Automobile Liability Insurance

• States have different limit requirements for automobile liability insurance. Insurers express these limits in thousands of dollars as 30/60/20 or three similar figures. This translates to $30,000 limit for one injury, $60,000 limit for an accident with more than one injury and $20,000 for property damage. Your auto liability coverage pays for injury to the driver, passengers and any property damage up to the limits of the coverage. Ideally, the other driver has liability insurance, and if he is at fault, his liability insurance pays for your injuries and vehicle damage. Most states require liability insurance only, but some states require uninsured motorist, underinsured motorist and sometimes personal injury protection. Personal injury protection is "no fault" coverage for loss of wages and medical expenses.
  
  

Collision Insurance

• Automobile collision insurance covers your vehicle if you are at fault in an accident. You pay for insurance on your car in case you are at fault, and if an accident occurs, the insurer pays to have your vehicle repaired after you pay a deductible. The deductible amount is usually $500 or $1,000. The higher deductible costs less.
  
  

Comprehensive Insurance

• Comprehensive automobile insurance pays for your vehicle for incidents other than a collision. If a limb falls on your vehicle, if someone steals it or a fire damages it, your comprehensive insurance pays for covered perils. Although states do not require comprehensive and collision insurance by law, your finance company may require it as part of the finance agreement. You may choose to cancel the collision and comprehensive insurance as you pay off the loan and your vehicle ages. A deductible exists for comprehensive, and the insurer bases the value of the vehicle on depreciated calculations from an accepted source like Kelley Blue Book--kkb.com--or Edmunds.com.
  
  

Uninsured Motorist Coverage

• You may choose to protect yourself against uninsured or underinsured motorists by purchasing insurance coverage to cover you in case of accident. Some states have a high percentage of uninsured drivers; others enforce the law to require liability insurance. Depending on the state in which you drive, uninsured motorist insurance may be required or it may be a worthwhile purchase.
  
  One of the benefits of uninsured motorist coverage is the inclusion of underinsured coverage. If someone who has minimum liability insurance hits you and the accident is his fault, your damages may exceed the insurance limits. In that case, the driver is underinsured and your insurance may pay amounts in excess of the other driver's liability limits. States vary in uninsured and underinsured motorist terms and requirements. Some states require uninsured motorist coverage equal to the liability limits. Other states require that insurers offer the insurance and use a waiver to refuse the offer.