In the event of an accident, auto insurance provides legal and financial protection for you, your spouse/relatives who live in your household, and others who have permission to drive one of your insured vehicles. Your policy can provide coverage for bodily injury and/or property damage that may be incurred during an accident. In no-fault insurance states, your policy can provide this kind of coverage no matter who is at fault for the accident.

Most states require that you carry a minimum amount of liability insurance. Liability insurance pays damages for which you may be legally liable due to the ownership, maintenance or use of your car. This coverage is sometimes expressed as a single number (single limit), or a string of three numbers (split limit), representing the limits to which you are covered. In split limit liability, the first number is the amount for which you are covered for any one person you injured in a single accident (bodily injury/person). The second number represents the total amount for which you are covered for all persons inured in any single accident (bodily injury/accident). The last number is the amount for which you are covered for any damage you may have caused to another's property in a single accident (property damage).

Although there are state minimums for liability insurance, you may want to consider purchasing more than the required amount. Remember, make sure you can afford the risk you are taking; you don't want to be caught short by a lawsuit and the expenses necessary to defend yourself.

When buying automobile insurance, in addition to liability insurance, you usually are buying a package of several different coverages to meet all of your individual auto insurance needs. The typical coverages to choose from are:

• Bodily injury (BI)
• Property damage (PD)
• Collision
• Comprehensive
• Medical payments
• Uninsured/Underinsured motorist
• Personal injury protection (PIP)

Most auto policies cover you, your spouse, other relatives who live in your household, and others who have your permission to drive your insured vehicle. This would include people to whom you knowingly lend your car. Check your policy, however. Some policies have a Named Operator provision, which requires that all drivers must be listed on the policy to be covered.

Auto insurance can be expensive, but with a little planning you may be able to reduce your costs. Take a few moments to see if any of these scenarios will help you get the coverage you need at a lower rate:

• Choose the highest deductible you can afford.
• Consider not buying certain types of coverage, such as collision or comprehensive coverage, if you can afford to pay for damages to your vehicle yourself should an accident occur.
• Ask your insurance company if it offers a discount.
• Buy used cars.
• Buy cars that aren't expensive to insure.
• Drive defensively.

Yes, most states require that you carry a minimum amount of liability insurance. Liability insurance pays bodily injury or property damages for which you may be legally responsible due to the ownership, maintenance or use of your car. You may, however, opt out of collision or comprehensive coverage if the car has a low resale value, although this may not be the best option for everyone. Remember, only give up coverage if you can afford to pay for damages to your vehicle yourself should an accident occur.

Many states have passed laws permitting the individual automobile accident victim to collect directly from his or her own insurance company for medical and hospital expenses, regardless of who was at fault in the accident. This differs from the traditional tort system where the victim can sue for compensation for damages. There are many variations in the laws of those states that have no-fault statutes. Most states restrict the individual's right to sue the negligent party unless the claim exceeds a certain stated limit.

Policies vary greatly in this respect and you may or may not have coverage. For instance, some policies will cover rentals for personal travel but not for business travel. Additionally, the insurance package offer by the rental agency may not cover you the way you need or expect. To make sure you are appropriately covered, talk to your insurance company about the treatment of rental cars specifically for your policy.

If you have an accident, take your time to gather the information you will need to report a claim correctly and quickly. Summon the police to file a report. (Make sure to get a copy of the report.) Get the license and insurance information of the other driver, and the names, addresses and phone numbers of as many witnesses as possible. Write down everything you can remember about the accident while it's fresh in your mind. If possible, take pictures of all vehicles involved in the accident to prevent the other parties from claiming damage to a vehicle that was not related to the accident. Call your insurance company or your insurance agent right away. Finally, start a file for all the paperwork that will accumulate. Don't throw anything out. Make brief but clear notes of all your contacts with the insurance company, body shop, health care providers, lawyers, and anyone else involved, and keep all the information in the file for quick and easy access. You should retain this information for three to five years until the claim clears your record.

You can change insurance companies anytime, but in some states, you may be hit with a short-rate penalty for switching carriers before your policy expires. Check with your current insurance company before switching to determine if you'll be penalized. If so, do the math. Sometimes the savings you realize from moving to another insurance company will offset any mid-term cancellation penalties.

No. Most states have "anti-steering" laws that say insurers can't force you to go to a particular repair facility. However, if you choose to use a body shop not recommended or approved by your insurer, you may have additional out-of-pocket expenses.

It depends on whether or not you're in a first-party or third-party claim situation. In a first-party situation, when the claim is being paid by your insurer, the check will likely be made out to you and the body shop. In a third-party situation, when the claim is being paid by the other driver's insurer, it's likely that the check will be made payable to you alone.

You can do one of two things: raise your deductible or drop your coverage. The deductible is what you pay out of your own pocket before your insurance policy kicks in. The higher the deductible, the lower your premium. For example, increasing your deductible from $200 to $500 on collision coverage could reduce your premium by as much as 30 percent, according to the Insurance Information Institute. Make sure that you can afford the higher deductible.

Collision coverage is generally not worth purchasing on older vehicles with high mileage and/or little value because if you ever need to file a claim for significant damages, your insurance company will likely declare your vehicle a total loss rather than fix it. That's because the cost of fixing an older vehicle far exceeds its market value. The value you get for the vehicle in the total loss may not justify the premiums you pay for the collision coverage.

Depending on what kind of damage your car suffers, one of your physical damage coverages — comprehensive or collision insurance — will pay for the damages. If your car is hit by a deer or other animal, stolen, catches on fire, or is vandalized, your comprehensive coverage will kick in. If you crash into something and damage your car, your collision coverage will kick in. Both of these coverages are optional and, of course, adding them to your policy will raise your insurance premium.

If you have a loan for the purchase of your vehicle, your bank may have requirements as to whether you need to have both comprehensive or collision coverage on your policy. Be sure to check with your bank at the time of the loan.

If you are moving to another state for more than six months, the proper procedure is to purchase coverage in your new state. That way, you can avoid any potential questionable-coverage issues. And since many policies expire after six months, you would need to purchase coverage at that time, at your new address, unless you maintain a permanent address in your home state.

If you intend to have a vehicle out-of-state for an extended period of time, check with your auto insurance agent. There may be special problems with your coverage if you do not have your normal "drive to work" for an extended period. Keep in mind, however, that your current insurance policy says you are covered anywhere in the United States.

While auto insurers can use a number of factors to determine your premium, including your age, where you live, and how many miles you drive each year, one of the biggest factors they use is your driving record. Since you do not have a driving record in the United States, your premiums will be high because the insurance company has no record of how you drive here.

Once you have driven in the United States for a few years and established a safe driving record, your rates should go down.

If this is your first car, yes, you'll have to buy auto insurance before you drive your shiny new car off the dealer's lot. If you are financing the purchase, the lender may require that you buy a policy with comprehensive and collision coverages. Not all states require the purchase of liability coverage.

If you have owned a vehicle and already have an auto insurance policy, that will generally cover your new automobile for a period of up to 30 days after you buy it. Once that 30-day period is up, you'll have to talk with your insurance agent or company representative to insure that new vehicle. If you are buying a car new from a dealer, your dealer will probably help you by contacting your insurance agent with the new vehicle information, to speed up the process. (Policy will not cover comprehensive damage and collision if current policy doesn't have it.)

Yes, you can always request original equipment manufacturer parts after you've had an accident. Currently, however, some insurance companies might not cover the full cost of OEM parts, if they permit the use of what are called "aftermarket" or "generic" parts.

You should not see a premium increase solely because you were in an accident in which another person was at fault.

However, you may receive a premium increase if that accident was one of several you have had throughout the year or in recent years. If you had several accidents, even if you were found not at fault in each of them, the insurance company may assume there is something hazardous about your driving and thus charge you a higher premium.

No. Your insurance company does not consider the color of your vehicle when calculating your insurance premium. Factors that insurers consider include your driving experience, the kind of vehicle you drive, the number of miles you ordinarily drive each day, your claims history, in some states your credit history and your driving record.

Most states mandate that all drivers provide proof of financial responsibility at registration time or after an accident. Essentially, that's proof that you can pay for an accident. You can do this one of two ways: Post a bond for (amount may vary by state), or buy auto-liability insurance. Most people choose the latter because they don't have thousands in cash lying around.

We cannot tell you whether your auto insurance premium will increase, or by how much. That's because some states have laws governing when and why auto insurers can change policyholders' premiums. Often, insurers are not allowed to raise your rates after just one speeding ticket or other citation. So if this was your first ticket, you might not see any change in your rates.

Even if you have received speeding tickets in the past, different companies have different practices when it comes to raising premiums. Some companies will consider the severity of your violation and raise your rates accordingly; others will raise rates a specific amount per violation.

Some of the reasons a state might classify a driver as high risk include:

• DUI (drunk driving).
• Serious moving violations such as reckless driving.
• Racking up a lot of highway points in a short period of time.
• Being pegged as a habitual traffic offender.
• Causing an accident while uninsured.

Regulations vary from state to state, but high-risk drivers usually have to carry a special form of insurance for three years. More insurance companies are now willing to sell policies to drivers who have been identified as high risk; however, those policies are going to be more costly than a standard auto policy.

It usually makes good financial sense to add your teen as a driver to your existing policy, but only after he or she begins driving, including with a learner's permit or some form of temporary license. In addition, if you're driving an expensive car, it might make more financial sense to buy your teen a safe, older vehicle and get him a policy of his own.

However, in some states, this might not help, since having a teen of legal driving age in the house automatically raises your premiums due to the increased risk of that teen driving your vehicle.

Purchasing uninsured/underinsured motorist (UM/UIM) coverage can protect you against loss in an accident with an uninsured driver. In many states, UM coverage is required by law.

UM coverage will pay for medical bills and pain and suffering if you are hit by an uninsured driver. In some states, UM property-damage coverage is available. If your car is damaged by an uninsured driver and you have UM property-damage coverage, you'll be able to get your car fixed under this coverage, rather than using your collision coverage.

Generally speaking, UM property-damage coverage carries a lower deductible than collision coverage.

Homeowners insurance consists of six different types of coverage to protect you and your property from damage as a result of repair, replacement, legal and medical expenses.

• Coverage A protects the structure of your home and other structures attached to it.
• Coverage B provides protection for other structures or dwellings on your property but not attached to your residence.
• Coverage C covers damage to your personal effects owned or used by you while anywhere in the world.
• Coverage D reimburses you for expenses you may incur if your home becomes uninhabitable due to a loss covered by the insurance policy.
• Coverage E provides coverage if another person brings a claim or lawsuit against you for bodily injury and/or property damage resulting from negligence on your property.
• Coverage F provides coverage for medical payments if a third party is injured by or on your personal property.

Determining the amount of coverage you need is sometimes complicated. Here are some tips to make sure you get the homeowners insurance that's right for you:

• Take inventory. Before you begin shopping for insurance, make sure you have a list of everything you would like to insure.
• Get an appraisal. Explore what it would cost to rebuild your home. Many insurance companies require that your home be insured for at least 80% of its replacement value to be covered for replacement cost.
• Consider liability. If you have children, a swimming pool or entertain often, consider an umbrella liability policy, which, for a premium, will extend your liability coverage limits.
• Insure your house, not the land. Don't include the value of your land in deciding how much homeowners insurance to buy. The land under your house isn't at risk from theft, windstorm, fire and the other perils covered in your homeowners policy.

Insurance is a highly competitive business, and the price you pay for your homeowners insurance can vary by hundreds of dollars from insurance company to insurance company. Here are some ideas for possibly reducing the risk (and the premium) you present to an insurance company:

• Compare different carriers.
• Consider raising your deductible.
• Buy your auto and home policies from the same insurer.
• Buy a home that is less expensive to insure.
• Ask about discounts.
• Compare the limits in your policy and the value of your possessions at least once a year.

Your policy can insure possessions in one of two ways — for either cash value or replacement value. Cash value coverage takes into account the age and condition of items at the time of damage or loss and will compensate you for a portion of the original purchase price. A replacement value policy will pay you to purchase the same or comparable item at today's costs. Replacement value policies tend to cost more than cash value policies.

Whether you own or rent your home, your insurance policy covers damage to your personal effects owned or used by you while anywhere in the world. This includes while you are traveling or while your property is in transit. Be careful, however, most policies have a $1000 coverage limit on expensive personal items such as jewelry, furs, cameras, musical instruments and fine art. You can purchase additional coverage for these items if needed.

No. If you are in a flood prone area it may be wise to purchase flood insurance. In some parts of the country, homes can be damaged or destroyed by mudslides. This risk is also covered under flood policies. Contact your insurance company representative to get this insurance. For information about claims related to flood insurance, call the Federal Insurance Administration at 1.800.427.4661.

No, earthquake coverage is sold as additional coverage to the homeowners policy. To determine whether you should purchase this insurance, talk to your insurance company. In earthquake prone areas, the price of this insurance is relatively high. In other areas, it is relatively inexpensive.

If the boat is stolen from your residence, in most cases, you can recover only $1,000. If the boat is stolen from property other than your insured premises, you are not covered. You are also not covered for liability arising from an accident with the boat. A homeowners policy typically provides liability coverage only for boats with engines less than 25 horsepower. Talk to your insurance company about getting extra coverage, including theft and liability, for your boat, yacht, or personal watercraft.

Call your insurance company as you will probably want to increase your coverage for damages and liability. In fact, it is a good idea to inform your insurance company of any major changes you make to your premises to make sure you are appropriately covered.

Possibly. Each state is different in how they treat this issue, so talk with your insurance company to find out what responsibilities apply to your situation. If you entertain often, you may want to consider an umbrella liability policy which, for a premium, will extend your liability coverage limits.

The acronym HO stands for homeowner. Different types of homeowners policy forms are referred to as HO-1, HO-2, HO-3, and so forth. There are seven basic kinds of home insurance policies and they're pretty much the same regardless of where you live — except for Texas. They tend to be defined by the perils they cover:

• HO-1 (Basic homeowners). Covers your dwelling and personal property against losses from 11 types of perils: fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; theft; damage by glass or safety glazing material that is part of a building; and volcanic eruption.
• HO-2 (Basic homeowners plus). Covers dwelling and personal property against 11 perils plus six more: falling objects; weight of ice, snow or sleet; three categories of water-related damage from home utilities or appliances; and electrical surge damage.
• HO-3 (Extended or special homeowners). Covers 17 stated perils plus any other peril not specified in your policy, except for flood, earthquake, war, and nuclear accident.
• HO-4 (Renters coverage). Covers only personal property from 17 listed perils.
• HO-5 (All risk coverage for building and personal property). This policy form isn't sold very often.
• HO-6 (Condominium coverage). Covers personal property from 17 listed perils along with certain building items in which the unit owner might have an insurance interest.
• HO-8 (Basic older home). Covers dwelling and personal property from 11 perils. Differs from HO-1 in that it covers repairs or actual cash values — not rebuilding costs. This is for homes where some historic or architectural aspects make the home's replacement cost significantly higher than its market value.

While having a dog with a history of biting doesn't automatically disqualify you from getting a homeowners policy, it can make it more difficult and more expensive, especially after several recent high-profile cases in the news with dogs attacking neighbors. You might end up having to get a policy that excludes coverage for anything your dog does, or purchase additional liability coverage specifically for your dog.

Many states have an "insurer of last resort," usually called a FAIR Plan. FAIR Plans were created to give those who couldn't get insurance from the private market a chance to purchase homeowners insurance. Your insurance agent will be able to help you determine if you are eligible for coverage by your state's FAIR Plan or if there are other options you can explore. Or you can contact your state department of insurance.

If you want your belongings covered specifically against damages caused by a flood, the answer is yes. Basic homeowners insurance policies do not cover damage from flooding. Because flood damage happens so infrequently — in many areas — most insurance companies won't even consider writing flood coverage. The National Flood Insurance Program (NFIP) underwrites the overwhelming majority of flood policies in the United States. While most people should at least think about getting flood insurance, it is true that some people need it more than others. It's also the case that some areas may require you to carry flood insurance.

A home warranty will cover repair or replacement costs on items in your home such as your refrigerator and other major appliances, or your central air conditioning system. You do need to have everything in good working order before purchasing a home warranty.

Here is a general idea of the claims process:

1. Insured calls insurance agent or claim service center to report a claim.
2. Claim received in local claim office from service center.
3. The insured receives a call from the claim department to review loss facts and claim-handling procedures.
4. If an inspection is not needed, the adjuster requests information needed to process the claim and issue a settlement check.
5. If an inspection is needed, the claim is assigned to a field adjuster who contacts the insured and sets an appointment.
6. If a contractor is involved, the adjuster attempts to meet with the customer and the contractor to reach an agreed scope and dollar amount of loss. An estimate is prepared and a check is written for the damages.
7. If a contractor is not involved, the adjuster prepares an estimate and issues a check for the damages.
8. If the insured obtains a contractor after the loss is settled, the insured is instructed to have the contractor review the estimate and contact the adjuster with any discrepancies.
9. Every attempt is made to reach an agreed price with the contractor and resolve any discrepancies. If additional money is owed, a supplemental estimate is prepared and a check issued.

Your state's department of insurance should be able to provide you with a list of companies that write mobile home insurance in your state, and possibly a brochure with shopping tips.

It depends. Once an insurer reviews your loss history and finds none, one claim should not affect your rates. If the claim exposes some greater risk on your property, however, such as owning a trampoline or new swimming pool, then you may face a rate increase. Or if less than adequate maintenance is discovered during review of the claim, you may also see a change in your premium or be required to review the entire policy.

No. Generally, you have to own the property that you insure. However, there may be ways for you to take charge of paying for the insurance premiums on your parents' home. Contact your insurance company for more information.

If you own and insure a car, you might ask your auto insurer if it can "bundle" the two policies — auto and renters — together in order to receive a discount.

You can also contact your state department of insurance about providers of renters insurance.

Generally the insurance responsibility lies with whoever's property is damaged. In other words, if a tree falls on your home, no matter where the tree came from, your insurance company should pay for your home repair.

An exception would be if the damage occurred as a result of negligence. For instance, if the tree was dead before it fell, and you had proof that your neighbor knew the tree was dead, the damage becomes your neighbor's liability.

As a rule, state insurance officials suggest that you file a claim with your insurance company and let them deal with it.

Basically, you just need a standard homeowners policy. You should make sure to tell the insurance company or your insurance agent that the house is currently under construction. In many cases, your lending institution will require the insurance coverage be in place before construction starts.

It certainly could be. There are several factors that will influence whether or not you can get insurance for your vacant home. Is the house currently for sale? How long do you plan to leave it vacant? Does someone check on it regularly? Is the house secluded from view? Are water and electricity still connected?

If you rent and have belongings that you can't afford to replace if something happens to them, you need renters insurance. Your landlord may carry insurance, but it will not protect your belongings against fire, smoke, or wind damage, and it will not cover vandalism or theft.

Renters insurance can protect your personal belongings or items that are "in your possession" (such as leased or borrowed items) against losses due to fire, smoke, wind, water, lightning, vandalism, or theft. Your policy can insure possessions in one of two ways — for either cash or replacement value. Cash value coverage takes into account the age and condition of items at the time of damage or loss and will compensate you for a portion of the original purchase price. A replacement value policy will pay you to purchase the same or comparable item at today's costs. Replacement value policies tend to cost more than cash value policies.

Some expensive possessions, such as jewelry or computers, are only covered up to a specified limit on a basic policy. Ask the insurance company what items are included in your policy and up to what limits. You may need to purchase additional coverage for these types of belongings.

Renters insurance will also cover you if someone slips and falls in your apartment or is injured by any of your possessions. The insurance should cover your responsibility to pay medical expenses resulting from these injuries and may cover legal defense costs if you are taken to court over the accident.

Renters insurance is important, and you should always ensure you have the necessary amount of coverage. However, with a little planning, you may be able to reduce your premiums. Take a few moments to see if any of these options will help you get the coverage you need at a lower rate:

• Consider raising your deductible.
• Shop around.
• Ask about discounts.