Decoding Common Auto Insurance Coverages: Liability, Collision, Comprehensive

Auto insurance policies are bundles of different coverages. The right selections and limits provide financial protection against accidents and vehicle damage. The most common coverages are liability, collision, and comprehensive. However, the details of what each covers and when they apply can be confusing for many drivers. This article will decode these key auto insurance coverages so you can make informed choices for your policy.

Liability Insurance Explained

Liability insurance covers injury or property damage you cause to others when an accident is your fault. It has two components:

Bodily Injury Liability:

Covers medical expenses of people injured in an accident you caused. Payouts cover needs like hospital bills, lost wages, pain and suffering.

Property Damage Liability:

Covers damage you cause to another vehicle or property like buildings and fences you hit. Pays to repair or replace the damaged property.

Liability Limits:

Policies specify dollar limits per person, per accident, and for property damage. Minimums are set by states, typically $25,000/$50,000/$10,000. 100/300/100 is common. Higher limits provide more protection.

When it Applies?

In any at-fault accident where you injure others or damage their property. Covers associated legal judgments and defense costs against you up to the limits.

What’s Not Covered?

Injuries to you or your passengers and damage to your own vehicle. Does not cover hit-and-run drivers either.

Collision Insurance Explained

Collision coverage pays to repair or replace your vehicle after an accident, regardless of who is at fault. Key details:

Covers Your Vehicle:

Applies when your vehicle collides with another car, object, animal, or overturns. Will pay to repair damages or total loss.


You pay the deductible amount first and coverage pays the remaining repair costs. Typical deductibles are $500 or $1000. Higher deductibles lower premiums.

Rental Car:

Provides reimbursement for rental car expenses while yours is being repaired after an accident.

New Car Replacement:

For brand new cars, pays to replace with a new car versus just repairing a badly damaged vehicle.

Not At-Fault Accidents:

Covers your vehicle damage even if the other driver caused the accident. Their liability pays for injury/damages to them.

Leased Vehicle Requirement:

Almost always required for leased vehicles. Repairing vehicles you lease is mandatory to avoid hefty fees.

Comprehensive Insurance Explained

Comprehensive coverage protects against vehicle damage from non-collision incidents including:


Applies if all or part of your vehicle is stolen. Covers the replacement value.


Pays to repair malicious damage from vandalism or riots.

Weather Events:

Covers damage from floods, hail, windstorms, lightning, falling trees/limbs etc.


Applies if vehicle catches fire from mechanical failure or external events like wildfires.

Animal Collisions:

Covers hitting animals like deer, moose, bear, livestock that damage your vehicle.


Pays for damage from fallen rocks, cement, lumber, explosives etc. if your car is hit by debris.

Glass Damage:

Applies to repair or replace broken glass from rocks, accidents, vandals etc. Waives glass deductible.

Key Auto Insurance Factors

Beyond coverages, other elements impact premiums:

Driving Record:

Tickets, accidents, DUIs drive up rates substantially. Maintaining a clean record saves significantly.

Credit History:

Drivers with poor credit pay higher rates on average compared to those with good credit.

Vehicle Type:

Sports cars, luxury brands are more expensive to insure than family sedans and minivans which have lower accident rates.

Coverage Limits:

Minimum liability limits cost least but leave you exposed. Higher limits cost more but provide more protection.


Drivers with long commutes and high annual miles pay more compared to those driving under 5,000 miles a year.

Safety Features:

Cars with airbags, anti-lock brakes, anti-theft devices may qualify for discounts.


Selecting higher collision/comprehensive deductibles reduces premiums but increases out-of-pocket costs per accident.


Understanding key coverages like liability, collision, and comprehensive allows tailoring optimal policies and making choices that balance affordability and protection. Being an informed policyholder avoids surprises at claim time.

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