Property damage liability coverage

Your car insurance will help you with costs if you’ve damaged other vehicles or property in a car accident.

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Car Crash Into Building

Liability coverage is one of the basic types of car insurance that’s required in many places across Canada. You’ll need liability property damage coverage to protect yourself from damage you cause in a car accident, otherwise known as costs you’re liable for.

What does liability property damage cover?

If you have property damage liability coverage, your insurer will help you pay costs that result from any damages you cause to someone else’s property. These costs may include:

  • Legal fees from property damage claims
  • Vehicle repairs
  • Repairs for damage to buildings, houses, fences, etc.
  • Lost income from business closures

Property damage liability doesn’t pay for your own car repair costs. For that, you’ll need collision coverage.

Guide to car insurance coverage

Does property damage come with a deductible?

Liability coverage usually doesn’t come with a deductible. So if you hit someone’s fence and your insurance covers the cost of repairs, you won’t have to pay out of your own pocket.

How property damage liability coverage works

When you buy liability coverage, you may be able to choose between a combined single limit or split limit policy.

Combined single limit

A combined single limit policy is written like this: “$300,000 each accident.”

This means you’re protected for $300,000 in the event of bodily injury and property damage costs. If you have to pay for damage to a fence as well as the medical costs of two people, then your policy will cover you. That is, as long as the cost falls within $300,000.

Split limit

A split limit policy for liability coverage might be written like this: 25/50/15.

These numbers are just shorthand for how much your insurance will cover you for:

  • The first number is the individual payment limit per accident for bodily injury. The “25” in our example refers to $25,000. It’s how much your insurance will cover for each person’s bodily injury costs (other than yours). For example, if you’ve injured someone in an accident and their medical bills are $20,000, you’re covered.
  • The second number is the overall payment limit per accident for bodily injury. The “50” refers to $50,000. It’s how much your insurance will cover for the total bodily injury costs in an accident (other than yours). For example, if you’ve injured five people and their medical bills are $20,000 each, the total cost would be $100,000. In this case, your policy would cover $50,000, and you’ll need to pay the other $50,000 yourself,
  • The third number is the overall payment limit per accident for property damage. The “15” refers to $15,000. It’s how much your insurance will cover for the total cost of property damage in an accident. (This doesn’t include your own vehicle — instead, you’ll need collision coverage for that.) For example, if you rammed into a barn and it costs $6,000 to repair it, your insurance will cover the expenses.

The three numbers will be different depending on your exact policy. Your province or territory will likely have policy minimums, but otherwise you’re free to choose the right mix for your own needs.

Property damage liability coverage in action

Let’s say that while you’re driving one day, you lose control of your car and crash into a parked vehicle. Fortunately, you didn’t hit anyone and you aren’t hurt. You do, however, need to pay the repair bill for the damaged vehicle, which comes in at just over $9,000. You have 100/300/50 in liability coverage, so the damage is easily covered by the $50,000 in property damage liability insurance.

Why should I buy property damage liability coverage?

Every province and territory will require you to have a specified amount of liability insurance, which likely includes property damage liability. Your province’s minimums are designed to cover the typical claim for property damage in your area. Costs can increase quickly in multicar accidents, so consider buying a higher amount of coverage.

How much does property damage liability coverage cost?

A liability-only policy is the cheapest type of car insurance you can buy. The average cost of liability car insurance runs around $207 per month, or $2,480 every year. In car insurance terms, a liability policy usually includes property damage liability insurance and bodily injury liability insurance. Keep in mind that the overall cost of liability coverage will vary depending on your age, where you live and your driving history, among other factors.

How do I buy property damage liability coverage?

It’s a standard insurance policy, so nearly all insurers offer property damage liability coverage. When you purchase car insurance online, typically your policy will include property damage at your provincial or territorial minimum levels by default. You can choose to raise your coverage maximums if you’d like extra protection.

Bottom line

In most parts of Canada, you’ll need some amount of property damage liability to drive a vehicle. Your state will likely set a minimum coverage amount, but you can buy more depending on what you feel comfortable with. Compare your options to get the best deal on property damage liability coverage.

Frequently asked questions about property liability coverage

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