Shop around.

Auto insurance prices vary from company to company, so it pays to shop around. Get at least three auto insurance quotes. You can call companies directly or access information on the Internet. Your state auto insurance department may also provide comparisons of prices charged by major insurers. 

You buy auto insurance to protect you financially and provide peace of mind. It's important to pick a auto insurance company that is financially stable. Check the financial health of auto insurance companies with rating companies such as A.M. Best ( http://www.ambest.com ) and Standard & Poor’s ( http://www.standardandpoors.com/ratings ) and consult consumer magazines.

Get auto insurance quotes from different types of auto  insurance companies. Some sell through their own agents. These agencies have the same name as the auto insurance company. Some sell through independent agents who offer policies from several auto insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet.

But don't shop by price alone. You want a auto insurance company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Contact your state auto  insurance department to find out whether they make available consumer complaint ratios by company.

Select an insurance agent or auto insurance company representative that takes the time to answer your questions. Remember, you'll be dealing with this company if you have an auto accident or other automobile emergency.

Before you buy a automobile, compare auto insurance costs.

Before you buy a new or used automobile, check into auto insurance costs. Your premium is based in part on the automobile's sticker price, the cost to repair it, its overall safety record, and the likelihood of auto theft. Many automobile insurers offer discounts for features that reduce the risk of injuries or auto theft. These include air bags, anti-lock brakes, daytime running lights and anti-theft devices. Some states require automotive insurers to give discounts for automobiles equipped with air bags or anti-lock brakes.

Automobiles that are favorite targets for thieves cost more to insure. Information that can help you decide what automobile to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org)

Ask for higher deductibles.

Deductibles represent the amount of money you pay before your auto  insurance policy kicks in. By requesting a higher auto insurance deductible, you can lower your cost substantially. For example, increasing your deductible from $200 to $500 could reduce your automotive collision and auto insurance comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more.

Reduce coverage on older cars.

Consider dropping collision and/or auto insurance comprehensive coverages on older automobiles. It may not be cost effective to continue insuring automobiles worth less than 10 times the amount you would pay for auto insurance coverage. Any claim payment you receive would not substantially exceed your auto insurance premiums minus the auto insurance deductible. Auto insurance claims occur on average only once every 11 or 12 years. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley Blue Book ( http://www.kbb.com ). Review your auto insurance coverage at renewal time to make sure your auto insurance needs haven’t changed.

Buy your homeowners and auto insurance coverage from the same insurer.

Many automobile insurers will give you a discount if you buy two or more types of auto insurance from them. Also you may get a reduction if you have more than one vehicle insured with the same auto insurance company. Some insurers reduce premiums for long-time customers. But shop around; you may save money buying from different auto insurance companies despite the multi-policy discount.

Source: Insurance Information Institute, Inc. www.iii.org

How much auto insurance coverage do I need?

Almost every state requires you to buy a minimum amount of liability coverage. Chances are that you will need more liability insurance than the state requires because accidents cost more than the minimum limits. If you’re found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out! 

The Insurance Information Institute (I.I.I.) recommends that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your net worth is more than $300,000, consider buying additional liability insurance. You may also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverages are exhausted. Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. If you have your homeowners and auto insurance with the same company, check out the cost of coverage with this company first. If you have coverage with different companies, it may be easier to buy it from your auto insurance company.

In addition to liability coverage, consider buying collision and comprehensive coverage. You don't decide how much to buy. Your coverage reflects the market value of your car and the cost of repairing it.

Decide on a deductible -- the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.

Source: Insurance Information Institute, Inc. www.iii.org