Final answer:
Collision Coverage under a Personal Auto Policy covers damage to a car from a collision or upset, but not from theft or fire, which are covered by comprehensive coverage. It is part of an auto insurance policy that spreads the risk of car damages among all insured drivers.
Step-by-step explanation:
Collision Coverage under a Personal Auto Policy primarily helps to pay for repairs to your car if it's damaged in a collision with another vehicle or an object such as a fence or a tree. It can also cover damage from potholes or from rolling your car over (‘upset’). Collision Coverage does not cover theft, fire, or damage due to natural disasters — these are typically covered under comprehensive coverage, which is a separate portion of an auto insurance policy.
A simplified example of automobile insurance would include different groups of drivers experiencing various levels of damages, which could range from minor dents to significant collisions resulting in substantial repair costs. The insurance model spreads the risk among all policyholders. Premiums are calculated based on the total damage incurred, helping to ensure that costs are covered for those who incur them.