’s coverage, you may be legally responsible for covering the remaining amount, which could result in a lawsuit against you.

For instance,

  1. Suppose Vehicle A ignores a stop sign and crashes into Vehicle B, which is a new car worth $30,000.
  2. Vehicle A only has the minimum coverage of $10,000 for property damage.
  3. The owner of Vehicle B can sue the owner or driver of Vehicle A for the remaining $20,000 (plus legal fees).
  4. This means the owner of Vehicle A will have to pay $20,000 from their own pocket or face a court order that may garnish their wages.

For this reason, we strongly advise you to get significantly more property damage liability coverage than the state minimum. We believe everyone should have more than the bare minimum in terms of PD.

How Much Property Damage Liability Should I Have?

For those of you posing this question, it’s not an easy one to answer in this article because every household has different financial and family situations. However, you may be surprised to learn that increasing your coverage doesn’t cost much more.

At the very least, you should increase your limit from the $10,000 minimum to $50,000 in coverage. This is because the cost of repairing or replacing property can be very high, especially if you are involved in an accident with a newer or more expensive vehicle.

If you have assets, such as a house, savings, or investments, you may want to consider purchasing even more PD coverage. The increased limit will help protect you in the event of a large accident.

Here are some tips for determining how much property damage liability coverage you need:

  • Consider your financial situation. Do you have thousands of dollars in savings to cover the difference?
  • Talk to your insurance agent. Your insurance agent can help you determine how much property damage liability coverage you need. They can also help you find a policy that fits your budget.

It is important to note that PD is a type of car insurance that pays for the damage you cause to other people’s property in an accident. It does not cover your car’s damage. You need another type of insurance to protect your vehicle.

This type of insurance is optional in New York State, unlike PD. You can read more about the insurance that covers your vehicle in our Comp vs. Collision article.

Obtain the Amount of PD Coverage That’s Right for You

PD coverage is a vital part of auto insurance that can save you from paying out of pocket for the damage you cause to other people’s property in an accident.

In New York State, you are required to have at least $10,000 of PD coverage, but, as we’ve shown, this may not be enough to cover the full cost of the damage in some cases.

To safeguard your current assets or income, you may want to increase your PD coverage to protect yourself from lawsuits and financial losses.

Our agency can help you find the best PD coverage for your needs and budget. We have years of experience and knowledge in auto insurance and PD coverage, and we can guide you through the process of getting the right policy for you.

We’ll do the heavy lifting, so you don’t have to.

To get things started, click the Get a Quote button below and let us help you get the peace of mind that comes with adequate PD coverage.

Or, if you’d rather dive deeper into the world of auto insurance, learn about bodily injury coverage.

Daniel J. Middleton

Daniel is an accomplished content creator. He has been working in publishing for almost two decades. Horan Companies hired Daniel as its content manager in November 2022. The agency entrusted its messaging to him. Since then, Daniel has written insurance articles, service and pillar pages, and more. All in an effort to educate CNY readers. He's helping them understand the world of insurance so they can make informed decisions.