• Different kinds of auto insurance offer different coverage.car image by sasha from Fotolia.com
  
  Auto insurance is not option. Drive without it and one accident or traffic stop later you'll wish you hadn't. Auto insurance policies fall under three major categories: liability, physical damage (comprehensive and collision), and uninsured/under-insured. Liability coverage is mandatory is most states, while the other two are optional depending on the state and the condition of the car.
  
  

Liability

• Liability coverage includes bodily injury and property damage. Bodily injury covers losses due to injury or death caused by an accident for which you are responsible. It pays for medical bills, loss of income, or pain and suffering. Property damage liability pays for property damage such as a damaged wall, fence or house, caused by you or by someone driving your car with your consent. Both bodily injury and property damage liability provide legal leverage should you be sued by the other party. Buy the same amount of coverage for all vehicles you own and enough to cover any potential judgment without jeopardizing your personal assets.
  
  

Comprehensive

• Comprehensive coverage pays for losses resulting from non-collision accidents. These include theft, flood and fire damage, or damage caused by objects or animals, such as a tree limb or a driver hitting a deer. It pays repair costs less a deductible you elect to pay. Comprehensive coverage is required if a driver is leasing or financing a new car and may be a good idea fora car that is less than five years old.
  
  

Collision

• Collision insurance covers damage to your car when it collides with or is hit by another car. Coverage pays for repairs less a deductible you elect to pay. Like comprehensive, collision coverage is required for new or leased vehicles and should also be considered for a vehicle less than five years old. Older vehicles or vehicles in poor condition do not require either comprehensive or collision coverage and may not warrant the extra expense.
  
  

Uninsured/Under-insured-Liability

• Uninsured and under-insured coverage covers injury, damage or death caused by an accident where the driver has insufficient or no insurance. You, other drivers specified in the policy and passengers are covered under this type of policy. Under-insured coverage pays the difference between the other driver's insurance and what your coverage pays.
  
  

Un-insured/Under-insured-Property

• This type of coverage covers your car when damage is caused a driver with insufficient or no insurance. It pays up to an state-specified limit--around $3,500, depending on the state--or repairs if you do not have collision coverage. It may pay your collision deductible if you do, depending on the state. Both property and liability coverage can be purchased together or separately depending on the insurance carrier and state.