For lots of Americans auto insurance is a very expensive purchase. To make an informed decision you should learn as much as you can about the underwriting factors that affect the cost, the different amounts of coverage available, the requirements in your state, and about what insurance companies have the best rate for you.

A survey conducted by the National Association of Insurance Commissioners found that the average annual premium for each car was $855 (that includes liability, collision, and comprehensive coverage’s). Understanding auto insurance is the first step towards ensuring that you have the right coverage at the best price.

Reducing the Cost of Your Auto Insurance
You can often significantly reduce your auto insurance coverage costs by taking advantage of discounts offered by insurers. Discounts are available to drivers who seem like better risks to insurance companies. Look for the following types of discounts when pricing your insurance needs:
• Insure all your vehicles with the same insurer.
• Insure your home and car with the same insurer.
• Consider purchasing your life insurance coverage and car insurance from the same company.
• Take a driver's education course.
• If in school, get good grades.
• Buy a car with safety equipment like air bags, automatic seat belts, and antilock brakes.
• Invest in antitheft devices.
• Keep your mileage low. The less you drive, the less risk you have of being in an accident.
• Drive safely. A good driving record is your most valuable cost cutting opportunity.
• Four door vehicles cost less to insure than two door vehicles. Tow door vehicles are considered sports cars.
Other Considerations
When purchasing auto insurance or in reviewing your existing policies, there are some general considerations you will want to be aware of. Make sure the policy provides as much protection as is necessary. Know the maximum dollar amount the insurance company will pay. Be aware of your deductible amount, which is the amount you must pay before your insurance company will pay anything. Know what your responsibilities are if an accident occurs.