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Liability vs Property Damage Coverage in California Auto Insurance
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Buying car insurance in California means getting familiar with liability and property damage coverage. Both play important yet distinct roles in protecting drivers on the road. This guide examines how liability and property damage work, California legal requirements, and tips for getting the right coverages.
Overview of Liability Coverage in California
Liability insurance covers bodily injury and property damage that you cause to others when an accident is your fault. California requires all drivers to carry this coverage.
What Liability Coverage Pays For
If an at-fault accident injures others, liability insurance helps pay for:
- Medical bills
- Lost wages
- Pain and suffering
- Wrongful death damages
If you damage another vehicle or property, liability coverage pays for repairs or replacement costs.
Liability insurance protects your assets if you get sued. Settlements and lawsuit judgments can easily exceed hundreds of thousands of dollars.
California Minimum Liability Limits
California requires these minimum auto liability limits:
- $15,000 bodily injury per person
- $30,000 bodily injury per accident
- $5,000 property damage
However, these limits may not be enough. Many experts recommend 100/300/100 limits or higher.
When Liability Coverage Applies
Liability insurance only covers damages when the policyholder is legally responsible. It does not pay anything if an accident is not your fault.
Overview of Property Damage Coverage
Property damages coverage pays to repair or replace another person’s property that you damaged in an accident, regardless of fault.
What it Covers
Typical losses covered include:
- A fence or mailbox you hit while parking
- A ball cracks a neighbor’s window
- Windshield damage from debris flying off your car
Property damages coverage simplifies minor accidents by paying small claims directly rather than going through liability questions.
California Requirements
California does not require drivers to carry property damages coverage, but it’s inexpensive and recommended. Typical limits range from $5,000 to $10,000.
When it Applies
Property damage coverage pays any time you damage someone else’s property, even if the accident was not your fault. There is no need to prove negligence.
Key Differences Summarized
- Liability coverage pays claims when you are legally liable; property damage coverage pays regardless of fault.
- Liability covers bodily injury and property damage; property damage only covers damage to property.
- Liability limits are higher because claims can be extremely expensive.
Scenarios Illustrating the Difference
You crash into a brand new Porsche: Your liability coverage will pay for the repair or value of the Porsche if you are at fault.
A stone from your lawn mower hits a neighbor’s house: Your property damage coverage will pay to repaint the chipped area, even though you weren’t negligent.
Your son dings another car while parking at school: Property damage coverage will pay for the repair without needing to determine fault.
Tips for California Drivers
- Review liability limits and consider increasing them if they seem too low.
- Add property damage coverage for minor accidents where fault doesn’t matter.
- Carry proof of insurance in your car at all times.
- Understand exclusions that may apply to certain drivers or situations.
- Consider getting an umbrella liability policy for extra protection.
- Maintain a good driving record to keep insurance affordable.
Frequently Asked Questions
How much liability insurance do I need?
Experts recommend at least 100/300/100 limits, which is higher than California minimums. Pay attention to the per-person limits.
What happens if I cause an accident with damages exceeding my liability limits?
You would be personally responsible for paying any amount over your policy limits. Having higher limits reduces this risk.
Can I save money by skipping property damage coverage?
Probably not. This coverage is quite affordable, often just a few dollars per month. It offers valuable protection.
Does property damage coverage raise my rates after a claim?
Not necessarily. Accidents where you are not at fault should not impact your premiums.
What if someone sues me after an accident?
Notify your insurer immediately. They will provide legal representation and defense based on your liability coverage.
What is an umbrella liability policy?
An umbrella policy provides additional liability coverage that kicks in after you auto and home policy limits are exhausted. These policies start at $1 million.
Did You Know?
- The average auto liability claim in the U.S. is over $15,000.
- 28% of all liability claims in California are for over $50,000.
- Uninsured motorist coverage protects you if an at-fault driver has no insurance.
- DUI accidents can exceed your liability limits and lead to lawsuits.