There are three sections of coverage:

1. Property coverage: pays for damage to or theft of your car.

2. Liability coverage: pays for your legal responsibility to others for bodily injury or property damage.

3. Medical coverage: pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

An auto insurance policy is comprised of six different kinds of coverage. You don't need to buy all of them. Most auto policies are for six months to a year. Your insurance company should notify you by mail when it's time to renew the policy and to pay your premium.

Auto liability insurance is required in almost states.

All states also have financial responsibility laws which mean that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident, or you must purchase at least the state minimum amount of insurance.

If you've financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement.