Standard auto insurance coverage is another term for the minimum level of coverage required by law in a specific jurisdiction. Each state determines how much coverage a driver must have in place to stay legal independently, and a driver can always choose to buy a policy which provides a higher level of protection if he or she wishes to do so.
A standard policy will likely include third party liability coverage. This protects the policyholder from having to pay for claims for injuries and property damages made by the occupants of the other vehicle following an at-fault accident. The bodily injury portion of the policy pays for medical bills and rehabilitation costs following the accident, as well as funeral expenses. The property damage portion of the policy pays for repairs to the other driver’s vehicle.
Depending on the particular state, uninsured and underinsured motorist coverage may be required. Uninsured motorist coverage pays out when the at-fault driver in the accident does not have insurance. It also comes into play when the driver cannot be identified, such as in the case of a hit and run. This part of the policy pays for injuries and property damage incurred by the policyholder and the passengers in his or her own vehicle. Underinsured motorist coverage is used to make up the difference between the at fault driver’s available liability coverage and the actual cost of damages. The at-fault driver’s insurance is used first and the underinsured coverage makes up the difference, up to the policy limit the driver has chosen.