Losses from property damage, medical and legal costs, and lost income add up to billions of dollars annually for automobile mishaps. Auto insurance plays an important role in protecting consumers from serious financial losses that can result from such accidents.

The basic types of auto insurance coverage include:

Bodily Injury Liability. Pays your legal defense costs and claims against you if your car injures or kills someone. Covers family members living with you and others driving with your permission.

Property Damage Liability. Pays your legal defense costs and claims against you if your car damages another's property. Does not cover your property, including your auto.

Medical Payments or Personal Injury Protection. Pays medical expenses resulting from an accident for you and others riding in your car. Also pays for you or your family members injured while riding in another's car or while walking.

Collision. Pays for repairs of damage to your car caused by a collision with another vehicle or any other object, regardless of who was responsible.

Comprehensive Physical Damage. Pays for damages to your car resulting from theft, fire, hail, vandalism, or a variety of other causes.

Uninsured or Underinsured Motorist. Pays for costs related to injuries or property damage to you or your family members and guests in your car caused by an uninsured, underinsured, or hit-and-run driver

State-by-State Requirements . . .

Not all states require you to have automobile insurance, but all states do require you to prove that you can pay specified amounts if you cause bodily injury or property damage while driving. Your proof would be insurance or large amounts of cash or some other security. Without one of these, you may lose your driver's license and registration. Visit the Insurance Information Institute’s web site at www.iii.org to find the specific auto insurance coverages required by each state.