Automobile Insurance — Mandatory Coverage
This coverage protects you against a claim which is made by someone who has been injured in an auto accident for which you are liable.
Example: If you have 25/50/25 liability coverage, the first two numbers tell you the amount your policy will pay for bodily injury due to an accident.
The first 25 means the policy will pay up to $25,000 for any one injured person. The 50 means the most the policy will pay for all persons injured in a single accident is $50,000.
Property Damage Liability
This coverage protects you against a claim for damages to another vehicle or property in an accident for which you are liable.
Example: The third number in the 25/50/25 means that the maximum amount the policy will pay for property damage in one single accident is $25,000.
Uninsured and Underinsured Motorist Coverage (UM/UMI)
Uninsured motorist coverage is required for all policies. It pays you, resident members of your family and occupants of your auto for personal injuries caused by an uninsured motorist or a hit and run driver. No coverage for damage to your vehicle is provided.
Underinsured motorist coverage is very similar to Uninsured, except that the coverage is for personal injuries caused by a motorist with inadequate insurance. If a motorist has 25/50 coverage, and you have 100/300 of underinsured motorist, your insurance will cover you once the medical costs exceed $25,000 (for one person) up to a maximum of $100,000 minus $25,000 of the other person's liability, $75,000 of your uninsured motorist coverage.
These coverages are not "stackable," in that if the medical bills exceed $100,000 in the above example, you cannot add the liable party's $25,000 of liability coverage and your $100,000 of underinsured coverage.