We were just hit by an uninsured driver. We do not have uninsured motorist or collision coverage. Is there anything we can do to recover our losses?

Without uninsured motorist or collision insurance, you have no coverage for the injuries or damage caused by the uninsured driver. Your only recourse is to sue the driver in small-claims or civil court. Whether this is the best course of action, though, is debatable. You'll need to hire an attorney, and even if you win in court, you still might have trouble recouping the money. An uninsured driver who can't afford car insurance premiums might not have the financial resources to pay for your losses.

Car insurance has several components. All states except New Hampshire require you to carry liability insurance, which pays for others' property damage and injuries when you cause an accident. However, even New Hampshire has financial responsibility laws that require people to have enough assets to pay for damage and injuries they cause. But as you know firsthand, many drivers break the law.

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A 2009 study by the Insurance Research Council projected the economic downturn would trigger a sharp rise in the number of uninsured drivers to roughly one in six drivers in the United States by 2010. The severity of the problem varies by state.

The five states with the highest percentage of uninsured drivers, according to the report, were:

1. New Mexico, 29 percent
2. Mississippi, 28 percent
3. Alabama, 26 percent
4. Oklahoma, 24 percent
5. Florida, 23 percent

Uninsured/underinsured motorist coverage

No matter where you live, uninsured/underinsured motorist coverage is worth serious consideration. Uninsured motorist coverage pays for your injuries when an uninsured driver causes an accident or when you're hit by a hit-and-run driver. Underinsured motorist coverage kicks in when the at-fault driver doesn't have enough insurance to cover all your costs. Both types of coverage also pay for lost wages if you have to miss work because of injuries.

You can also buy uninsured motorist property damage coverage in some states, a separate coverage that pays for damage to your vehicle when you're hit by an uninsured driver.

Collision and comprehensive coverage

Collision and comprehensive insurance are both optional. Comprehensive pays for damage to your vehicle from causes other than accidents, such as natural disasters, theft, vandalism and collisions with animals. Collision pays for damage from an accident, and would have paid for repairs to your vehicle, minus the deductible, from this accident.

It can make sense to forgo collision and comprehensive coverage to save on car insurance rates if you have an older car that's lost most of its value. In that case, though, make sure you have enough money saved to replace or repair the vehicle if it's damaged.

For more, see the benefits of uninsured/underinsured motorist insurance.