Liability Coverage is the type which covers for the injuries and destruction of the other party’s properties. There are two classifications: property damage and bodily injury. This is usually quoted as a three-part number, like 50/100/25, for example, which means that for one accident, $50,000 is covered for you in bodily injuries per person, $100,000 total bodily injuries and $25,000 for property damage.

Property Damage Liability pays for any item that has been involved in an accident, or experienced damage, usually another person’s car, but is not limited to that. The other property may be a house, structures, or others. It also provides legal defense for you if ever a lawsuit is filed against you by the other party.

Bodily Injury Liability covers for damage on you and another person’s body, not the body of your vehicle. If the other person obtained injuries that are beyond his personal injury protection/coverage, this coverage will be the one to cover the excess amount. If involved in an accident and you don’t have this type of coverage, the other party has the right to sue you.

Physical Damage Liability covers your vehicle or any other vehicle/s that you may be driving, just in case you become subjected to any losses from a collision or any other event. Collision coverage and comprehensive coverage are sorted within this category.

Collision Coverage covers the medical expenses for you and the damage done on your car in the event of a collision. This coverage is limited to the monetary value of your car (actual cash value), which takes into account the downgrading of your car due to use and age. This may not be required by all states, but if your car is loaned or leased, then the finance company may require you to take this coverage.

Comprehensive Coverage pays for the damage done to your vehicle if it becomes involved in an accident other than collision (e.g. theft, fire, storms, earthquakes and other natural calamities, etc.). If you live in an area where the climate is good and robberies are rare, this coverage isn’t that necessary. Usually, comprehensive coverage is the most expensive car insurance policy to obtain, but it can cover a lot of expenses when the need arises.