To understand your auto insurance purchase, you should be familiar with a few terms.
Liability insurance covers injuries to other people and damage to their property if you or someone you let drive your car causes an accident. Bodily harm liability must be at least $25,000 per person and $50,000 per accident. Property damage liability must be at least $25,000 per accident. Still, it is a good idea to think about raising the limits.
This insurance covers you, your relatives who live with you, and your passengers if they get hurt in an accident caused by another driver. The driver at fault must have no insurance or lower liability insurance than your uninsured/underinsured motorist limits. It also covers you if the other driver hits you and leaves the scene. The standard coverage is equal to your bodily injury liability coverage. You can buy extra coverage up to twice the amount of your bodily injury liability coverage. You must have at least $25,000 per person and $50,000 per accident by law.
This is extra insurance that covers costs that are higher than what the at-fault driver's insurance pays. Payments from any other source do not decrease this optional coverage.
Here's an example. Your uninsured/underinsured coverage is $300,000, and you suffer $400,000 in personal injury damages caused by another driver. The driver only has $200,000 in bodily injury liability insurance. With standard coverage, you can only collect $200,000 from the other driver's insurance plus $100,000 from your own underinsured coverage due to your $300,000 limit. If you had conversion coverage, you could get $200,000 from your underinsured policy to cover the $400,000 total.