Class is in session. 

You’re pulling out of a parking spot at the grocery store and accidentally ding someone’s bumper. Who pays for this? 

The answer can be found in your property damage liability policy. 

Required by law in most states, property damage liability can help soften your financial impact if you’re at fault for an accident that damages another person’s vehicle or property. It will typically cover the cost of repairs or the replacement, up to the limit in your policy. 

Property damage to another person’s car, home, place of business, and even public or government property are usually covered.  

However, property damage does not cover damages inflicted to your own vehicle and so it is good to consider other coverage options, such as collision coverage. 

Property damage covers two main types of damages you cause: 

Another person's vehicle:

• You accidentally dented someone’s car while trying to squeeze into a small parking space 

• You caused a collision that totaled two driver’s vehicles  

Property damage liability can pay for vehicle damage, including repairs or replacing someone’s vehicle if it’s considered a total loss… but remember, your coverage is only up to the limits of your policy. 

Another person's property:

• A deer leapt in front of you and you swerved to avoid her, smashing into someone’s fence 

• You accidentally crashed into your neighbor’s tree and lamppost 

• You damaged the parking structure after you put the car in “drive” instead of “reverse” 

• You rear-end someone’s car while in traffic 

Property damage liability can pay for vehicle damage to other people’s property, including repairs or replacing someone’s vehicle if it’s considered a total loss… but remember, your coverage is only up to the limits of your policy. And liability coverage will not pay costs for damages to your own property. 

• When the cost of damages exceeds the amount of your coverage, you’ll be responsible for paying the difference (this is true of all types of insurance) 

• You hit a deer and cause damage to your own car (this is comprehensive coverage) 

• A driver gets injured from an accident you caused and now needs rehabilitative therapy (this falls under bodily injury liability) 

• You get injured in an accident you cause (this may fall under PIP) 

Property damage liability can pay for rehabilitation and other medical expenses to drivers that were impacted in an accident where the policyholder was at fault… but remember, your coverage is only up to the limits of your policy. And liability coverage will not pay medical expenses for self-sustained injuries and trauma. 

Yes, as with all insurance, there are pretty standard exceptions throughout the industry. One example is that no policy will protect you for damage intentionally inflicted.  

You may accidentally hit a neighbor’s mailbox… but you cannot maliciously do so.  

Always read your policy for a comprehensive understanding of the coverage you select. 

Like all insurance coverage, if you select a higher limit, you’ll be covered for a higher amount if you’re in an accident. But this will also mean your insurance rate will be higher as well. 

One way to bring insurance costs down is to select an insurer with great rates. Enroll in Novo Drive which can bring rates down even further for safe drivers.  

Check your state’s requirements, as driving without liability coverage is illegal in most states… penalties include high fees, loss of a license, and even jail time. 

Insurance is there to protect your own financial liability when you get into a car accident, but it is also a way of other drivers on the road knowing they are protected if someone hits them. 

These two coverages often get grouped together in the umbrella term of “liability insurance.” 

Instead of being done to confuse policyholders, the term is meant to streamline things as liability insurance protects drivers from liability for accidents that they caused. Thus, liability insurance helps pay for damages the at-fault driver has caused. 

Simply put, bodily injury coverage is about the body while property damage is about issues that arise from property. 

So while bodily injury coverage can assist in paying off medical expenses if you hurt someone in an accident, property damage can cover damages to another person’s property. 

Liability insurance never covers your own injuries or any damages to your own vehicle. When you’re at fault, these are usually covered by personal injury protection (PIP), collision, and comprehensive coverage… which you can also purchase for added financial protection. When the other driver is at fault, damages may be covered by their insurance or possibly from your own policy… if you’ve elected to purchase underinsured motorist bodily injury coverage or uninsured motorist damage coverage.  

Officially, this will depend upon where you live and the laws that have been designated in your state. Typically, most states require you to carry both of these coverages. 

If it is not mandated, then purchasing it will be up to you. 

You will also need to decide if you want to raise your minimums beyond what your states requires. 

Repairs can be costly, even when the property is not a total loss. The average car costs $48,000. And an accident can involve more than one other car, as well as other types of property.  

The more informed you are, the more likely you will select the right insurance policies that fit your needs. Check out more posts on car insurance:  

• Comprehensive Insurance: What is Covered & Why Consider Protection

• Does Car Insurance Cover Vandalism? 

• Current State of the Personal Auto Insurance Market