Differences between Runtime/Checked/Unchecked/Error/Exception

Since I am a new Java developer, I have also faced some difficulties for distinguishing and dealing with different types of exceptions. That is why I have made a short note on this topic, and whenever I get confused I go through it. Here it is with the image of the Throwable class hierarchy:

[image courtesy of JavaTpoint].

There are three key classes to remember here: Throwable, Exception and Error. Among these classes Exception can be divided into two types: “Checked Exception” and “Unchecked Exception”.

Checked Exception:

• These are the classes that extend Throwable except RuntimeException and Error.
• They are also known as compile time exceptions because they are checked at compile time, meaning the compiler forces us to either handle them with try/catch or indicate in the function signature that it throws them and forcing us to deal with them in the caller.
• They are programmatically recoverable problems which are caused by unexpected conditions outside the control of the code (e.g. database down, file I/O error, wrong input, etc).
• Example: IOException, SQLException, etc.

Unchecked Exception:

• The classes that extend RuntimeException are known as unchecked exceptions.
• Unchecked exceptions are not checked at compile-time, but rather at runtime, hence the name.
• They are also programmatically recoverable problems but unlike checked exception they are caused by faults in code flow or configuration.
• Example: ArithmeticException,NullPointerException, ArrayIndexOutOfBoundsException, etc.
• Since they are programming errors, they can be avoided by nicely/wisely coding. For example “dividing by zero” produces an ArithmeticException, which can be avoided by a simple check on the divisor. Similarly we can avoid NullPointerException by simply checking the references: if (object != null) or even using better techniques.

Error:

• Error refers to an irrecoverable situation that is not being handled by a try/catch.
• Example: OutOfMemoryError, VirtualMachineError, AssertionError, etc.

Why are these many types?

In addition to Stephen C‘s answer I want to say:
exception handling is a relatively expensive operation in Java. We should not put all exceptional situation in a try/catch block. Excessive use of try/catchs may hamper program performance.

In conclusion, Exceptions should be handled programmatically whenever possible. On the other hand, we cannot handle Errors, so these might be some logical reasons why there are many types of exceptions.