In most states, if you own a car, you are required to carry certain types of insurance. One of those types of insurance is property damage liability coverage.

1. What It Covers

Property damage liability is designed to cover you if you get into an accident and damage someone else's property. It could be their vehicle, or it could include physical property you damage, such as driving your car through someone's fence. Property damage liability coverage is about protecting you against property you could be liable to replace or repair should you damage it.

2. Two Varieties of Coverage

With property damage liability cover, there are generally two different types of coverage options — combine single limit and split limit.

With a single limit, you will have a single limit of coverage for both property damage liability and bodily damage. The limit can be applied to whatever proportion is necessary for property and bodily damage. For example, if you have a $100,000 limit, that is how much your insurance will cover for property and bodily damage combined for an accident.

With a split limit policy, the amount of coverage for each liability type is set beforehand. So, you may have a limit of $25,000 for bodily damage and $20,000 for property damage, and if you reach the limit of one type of coverage, that is it.

3. The Amount of Coverage You Need

Many states require you to carry a minimum coverage amount of property damage liability coverage; the exact amount that you are required to carry will vary based on the state you live in. Your insurance agent can let you know what the minimum is for the state you live in.

It is important to remember that the state minimum is just that, a minimum. In general, the minimum is not enough to cover the property damage costs if you were to get into an accident with a newer car. If your property damage liability coverage is not high enough to cover the damage you cause to another vehicle, the other party can sue you for the difference between the value of their vehicle and what your insurance will cover.

That is why it is often a good idea to carry above the minimum required by your state so that if you get into an accident, you don't put yourself at risk of being sued and losing your other assets and savings.

4. What Impacts the Cost of Coverage

The exact cost you are charged for property damage liability coverage is usually based on your driving history and the state that you live in. For example, if you have recently been involved in accidents, then the risk of you damaging someone's property in an accident is higher, and you will find that you are charged more for the property damage liability portion of your coverage.

Property damage liability is one form of liability insurance you are required to carry as a vehicle owner in most states. With your property damage liability, make sure your limits are high enough to cover you if you get into a serious accident, as you don't want to end up being personally responsible for the damage.

For more information on this type of auto insurance policy, contact a local insurance provider.