Most auto policies are for six months to a year. Your insurance company should notify you by mail when it's time to renew the policy and to pay your premium. Your policy probably will have the following coverages:

1. Bodily Injury Liability

   This coverage applies to injuries you, the designated driver or policyholder cause to someone else. You and family members listed on the policy are also covered when driving someone else's car with their permission.

   It's very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savings.

2. Medical Payments or Personal Injury Protection (PIP)

   This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

3. Property Damage Liability

   This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else's property. Usually, this means damage to someone else's car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hits.

4. Collision

   This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000-the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you're not at fault, your insurance company may try to recover the amount they paid you from the other driver's insurance company. If they are successful, you'll also be reimbursed for the deductible.

5. Comprehensive

   This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.

   Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium.

   Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.

   States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

6. Uninsured and Underinsured Motorist Coverage

   This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.

   Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.

If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, which pays for judgements against you and your attorney's fees, up to an amount set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That's what a personal umbrella liability policy provides.

It kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. An umbrella policy will also cover you for things such as libel and slander.

For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

Insurance and Renting a Car

When renting a car, you need insurance. If you have adequate insurance on your own car, including collision and comprehensive, this may be enough.

Before you rent a car:

Contact your insurance company

Find out how much coverage you have on your own car. In most cases, the coverage and deductibles you have on your personal auto policy would apply to a rental car, providing it's used for pleasure and not business. If you don't have comprehensive and collision coverage on your own car, you will not be covered if your rental car is stolen or if it is damaged in an accident.

Call your credit card company

Find out what insurance your card provides. Levels of coverage vary.

If you don't have auto insurance, you will need to buy coverage at the car rental counter. The following coverages are available to you at the rental car counter:

Collision Damage Waiver (CDW)

Sometimes called a Loss Damage Waiver (LDW), this coverage relieves you of financial responsibility if your rental car is damaged or stolen. The CDW may be void, however, if you cause an accident by speeding, driving on unpaved roads or driving while intoxicated. This coverage generally costs between $9 and $19 a day. If you have comprehensive and collision on your own car, you may not need to purchase this coverage. (Note: In New York, collision damage is already included in the rental price and rental car companies are not permitted by law to charge extra for the CDW. New York also restricts the liability of drivers to $100.)

Liability Insurance

This provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. Generally, this does not offer enough protection in a serious accident. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance. It generally costs about $7 to $9 a day. If you don't own a car, and rent cars often, consider purchasing a non-owner liability policy. This costs approximately $200 - $300 per year. Frequent car renters sometimes find this more cost-effective than constantly paying for the extra liability coverage.

Personal Accident Insurance

This provides coverage to you and your passengers for medical/ambulance bills. This type of insurance usually costs about $3 per day but may be unnecessary if you are covered by health insurance or have adequate medical coverage under your auto policy.

Personal Effects Coverage

This provides coverage for the theft of personal items in your car. However, if you have homeowners or renters insurance, you may be covered for items stolen from the car, minus your deductible. You need to have receipts or other proof of ownership. This type of insurance usually costs about $1.25 per day.

Some rental car companies combine personal accident and personal effects coverage together as one type of insurance, while others sell it individually.

The cost of insurance at the rental car counter will vary depending on the rental car company, state, and location of the dealer and the type of car you rent.

Some rental car companies may check your credit and driving history and may deny coverage. Check with the rental car company to find out its policy.

Note: If you're renting a car abroad, you may need an international drivers license.

Insurance and Leasing a Car

If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage. You'll need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.

• Collision covers the damage to the car from an accident with another automobile or object.
• Comprehensive covers a loss that is caused by something other than a collision with another car or object, such as a fire or theft or collision with a deer.

The leasing company may also require "gap" insurance. This refers to the fact that if you have an accident and your leased car is damaged beyond repair or "totaled," there's likely to be a difference between the amount that you still owe the auto dealer and the check you'll get from your insurance company. That's because the insurance company's check is based on the car's actual cash value which takes into account depreciation. The difference between the two amounts is known as the "gap."

On a leased car, the cost of gap insurance is generally rolled into the lease payments. You don't actually buy a gap policy. Generally, the auto dealer buys a master policy from an insurance company to cover all the cars it leases and charges you for a "gap waiver." This means that if your leased car is totaled, you won't have to pay the dealer the gap amount. Check with the auto dealer when leasing your car.

If you have an auto loan rather than a lease, you may want to buy gap insurance to protect yourself from having to come up with the gap amount if your car is totaled before you've finished paying for it. Ask your insurance agent about gap insurance or search the Internet. Gap insurance may not be available in some states.

Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don't have enough assets, you must purchase at least the state minimum amount of insurance. But insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous.

If you've financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement.

The following charts show the laws applicable by state.

Financial Responsibility

Most states require car owners to buy a minimum amount of bodily injury and property damage liability insurance before they can legally drive their cars. All states have financial responsibility laws. This means that people involved in an automobile accident will be required to furnish proof of financial responsibility up to certain minimum dollar limits. To comply with financial responsibility laws, most drivers purchase automobile liability insurance. The first number refers to liability limits for bodily injury for any one person, the second to limits for all persons injured, and the third refers to property damage liability limits. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual and $10,000 coverage for property damage.

State	Liability limits (1)	State	Liability limits (1)	State	Liability limits (1)
Alabama	20/40/10	Kentucky	25/50/10	North Dakota	25/50/25
Alaska	50/100/25	Louisiana	10/20/10	Ohio	12.5/25/7.5
Arizona	15/30/10	Maine	50/100/25	Oklahoma	10/20/10
Arkansas	25/50/15	Maryland	20/40/15	Oregon	25/50/10
California (2)	15/30/5	Massachusetts	20/40/5	Pennsylvania	15/30/5
Colorado	25/50/15	Michigan	20/40/10	Rhode Island	25/50/25
Connecticut	20/40/10	Minnesota	30/60/10	South Carolina	15/30/10
Delaware	15/30/5	Mississippi	10/20/05	South Dakota	25/50/25
D.C.	25/50/10	Missouri	25/50/10	Tennessee*	25/50/10
Florida**	10/20/10	Montana	25/50/10	Texas	20/40/15
Georgia	25/50/25	Nebraska	25/50/25	Utah	25/50/15
Hawaii	20/40/10	Nevada	15/30/10	Vermont	25/50/10
Idaho	25/50/15	New Hampshire*	25/50/25	Virginia	25/50/20
Illinois	20/40/15	New Jersey (3)	15/30/5	Washington	25/50/10
Indiana	25/50/10	New Mexico	25/50/10	West Virginia	20/40/10
Iowa	20/40/15	New York (4)	25/50/10	Wisconsin*	25/50/10
Kansas	25/50/10	North Carolina	30/60/25	Wyoming	25/50/20

(1) The first two figures refer to bodily injury liability and the third figure to property damage liability. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage.

(2) Low-cost policy limits for Los Angeles and San Francisco low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3. This is a pilot program effective from July 1, 2000 until January 1, 2004.

(3) Drivers may choose a Standard or Basic Policy. Basic Policy limits are 10/10/5.

(4) 50/100 if injury results in death.

Liability insurance not compulsory; limits are for financial responsibility.

* Only property damage liability is compulsory.

Source: Alliance of American Insurers, American Insurance Association, National Association of Independent Insurers, Insurance Information Institute.

Liability

State auto insurance laws governing liability coverage fall into four broad categories: no-fault, choice no-fault, tort liability, and add-on. The major differences are whether there are restrictions on the right to sue and whether the policyholder's own insurance company pays first-party (policyholder) benefits, up to the state maximum amount, regardless of who is at fault in the accident.

No-fault: The no-fault system is intended to lower the cost of auto insurance by taking small claims out of the courts. Each insurance company compensates its own policyholders for the cost of minor injuries regardless of who was at fault in the accident. These "first-party" benefits, which are a mandatory coverage, vary by state with no-fault systems. In states with the most comprehensive benefits, a policyholder receives compensation for medical fees, lost wages, funeral costs and other out-of-pocket expenses. The term "no-fault" can be confusing because it is often used to denote any auto insurance system in which each driver's own insurance company pays for certain losses, regardless of fault. In its strict form, the term no-fault applies only to states where insurance companies pay "first-party" benefits and where there are restrictions on the right to sue.

Drivers in no-fault states may sue for severe injuries if the case meets certain conditions. These conditions are known as the tort liability threshold and may be expressed in verbal terms such as death or significant disfigurement (verbal threshold) or in dollar amounts of medical bills (monetary threshold).

Choice no-fault: In choice no-fault states, drivers may select one of two options: a no-fault auto insurance policy, usually with a verbal threshold, or a traditional tort liability policy.

Tort liability: In traditional tort liability states, there are no restrictions on lawsuits. A policyholder at fault in a car crash can be sued by the other driver and the other driver's passengers for the pain and suffering the accident caused as well as for out-of-pocket expenses such as medical costs.

Add-on: In add-on states, drivers receive compensation from their own insurance company as they do in no-fault states but there are no restrictions on lawsuits. The term "add-on" is used because in these states first-party benefits have been added on to the traditional tort liability system. In add-on states, first-party coverage may not be mandatory and the benefits may be lower than in true no-fault states.

	First-party benefits		Restrictions on lawsuits		Thresholds for lawsuits
"True" No-Fault	Compulsory	Optional	Yes	No	Monetary	Verbal
Colorado	X		X		X
Florida	X		X			X
Hawaii	X		X		X
Kansas	X		X		X
Kentucky	X		X	X (1)	X (1)
Massachusetts	X		X		X
Michigan	X		X			X
Minnesota	X		X		X
New Jersey	X		X	X (1)		X (1,2)
New York	X		X			X
North Dakota	X		X		X
Pennsylvania	X		X	X (1)		X (1)
Utah	X		X		X
Puerto Rico	X		X		X
Add-on
Arkansas		X		X
Delaware	X			X
D.C.		X	X (3)	X (3)
Maryland	X			X
New Hampshire		X		X
Oregon	X			X
South Dakota		X		X
Texas		X		X
Virginia		X		X
Washington		X		X
Wisconsin		X		X

(1) "Choice" no-fault state. Policyholder can choose a policy based on the no-fault system or traditional tort liability.

(2) Verbal threshold for the Basic Liability Policy and the Standard Policy where the policyholder chooses no-fault. The Basic Policy contains lower amounts of coverage.

(3) The District of Columbia is neither a true no-fault nor add-on state. Drivers are offered the option of no-fault or fault-based coverage, but in the event of an accident a driver who originally chose no-fault benefits has 60 days to decide whether to receive those benefits or file a claim against the other party. Source: American Insurance Association.

Seat Belt

Only 18 states and the District of Columbia have a primary seat-belt enforcement law, which allows law enforcement officers to stop a car for non-compliance with seat belt laws. The seat-belt usage rate is generally higher in states that have and enforce primary laws. In Canada, which has a primary law, seat belt use averages 92 percent.

State	Enacted Legislation Effective Date	2000 Usage Rate (1)	Primary Enforcement (2)	Additional Information (3)
Alabama	6/1/00	70.6%	X	$25 fine; front seat only
Alaska	9/12/90	61.0		damage mitigation by case law only; $15 fine; all seats
Arizona	1/1/91	75.2		$10 fine; front seat only
Arkansas	7/15/91	52.4		$25 fine; front seat only
California	1/1/86	88.9	X	$20 fine; all seats
Colorado	7/1/87	65.1		$15 fine; front seat only; limited damage mitigation
Connecticut	1/1/86	76.3	X	$37 fine; front seat only
Delaware	1/1/92	66.1		$20 fine; front seat only
D.C.	12/12/85	82.6	X	$50 fine; all seats
Florida	7/1/86	64.8		$30 fine; front seat only
Georgia	9/1/88	73.6	X	$15 fine; front seat only
Hawaii	12/16/85	80.4	X	$45 fine; front seat only
Idaho	7/1/86	58.6		$5 fine; front seat only
Illinois	7/1/85	70.2		$25 fine; front seat only
Indiana	7/1/87	62.1	X	$25 fine; front seat only
Iowa	7/1/86	78.0	X	damage mitigation up to 5% max; $10 fine; front seat only
Kansas	7/1/86	61.6		$10 fine; front seat only
Kentucky	7/13/94	60.0		$25 fine; all seats
Louisiana	7/1/86	68.2	X	$25 fine; front seat only
Maine	12/27/95	NA		$50 fine; all seats
Maryland	7/1/86	85.0	X	$25 fine; front seat only
Massachusetts	2/1/94	50.0		$25 fine; all seats
Michigan	4/1/00	83.5	X	damage mitigation up to 5% max; $10 fine; front seat only
Minnesota	10/1/86	73.4		$25 fine; front seat only
Mississippi	3/20/90	50.4		$25 fine; front seat only
Missouri	9/28/85	67.7		damage mitigation up to 1% max; $10 fine; front seat only
Montana	10/1/87	75.6		$20 fine; all seats
Nebraska	1/1/93	70.5		damage mitigation up to 5% max; $25 fine; front seat only
Nevada	7/1/87	78.5		$25 fine; all seats
New Hampshire		NA		Under 18 years old: $25 fine
New Jersey	5/1/00	74.2	X	$20 fine; front seat only; limited damage mitigation
New Mexico	1/1/86	86.6	X	$25 fine; front seat only
New York	12/1/84	77.3	X	$50 fine; front seat only
North Carolina	10/1/85	80.5	X	$25 fine; front seat only; children under 16, all seats
North Dakota	7/14/94	47.7		$20 fine; front seat only
Ohio	5/6/86	65.3		limited damage mitigation; $25 fine; front-seat only
Oklahoma	2/1/87	67.5	X	$10 fine; front seat only
Oregon	12/7/90	83.6	X	damage mitigation up to 5% max; $75 fine; all seats
Pennsylvania	11/23/87	70.7		$10 fine; front seat only
Rhode Island	6/1/91	64.4		$50 fine; all seats
South Carolina	7/1/89	73.9		$10 fine; all seats
South Dakota	1/1/95	53.4		$20 fine; front seat only
Tennessee	4/21/86	59.0		$50 fine; front seat only
Texas	9/1/85	76.6	X	$50 fine; front seat only
Utah	4/28/86	75.7		$45 fine; front seat only
Vermont	1/1/94	61.6		$10 fine; all seats
Virginia	1/1/88	69.9		$25 fine; front seat only
Washington	6/11/86	81.6		$35 fine; all seats
West Virginia	9/1/93	49.5		damage mitigation up to 5% max; $25 front seat only
Wisconsin	12/1/87	65.4		damage mitigation up to 15% max; $10 fine; front seat only
Wyoming	6/8/89	66.8		$25 fine; front seat only
Total		71.0

(1) Surveys used by states must be actual observation of shoulder belt use by drivers and front seat passengers.

(2) Primary enforcement means police may stop a vehicle and issue a fine for non-compliance with seat belt laws. In other states, the law provides for secondary enforcement. This means that police may issue a fine for not wearing a seat belt only if the vehicle has been stopped for other traffic violations.

(3) Applies to motor vehicle operators and passengers who are 16 years and older. Damage mitigation means that a violation may result in damages, a legal term meaning court awarded compensation for injury, being reduced up to a certain percentage. Fines are the maximum allowed by law.

NA = Not Available.

Source: National Highway Traffic Safety Administration, U.S. Department of Transportation.

Drunk Driving

The federal government encourages states to pass laws deterring drunk driving by adjusting grants for highway funds according to the laws they enact. The 2001 Transportation Appropriations Act withholds a portion of states' highway construction funds if they do not lower the blood alcohol content that defines driving while intoxicated from 0.10 to 0.08 within three years.

		License Revocation
State	BAC (1)	Admin. license rev./ susp (2)	Manda- tory 90-day license rev./ susp.(3)	Open container law (4)	Prelim. breath test permitted by law	DWI plea bargaining prohibited
Alabama	0.08	X	X	X
Alaska	0.10	X	X	X (5)	X
Arizona	0.08	0.08	X	X	X	X
Arkansas	0.08	0.08	X			X
California	0.08	X	X	X	X	X
Colorado	0.10	X	X		X	X
Connecticut	0.10	X
Delaware	0.10	X	X		X
D.C.	0.08	X	X	X	X
Florida	0.08	X	X	X	X	X (6)
Georgia	0.08	X	X	X
Hawaii	0.08	X	X	X	X
Idaho	0.08	X	X	X
Illinois	0.08	X		X	X
Indiana	0.08	X	X	X (6)
Iowa	0.10	X	X	X	X
Kansas	0.08	X	X	X	X	X
Kentucky	0.08			X	X	X (6)
Louisiana	0.10	X		X (5)
Maine	0.08	X	X
Maryland	0.08	X	X	X (6)	X
Massachusetts	0.08 (8)	X	X	X
Michigan	0.10			X	X	X (6)
Minnesota	0.10	X		X	X
Mississippi	0.10	X	X		X	X
Missouri	0.10	X	X		X
Montana	0.10		X	X (6)	X
Nebraska	0.10	X	X	X	X
Nevada	0.10	X		X	X	X
New Hampshire	0.08	X	X	X	X
New Jersey	0.10		X	X		X (7)
New Mexico	0.08	X	X	X		X (6)
New York	0.10 (9)		X	X	X	X
North Carolina	0.08	X		X	X
North Dakota	0.10	X	X	X	X
Ohio	0.10	X		X
Oklahoma	0.10	X		X
Oregon	0.08	X	X	X		X
Pennsylvania	0.10		X	X	X	X (6)
Rhode Island	0.08		X	X	X
South Carolina	0.10	X		X
South Dakota	0.10			X	X
Tennessee	0.10			X (5)
Texas	0.08	X
Utah	0.08	X	X	X
Vermont	0.08	X	X		X
Virginia	0.08	X	X		X
Washington	0.08	X	X	X
West Virginia	0.10	X	X		X
Wisconsin	0.10	X		X	X
Wyoming	0.10	X	X			X

1) Blood alcohol level defining "driving while intoxicated."

(2) On-the-spot driver’s license suspension or revocation if blood alcohol content (BAC) is over the level in column 1 or the driver refuses to take a BAC test.

(3) Mandatory penalty for violation of the implied consent law, which means that drivers who refuse to take a breath alcohol test when stopped or arrested for drunk driving will have their license revoked or suspended.

(4) Prohibits unsealed alcohol containers in motor vehicle passenger compartments for all occupants. Arresting officer not required to witness consumption.

(5) Applies only to the driver.

(6) With limitations or conditions.

(7) Not specifically for drunk driving; Attorney General has established a no plea bargain policy.

(8) Not a per se law. An 0.08 BAC allows "permissible inference" of drunk driving.

(9) Officially 0.10 but BAC as low as 0.05 may be considered driving impaired.

Source: U.S. Department of Transportation, National Highway Traffic Safety Administration; Insurance Institute for Highway Safety; Insurance Information Institute.

Older Drivers

"Older" drivers (age 70 and older) have higher rates of fatal crashes, based on estimated annual travel, than any other group except young drivers, according to the U.S. Department of Transportation.

Recognizing the higher crash rates and the need for older drivers to retain their mobility and independence, some states issue restricted licenses. Depending on ability, older drivers may be limited to driving during daylight hours or on non-freeway types of roads. In most states, restrictions such as these can be placed on anyone's driver's license, regardless of age, if their medical condition warrants it.

	Require retest for renewals at all ages (1)				Age at which states require older drivers to pass tests
State	Vision	Road	Know- ledge	Med- ical	Vision	Road	Know- ledge	Med- ical	Require doctors to report medical conditions (2)
Alabama
Alaska	X	(3)	(3)		69+
Arizona	X	(3)
Arkansas	X
California	X	(3)	(3)	(3)	70+	70+	70+		X (4)
Colorado	X	(3)	(3)	X
Connecticut
Delaware	X	(3)	(3)	(3)	(3)	(3)	(3)	(3)	X
D.C.	X				70+	75+	75+	70+
Florida	X	(3)	(3)
Georgia	X			(3)					X
Hawaii	X	(3)	X	(3)	65+	(3)		(3)
Idaho	X	(3)		(3)
Illinois	X			(3)	75+	75+	75+
Indiana	X			(3)	75+	75+	75+	(3)
Iowa	X	(3)	(3)	(3)
Kansas	X	(3)	X
Kentucky		(3)		(3)
Louisiana	X	(3)	X		70+			60+
Maine					40, 62+ (5)
Maryland	X	(3)	(3)	(3)				70+ (3)
Mass.	X
Michigan	X	(3)	X	(3)
Minnesota	X
Mississippi		(3)	(3)
Missouri	X
Montana	X	(3)
Nebraska	X (6)	(3)	(3)
Nevada	X	(3)	(3)						X
N. Hampshire	X				75+	75+
New Jersey	(7)								X
New Mexico	X				75+				X
New York	X	(3)	(3)	(3)
North Carolina	X	(3)		(3)	50+
North Dakota	X	(3)	(3)
Ohio	X	(3)	(3)	(3)
Oklahoma	(7)
Oregon	X				50+				X
Penns-ylvania	(8)			(8)	45+ (9)			45+ (9)
Rhode Island	X	(3)	X	(3)	70+
South Carolina	X	(3)	(3)	(3)
South Dakota	X
Tennessee (10)
Texas	X			(3)
Utah	X	(3)	(3)		65+				X
Vermont
Virginia	X		(3)
Wash- ington	X	(3)	(3)	(3)
West Virginia									X
Wisconsin	X	(3)		(3)
Wyoming	X	(3)	(3)	X

(1) Periodic retests. Some states will waive vision retests for mail renewal or clean-record drivers.

(2) Physicians must report physical conditions that might impair driving skills.

(3) Retesting only for cause, e.g., after a specific number of accidents or other points and infractions, for specific physical conditions, sometimes at examiner’s discretion.

(4) Specifically requires doctors to report a diagnosis of dementia.

(5) Vision tests are required at first renewal after age 40, at every second renewal after age 40, at every renewal after age 62.

(6) Can be waived if there are no traffic convictions.

(7) Ten percent of all renewals are screened.

(8) Ten percent of drivers at or over age 45 randomly chosen for medical and/or vision test.

(9) Random re-examination at specified age.

(10) Will retest at renewal for non-specified cause.

Source: U.S. Department of Transportation, Federal Highway Administration; American Association of Retired Persons; American Automobile Association; American Association of Motor Vehicle Administrators.

Young Drivers

Young drivers account for a disproportionate number of motor vehicle crashes. States are increasingly adopting laws to help lower the crash rate. One approach has been to lower blood alcohol content (BAC) limits so those young drivers who drink even small amounts of alcohol will be penalized. Another has been to grant young drivers the privilege of a drivers license only after a more rigorous learning period than in the past. This has been implemented by requiring young drivers between the ages of 15 and 18 to apply for a graduated driver license (GDL) to help them improve their driving skills and habits before receiving full driving privileges.

Graduated licensing as defined by the National Highway Traffic Safety Administration consists of three stages. Some of the requirements and recommendations included in Stage 1 (Learner's Permit) are a vision test, a road knowledge test, driving accompanied by a licensed adult, safety belt use by all vehicle occupants, a zero BAC level, and six months with no crashes or convictions for traffic violations. Stage 2 (Intermediate License) includes the completion of Stage 1, a behind-the-wheel road test, advanced driver education training, driving accompanied by a licensed adult at night, and 12 consecutive months with no crashes or convictions for traffic offenses before reaching Stage 3 (Full License).

According to the Insurance Institute for Highway Safety, 32 jurisdictions have three-stage graduated licensing systems. A handful of other states have enacted some components of graduated licensing.

	Graduated Licensing (b)
State	Learner's permit required for a minimum period	Inter- mediate or provisional license required	Restriction on night driving (c)	Passenger restric- tions (d)	Zero or near-zero BAC laws (e)
Alabama					0.02
Alaska	6 months				0.00
Arizona	5 months				0.02
Arkansas (1)	6 months	X			0.00
California (2)	6 months	X	X	X	0.01
Colorado (3)	6 months	X	X		0.02
Connecticut	6 months				0.02
Delaware (4)	6 months	X	X	X	0.02
D.C. (5)	6 months	X	X	X	0.00
Florida (6)	12 months	X	X		0.02
Georgia (7)	12 months	X	X	X	0.04 (f)
Hawaii	3 months				0.02
Idaho (8)	4 months	X	X		0.02
Illinois (9)	3 months (f)	X	X		0.00
Indiana (10)	60 days	X	X	X	0.02
Iowa (11)	6 months	X	X		0.02
Kansas					0.02
Kentucky	6 months				0.02
Louisiana (12)	90 days	X	X		0.04 (f)
Maine (13)	90 days	X		X	0.00
Maryland (14)	4 months	X	X		0.02
Massachusetts (15)	6 months	X	X	X	0.02
Michigan (16)	6 months	X	X		0.02
Minnesota	6 months				0.00
Mississippi (17)	6 months	X	X		0.08
Missouri (18)	6 months	X	X		0.02
Montana					0.02
Nebraska		X	X		0.02
Nevada					0.02
New Hampshire (19)	3 months (g)	X	X		0.02
New Jersey (20)	6 months	X	X	X	0.01
New Mexico (21)	6 months	X	X	X	0.02
New York		X	X		0.02
North Carolina (22)	12 months	X	X (h)		0.00
North Dakota	6 months				0.02
Ohio (23)	6 months	X	X		0.02
Oklahoma					0.00
Oregon (24)	6 months	X	X	X	0.00
Pennsylvania (25)	6 months	X	X		0.02
Rhode Island (26)	6 months	X	X		0.02
South Carolina (27)	90 days	X	X		0.02
South Dakota (28)	6 months	X	X		0.02
Tennessee (29)	6 months	X	X	X	0.02
Texas (30)*					0.07
Utah		X	X	X	0.00
Vermont (31)	12 months	X		X	0.02 (f)
Virginia (32)	9 months	X	X	X	0.02
Washington (33)	6 months	X	X	X	0.02
West Virginia (34)	6 months	X	X	X	0.00
Wisconsin (35)	6 months	X	X	X	0.00 (i)
Wyoming	10 days				0.02

Note: Numbered states have three-stage graduated systems as identified by IIHS.

(a) Designed to aid young novice drivers between the ages of 15 and 18 gain driving experience. To date they apply only to drivers under the age of 18 except for lower BAC laws.

(b) Graduated licensing as defined by the National Highway Traffic Safety Administration: Stage 1: Learner's permit required. Other recommended components are that the driver pass vision and knowledge tests; must drive with a licensed adult age 21 or older; all occupants must wear seat belts; blood alcohol content (BAC) set at zero or near zero (see footnote e); driver must be traffic-offense and alcohol-offense free to move up to the next stage; permit's appearance is distinctive from other licenses. Stage 2 (Intermediate or Provisional): Driver must complete stage 1; must pass a road test; all occupants must wear seat belts; BAC set at zero or near zero; licensed adult required in the vehicle during late night hours; driver must be traffic-offense and alcohol-offense free for 12 months to obtain a regular license. Stage 3: Full license.

(c) These laws vary by state with regard to age of driver, night hours that driving is restricted, and who must accompany driver during night hours. Exceptions may be made for driving to and from work, school activities or emergencies.

(d) Limits the number of passengers a young driver may have in the vehicle to eliminate distractions for an inexperienced driver.

(e) This law specifies that a driver under age 21 can be convicted of drunk driving if found driving with a blood alcohol content (BAC) above the level shown. Conventional BACs for older drivers are generally between 0.08 and 0.10.

(f) Applies to drivers age 18 and under.

(g) New Hampshire does not issue learner's permits. The minimum holding period refers to the intermediate license for 16-and 17-year-olds for the first 3 months only.

(h) For the first six months after a learner's permit is issued. Thereafter there are no restrictions.

(i) Applies to drivers age 19 and under.

* Effective January 1, 2002.

Sources: Insurance Institute for Highway Safety (IIHS), National Highway Traffic Safety Administration (U.S. Department of Transportation), Insurance Information Institute, National Conference of State Legislatures.

There May Be Several Reasons Why You Can't Get Insurance Through Traditional Private Insurance Companies:

• You have a poor driving record.
• You own a special, high performance car.
• You have not driven long enough.
• You have not owned your car very long and therefore have no insurance record.
• You live in an area where theft and vandalism losses are high.

In this case, you have two options:

1. State assigned risk pools.
   State assigned risk pools operate under a system in which every auto insurer participates in proportion to the amount of business they do in that state on a voluntary basis. Each insurer must accept the motorists assigned to it, retaining the profit or absorbing the loss that comes with that customer. The premiums you will pay will be substantially higher under assigned risk pools than directly with a private insurance company, but at least you will be able to obtain coverage. To find the assigned risk pool or the equivalent in your state, ask your insurance agent or the state insurance department.
2. Get a policy from a private insurance company that specializes in "high-risk" drivers.
   You may find a better deal by checking with a private insurance company specializing in "non-standard" auto policies. These companies write policies for people with bad accident records, high-performance cars, or who live in "high-risk" neighborhoods. These companies also may be able to sell you more comprehensive coverage than is available through assigned risk pools. To get a list of companies selling non-standard insurance, contact your insurance agent, state insurance department or Roughnotes (http://www.roughnotes.com ). They will refer you to insurance brokers selling this kind of insurance.

There are many factors that influence the price you pay for auto insurance. The average American driver spends about $700 a year.

Your Premium May be Higher or Lower, Depending on the Following:

1. Your driving record.
   The better your record, the lower your premium. If you've had accidents or serious traffic violations, you will pay more than if you've had a clean driving record. You may also pay more if you haven't been insured for a number of years.
2. The number of miles you drive each year.
   The more miles you drive, the more chance for accidents. If you drive a lower than average number of miles per year, less than 10,000, you will pay less. For instance, some companies will give discounts to policyholders who carpool.
3. Where you live.
   Insurance companies look at local trends, such as the number of accidents, car thefts and lawsuits, as well as the cost of medical care and car repair.
4. Your age.
   In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car.
5. The car you drive.
   Some cars cost more to insure than others. Variables include the likelihood of theft, the cost of the car, the cost of repairs, and the overall safety record of the car.
6. The amount of coverage.
   Of course, like anything else, the more coverage you have, the more you pay. However, you may qualify for discounts.

There are several standard guidelines for determining the value of your car for insurance purposes. You and your insurer can refer to the Blue Book, which lists the depreciated value of all new and used cars. One Blue Book is published by the National Automobile Dealers Association (NADA) at http://www.nada.com. The other is published by Kelley Blue Book of Irvine California at http://www.kbb.com.

When you file your claim, your insurance company will refer you to a claims adjuster. The adjuster will verify the loss and determine what it will cost to repair the car. The adjuster's estimate can serve as a benchmark to compare your own mechanic's estimate.

No good adjuster or insurance company will expect you to sign an agreement accepting the insurer's estimate as the total claim payment until you've established, to your satisfaction, that it will cover the cost of repair. The insurer will expect you to get your own estimate from your mechanic, garage or car dealer. Don't allow yourself to feel pressured into accepting the insurer's estimate of repair costs without getting at least one estimate of your own.

Your insurance company can't require you to have repairs done at a particular shop. But they can insist that you get more than one estimate for the work to be done on your car. Just as you want to make sure that your car is adequately repaired, the insurer wants to make sure it doesn't pay a grossly inflated repair bill.

Don't be surprised if your insurance company opts to pay for the lowest bid. You don't have to accept that bid if you believe the low bid won't adequately repair your car. Don't hesitate to argue with the adjuster if you really believe his repair estimate is too low based on what your mechanic has told you.

One factor that could reduce the amount of your claim for a repair job is what insurance companies call betterment. If your old car is repaired with brand-new parts, your insurer may argue that the repairs have actually enhanced the car's value and therefore they can legitimately reduce your claim by the difference between a used part and a new one.

It's up to your insurer to decide whether to pay for repairing your car or to declare it a total loss and pay you its book value. Most standard auto policies will not pay to repair a vehicle if the repairs cost more than the cash value assigned to the car. There won't be any dispute about whether to repair the car if it was completely totaled. But you may argue about what the pieces of the car were worth when they were assembled as a car. For you to get a settlement higher than the Blue Book value of your car's make and model, you will have to submit evidence such as mileage records, service history and affidavits from mechanics to show that your car was worth more. You're entitled to the market price of the car you just lost. You shouldn't get more or less than what you are due.

Your insurance company can't require you to use only certain kinds of auto repair parts. However, if the insurance company's rates are based on a certain type of part and you want something different, it can ask you to pay the difference if the part you want is more expensive.

The parts most frequently damaged in auto accidents are "crash parts." These are the sheet metal pieces that cover the engine and frame of the car. These may be parts known as original equipment manufacturer (OEM) parts, or generic parts. These crash parts do not affect the safety of the car. The development of a market in generic parts has brought prices for car replacement parts down and saved consumers money.

In general, if generic parts have been ordered for the repair of your car, this information must be disclosed. The car repair order should state that the parts are not from the original manufacturer and the warranty may be different. Many generic parts are made at the same factories as OEM parts, and in fact very few OEM parts are actually made by car makers.

Insurance companies that use generic parts guarantee the parts they use. If the part doesn't fit properly, the insurance company will generally put on an OEM part at no extra cost.

Some auto insurance companies offer their policyholders a choice between OEM and generic repair parts as part of an endorsement (addition to the policy that changes its terms and conditions) that includes other choices as well. Some always specify OEM parts for repairs and some use OEM parts for repairing recent model cars. A few states require insurance companies to offer generic parts when they exist and some may require OEM parts to be used.

Ask your insurance agent about your state and your insurance company's claim settlement guidelines so that you'll know what to expect if your car has to be repaired after an accident.

Before you buy a car, compare insurance costs.

Before you buy a new or used car, check into insurance costs. Your premium is based in part on the car's sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include air bags, anti-lock brakes, daytime running lights and anti-theft devices. Some states require insurers to give discounts for cars equipped with air bags or anti-lock brakes.

Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety (http://www.iihs.org).

Ask for Higher Deductibles.

Deductibles represent the amount of money you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more.

Reduce Coverage on Older Cars.

Consider dropping collision and/or comprehensive coverages on older cars. It may not be cost effective to continue insuring cars worth less than 10 times the amount you would pay for coverage. Any claim payment you receive would not substantially exceed your premiums minus the deductible. Claims occur on average only once every 11 or 12 years. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley Blue Book (http://www.kbb.com).

Review Your Coverage at Renewal Time to Make Sure Your Insurance Needs Haven't Changed.

Take Advantage of Low-Mileage Discounts.

Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

Seek Out Safe Driver Discounts.

Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also qualify for a cut if you have recently taken a defensive driving course.

Inquire About Other Discounts.

You may get a break on your insurance if you are over 50 or in some cases 55 and retired or if there is a young driver on the policy who is a good student, has taken a drivers education course or is at a college, generally at least 100 miles away.

When You Comparison Shop, Inquire About Discounts For:

• $500 deductible
• $1,000 deductible
• More than 1 car
• No accidents in 3 years
• No moving violations in 3 years
• Drivers over 50-55 years of age
• Driver training course
• Defensive driving course
• Anti-theft device
• Low annual mileage
• Air bag
• Anti-lock brakes
• Daytime running lights
• Student drivers with good grades
• Auto and homeowners coverage with the same company
• College students away from home
• Long-time customer
• Other discounts

*The discounts listed may not be available in all states or from all insurance companies.

Almost every state requires you to buy a minimum amount of liability coverage. Chances are that you will need more liability insurance than the state requires because accidents cost more than the minimum limits. If you're found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out!

The Insurance Information Institute (I.I.I.) recommends that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your net worth is more than $300,000, consider buying additional liability insurance. You may also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverages are exhausted. Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. If you have your homeowners and auto insurance with the same company, check out the cost of coverage with this company first. If you have coverage with different companies, it may be easier to buy it from your auto insurance company.
In addition to liability coverage, consider buying collision and comprehensive coverage. You don't decide how much to buy. Your coverage reflects the market value of your car and the cost of repairing it.

Decide on a deductible -- the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.