What is a deductible and coverage limit?

Your deductible would be the amount of money you pay out of pocket before your policy takes effect. However, each type of policy only covers a certain amount. If your company has a covered loss, your insurer will limit the amount you'll pay to settle your claim. These limits are known as policy limits (or liability limit).

Its size depends on the amount of insurance you have decided to purchase. Your auto insurance liability coverage limits, also known as the liability limit, are the maximum your insurance will pay to another party if you're legally responsible for an accident. A supplemental policy is additional liability coverage that exceeds the limits of your auto insurance policy. Collision: This coverage helps pay for damage to your vehicle if you hit another car or object or if you are hit by another car.

But what is a car insurance deductible and how does it work? A deductible is generally the amount you must pay when a covered loss occurs. Your car insurance deductible is the amount you'll have to pay to cover costs due to a loss before your insurance coverage pays.

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