What do the auto insurance coverage types actually mean?

An auto policy bundles several distinct coverages. Liability is the core: bodily-injury liability pays for others' injuries you cause, and property-damage liability pays for their car or property — this is what most states require. Collision pays to repair your own car after a crash regardless of fault; comprehensive covers non-crash damage like theft, hail, fire, or hitting a deer. Uninsured/underinsured motorist coverage protects you when the at-fault driver has no or too little insurance. Medical payments or personal injury protection covers your own medical bills. Liability protects your assets; collision and comprehensive protect your vehicle. Many drivers buy state-minimum liability to save money, but minimums are often dangerously low — a serious accident can exceed them and expose your savings. Review whether your liability limits actually match your net worth.