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INSURANCE 101.

Types of Mandatory coverage:
   Bodily injury liability. If you injure someone in a car accident, this coverage pays that person's medical and rehabilitation expenses, and any damages for which he or she may sue you. In most states, you must buy coverage of at least $15,000/$30,000 (the $15,000 pays for injuries to one person; the $30,000 is the total available per accident).
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   Property damage liability. If you're at fault in an accident and you damage someone's property, this coverage pays to fix it. In most states, you must buy $5,000 worth of coverage. Many standard policies include a higher limit-often $25,000. (Of course, if you total a new Mercedes, you'll need more).
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   Medical benefits. This coverage pays medical bills for you and others covered on your policy, no matter who was at fault in the accident. In most states, you must buy at least $5,000 worth of coverage. The typical driver buys $10,000.
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In addition to the mandatory coverage , you may want:
   Collision. It's all well and good to pay to fix someone else's car, but this coverage will pay to fix yours.
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   Comprehensive. This coverage pays for theft, as well as damage to your car from "hazards," including fire, flood, vandalism or striking an animal.
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   Uninsured/underinsured motorist. If you're injured in an accident and the person who hits you doesn't have enough insurance -- or any insurance -- you'll be glad you have this coverage. It will pay for your losses and damages, including your medical bills, lost wages, and pain and suffering.

Ways To Lower Your Insurance

Here are some basic ways to lower your monthly payment:
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COMPARISON SHOP The insurer you select should offer both fair prices and excellent service. Quality personal service may cost a bit more, but provides added conveniences, so talk to a number of insurers to get a feeling for the quality of their service. Ask them what they would do to lower your costs. Check the financial ratings of the companies too. Then, when you've narrowed the field to three insurers, get price quotes.
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ASK FOR HIGHER DEDUCTIBLES Deductibles represent the amount of money you pay before you make a claim. By requesting higher deductibles on collision and comprehensive (fire and theft) coverage, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision cost by 15% to 30%.
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DROP COLLISION AND/OR COMPREHENSIVE COVERAGE ON OLDER CARS It may not be cost-effective to have collision or comprehensive coverage on cars worth less than $1000 because any claim you make would not substantially exceed annual cost and deductible amounts. Auto dealers and banks can tell you the worth of cars.
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ELIMINATE DUPLICATE MEDICAL COVERAGE If you have adequate health insurance, you may be paying for duplicate medical coverage in your auto policy. In some states, eliminating this coverage could lower your personal injury protection (PIP) cost by up to 40%.
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FIND OUT ABOUT AUTOMATIC SEAT BELT OR AIR BAG DISCOUNTS You may be able to take advantage of discounts on some coverage if you have automatic seat belts and/or air bags.