If you drive a car, you need car insurance. Not only is insurance required by most states, but it will also protect you and your assets if you get into an accident.

There are several components of an insurance policy that you can stitch together based on your needs:

  • Liability insurance protects you should someone sue you for lost wages, pain and suffering and property damage resulting from an accident you caused.

  • Medical coverage pays the bills of anyone injured in a car accident, regardless of who is at fault. Personal injury protection is similar, but only covers you.

  • Uninsured/underinsured motorist coverage will pay out if you get hit by someone who is not insured or underinsured.

  • Collision and comprehensive coverage pays to fix or replace your car due to a myriad of circumstances. Collision coverage pays for damage to your vehicle from a car accident. Comprehensive coverage will take care of damages to your car that are not the result of a car accident, such as theft, vandalism, flooding, hail, fires and accidents involving animals.

The auto insurance rate you’re offered depends on a number of different variables. Where you live, how old you are, the car you drive, your driving history, your credit score - even where you park your car can affect your insurance rates. In order to find the best rates you’ll have to study and compare quotes from various insurance companies.

The bare bones insurance coverage required by most states will cover the medical bills and property damage of an accident you caused. But that may not be enough. The Insurance Information Institute recommends you carry at least $100,000 of bodily injury protection per person and $300,000 per accident, far more than the typical state requirements.

If you’re financing your car, you can also purchase guaranteed auto price insurance, or GAP insurance, which covers you in the event that your car is totaled but you owe more money on the loan than the car is worth. For example, if you still owe $12,000 on your car but your insurance only pays out $10,000, you wouldn’t be stuck paying the extra $2,000 on a car you no longer own. Sometimes this coverage may be too expensive to be valuable, but it’s worth looking into for certain car owners.

Also worth looking into: Check with your current insurance providers to see what they might cover. Your medical insurance may cover you in an auto accident, and your home insurance could cover some property damage. You may also get deals from certain insurance agencies by bundling your policies, such as your home and auto insurance.