Question: What's the best way to keep my auto insurance premium down? Is it better to take off liability and just go with collision, increase the deductibles, or other options? Even with all the credits we qualify for, the full coverage premium on our two old cars is now much more than we can afford and probably almost more than the cars are worth. Helen, Waitsfield, VT

Answer: There are a number of steps you could take that should reduce your auto insurance bill. One thing you don't want to do is drop liability coverage. In essence, liability coverage pays for any harm you might do to other people in an accident. It's critical if you have assets to protect, such as a home, a paycheck, and savings. The evidence is that many people carry too little liability coverage. (In Vermont, as in most states, there are minimum liability requirements on your mandated auto insurance coverage.)

So what can you do? Here are some things to consider. (Not all of them will apply to you.)

Drop collision and comprehensive coverage on older cars: Collision coverage protects from accidents like hitting another car. Comprehensive gets at damages caused by other sorts of accidents, such as vandalism and hail. Before you get rid of it check out the cost of collision/comprehensive and compare it to the value of the car. For example, Consumer Reports suggest your annual auto insurance premiums for comprehensive and collision are 10% or more of the book value of your car, think about dropping the coverage. It sounds as if this might be a good option for you to investigate.

Higher deductibles: According to the Insurance Information Institute increasing your deductible from $200 to $500 could reduce your collision and comprehensive cost by 15% to 30%. A $1,000 deductible could save you 40% or more. However, many of us don't have much in savings. Make sure you have the money to take care of the higher deductible.

Comparison shop: This is a big one. Prices for the same coverage can vary by hundreds of dollars from company to company. Shop around, but stick with highly rated companies.

Discounts: Some companies offer discounts to motorists who drive less than a predetermined number of miles a year. You should also find out about discounts for airbags, anti-lock brakes, and daytime running lights. There are also safe driver discounts, such as for no accident in three years or no moving violations in recent years.

Maintain good credit: Depending on your state, your credit score may influence your insurance rate.

You can get more information on these and other suggestions from the Insurance Information Institute brochure, 9 Ways to Lower Your Auto Insurance Costs. Consumer Reports offers money-saving tips here.

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