Auto liability coverage is mandatory in most states. Drivers are legally required to purchase at least the minimum amount of liability coverage set by state law. Liability coverage has two components:
Bodily injury liability may help pay for costs related to another person’s injuries if you cause an accident.
Property damage liability may help pay for damage you cause to another person’s property while driving.
If you’re hit by a driver who doesn’t have insurance, uninsured motorist coverage may help pay for your medical bills or, in some states, repairs to your vehicle. If you’re hit by an underinsured driver, that means they have car insurance but their liability limits aren’t enough to cover your resulting medical bills. That’s where underinsured motorist coverage may help.