For instance, all states require that you carry a certain level of "third party" liability insurance. Third party liability coverage means accident-related bodily injury and/or property damage costs will be paid for victims other than yourself. Third party liability will not cover any of your own medical or repair costs.

Carrying a policy that adheres only to state minimums will keep you in compliance with the law, but it may expose you to risks greater than your comfort-level. For that reason, you might want to use your state minimums as a guide — one that can help you build a policy that best suits your needs, your income, and the things and people you want to protect.

Our Bumper-to-Bumper Basics^SM virtual guides can help clear any confusion you might have about these various coverage options, and help you decide on an auto insurance policy that makes sense for you.

Taken together, Collision Coverage and Comprehensive Coverage help cover damage caused by other vehicles, stationary objects, storms, vandalism, or theft (among other things). Because some of these losses can be expensive, it's important to know the true value of your used vehicle.

For instance, if your used car is worth less than, say, $1,000, having a low Collision Coverage or Comprehensive Coverage deductible may be more cost than it's worth. If you make a claim, even if your vehicle was deemed a total loss, the maximum amount you'd receive would be the actual value of the car (which accounts for depreciation), minus your deductible. This relatively small settlement amount may be worth far less than the amount you'll be paying in premiums. Adjusting your deductibles, or eliminating Comprehensive Coverage and Collision Coverage entirely, may be a way to save money on a used car.