1.

Collision: Covers the physical damage done to your vehicle as the result of an accident. This covers your property in accidents in which you are at fault, like a single car accident or collision with a stationary object.

2.

Comprehensive: This covers repairs or replacement of your vehicle from damage caused by "non collision events", such as damages resulting from fire, theft, vandalism, and most acts of God.

3.

Liability - Bodily injury: This covers injury or death caused by a vehicle driven by you or someone covered as a driver under your policy. This coverage pays for both the claim against you and the cost of your legal defense. If you are found to be liable for a higher amount than the policy you bought, you will have to pay the difference. In such a litigious society, it seems sensible to purchase the highest level of coverage that you can get your hands on.

4.

Liability - Property damage: This covers damage caused to another persons vehicle or property. This is not limited to damage done to anothers vehicle. If you drive through someones yard and demolish their garden shed, it would be covered by Property Damage Liability, up to the limit of your liability.

5.

Medical payments or Personal Injury Protection (PIP): Covers you, the members of your household and your passengers for medical expenses resulting from an automobile accident, regardless of who is at fault. Usually limited to $5,000 - $10,000 in most policies.

6.

Uninsured motorist: Bodily injury: Protects you and occupants of a covered vehicle in an accident in which the owner or operator of a motor vehicle who is legally liable does not have insurance.

Property damage: This coverage pays you for damage to your covered vehicle in an accident in which the operator of a motor vehicle who is legally liable does not have insurance.

1.

Comparison shop: Most people are aware that the insurance industry is highly regulated. However, few are aware that each company determines it's own policy rates based on their own unique set of crtieria (in most states). The result is insurance prices for the same coverage that can vary by $100s, sometimes over $1000 from company to company. The best place to comparison shop is online, as it is far less time consuming than calling from agent to agent for quotes. There are Internet sites that will provide you with several comparison rates from highly rated insurance companies. The two best sources I have found are Progressive and Consumers Car Club.

2.

Raise deductibles: deductibles are the amount of money you are paying from your own pocket before the insurance company starts paying. For e.g. if you have a deductible of $200 menas that you pay the first $200 from your own pocket, and after $200 the insuramce company pays the rest.Requesting higher deductibles on collision and comprehensive coverage can lower your insurance costs substantially. Raising your deductible from $200 to $500 could result in a reduction in these premiums by 15% to 30%.The reason why should you request this: most drivers will go years between claims and the savings realized in the first 12 months will cover the difference in out of pocket between a $200 and $500 decuctible.

3.

Reduce coverage on older cars: Vehicles lose value rapidly as they age. After vehicles reach a certain value point it will not be cost effective to carry collision or comprehensive coverage policies on them. You don't want to pay expensive insurance for a low value car, do you?

4.

Take advantage of discounts: There are several discounts that insurance companies offer provided you meet certain requirements. Never assume that you are receiving these discounts. Determine which ones you feel apply to you and then contact your agent to determine if you qualify and always ask for the discounts. Common discounts:

More than 1 car on the same policy

No accidents in 3 years

No moving violations in 3 Years

Drivers over 50 years of age

Successful completion of a driver training course

Anti theft device(s)

Low annual mileage driven

Vehicle equipped with automatic seat belt(s)

Vehicle equipped with air bag(s)

Vehicle equipped with anti-lock brakes

Good student (driving teens with B average or better)

Auto and homeowners coverage with the same company

College students living away from home without a car

5.

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