Auto insurance is not a monolithic thing, meaning it isn't just one big block of insurance where one size fits all. It is a combination of many different types of coverage, the details of which depend upon the policy holder. Some elements of an insurance policy are dictated by the particular state in which the policy holder happens to reside, liability auto insurance being the most common of these. There are other types of coverage that are important for their own reasons, however. Such insurance options like comprehensive coverage, collision coverage, or uninsured motorist coverage could be extremely helpful in the event of an accident.
Liability insurance covers property damage and bodily injury, required by law in almost every state. In the law, it is often stated in the following format: 25/50/15. Each number is the amount (in thousands of dollars) that a policy holder is required to maintain. In this example, $25,000 is set aside to cover a single person involved in the accident, while the $50,000 amount is the total amount of coverage for injuries incurred, completely independent of the number of persons involved.
The final number, representing $15,000 is the amount of coverage that pertains to property damage. It includes someone else's car, but it can also include static objects like road signs. A driver who causes an accident without sufficient insurance will have to pay any of those costs out of their personal funds. Considering today's medical and automobile costs, these minimum levels are usually far too low to cover any significant accident, and it is recommended that most policy holders take a higher level of coverage.
Uninsured or Underinsured Motorist Coverage
There are drivers out there who have no or very little insurance. This type of coverage will protect a driver from that sort of person. It will pay for whatever amount the underinsured driver leaves uncovered. If the underinsured driver causes $10,000 worth of damage and is only insured for $5,000, the policy will pay the remaining $5,000.
Collision and Comprehensive Insurance
These types of insurance are actually optional and do not have to be a part of any policy. However, if the driver still has payments on a financed car, the finance company may require the driver to get at least some minimum level of both these types of coverage. Collision insurance covers just that - collisions, but comprehensive coverage covers everything else - weather, fire, vandalism, and so forth, and will pay any costs involved in repairing the damage such events cause.