Liability is the category which covers how much your insurance pays another person if you are "at fault" in an accident (YOU hit THEM).

It covers:

1) Damage to their auto (or property, say if you hit their house)

2) treatment for any injuries they suffer.

Limits specify how much the company will pay and are stated as split limits. The first number is the maximum the company will pay per person per accident up to three (3) people in the car. The second is how much the company will pay total, the maximum in any event.

Example: if you have liability insurance with "100/300" limits, that means in an accident the company will pay up to $100,000 for car damage or injury to per person in the other car (up to three). For one person they will pay $100,000, for 2, $200,000, for 3, $300,000. If there are four or more, the company will not pay more, but will split $300,000 among the occupants. (that is of course maximum limits; they will only pay what is necessary in the actual event if it is less.)

Collision is the category that covers damage to YOUR car if you are at fault in an accident. This covers running your car into anything: another car, a tree, a phone pole, etc. Collision comes with a deductible which you specify. The higher the deductible, the cheaper the rates, by a little bit.

Example: saying you have "500 collision" or "collision at 500" means you have this coverage with a $500 deductible.

Comprehensive is the category that covers non-collision (accident) events. It covers theft of your car or stereo, hub caps, etc., as well as striking an animal or having your car damages by providential events such as tree falling on it, a rock hitting the windshield, a riot destroying it, etc. It also comes with a deductible just like collision.

this article © Alan Goddard

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