(MONEY Magazine) – TWO YEARS AGO, WHEN Donna and Donald Vigliotti of Hamden, Conn. bought a new ( $17,000 Jeep Cherokee to complement their valiant but aging 1981 Subaru, they knew that their auto insurance costs would rise. But they were stunned when their insurer, Aetna Casualty & Surety, nearly tripled the premium for the two cars to $1,700 a year. The couple promptly located another carrier, Colonial Penn, which agreed to cover the cars for $1,300 -- until last fall. Then it was Colonial's turn to jack up the Vigliottis' premium, this time by nearly 50%, to $1,920. ''And they called us preferred customers,'' fumes Donna, 35. ''I felt like a sucker.'' Welcome to the infuriating, chaotic and increasingly unaffordable world of auto insurance. A few grim facts: -- Auto premiums increased at an annual rate of nearly 8% over the past decade, while other consumer prices rose 4.7%. The average annual premium today is $650, vs. $290 in 1981. -- Partly because of higher insurance rates, an estimated 17 million drivers (about 10% of the total) now hit the roads with no insurance at all, up from 10 million (7% of the total) a decade ago. Such motorists cause one in eight serious accidents. -- The dozens of recent consumerist initiatives aimed at taming insurance prices have made little headway. The main effect, in fact, has been to drive insurers out of the states most in need of competitively priced policies. For example, in September, Allstate Insurance Co. announced its intention to leave New Jersey, citing, among other factors, the state's efforts to legislate low rates for high-risk drivers. The unpleasant truth is that insurance premiums will continue to soar as long as the costs of lawsuits, medical care and car repairs do. ''There is no Lone Ranger and no silver bullet for auto insurance problems,'' says David Snyder, senior counsel for the American Insurance Association. ''Consumers must cut their own costs by shopping for the cheapest insurer, making intelligent coverage choices and driving safely.'' Such steps could cut your auto insurance bill by $200 to $600, or possibly as much as $1,000. By far the most effective way to slash your costs is to compare quotes from at least five companies whenever you enter the market for a new policy. Whatever kind of driver you are and wherever you live, differences among competing insurers -- such as whether they sell directly to consumers or through agents -- all but guarantee you will find coverage in a wide range of prices. Our survey of large insurers (see page 160) found that premiums for ) identical policies in the same city could differ by as much as $1,000 a year. ''Most people don't shop hard enough,'' says Stephen Brobeck, executive director of the Consumer Federation of America. ''Consumers must become more demanding.'' Whatever you do, don't simply accept some independent insurance agent's assurance that he or she can find you the best price. In fact, the most expensive policies tend to be the very policies that independents sell. The reason: companies that market through independent agents must pay higher commissions than do those that employ their own sales force, such as State Farm and Nationwide, or those that sell policies directly to customers, such as Amica Mutual. There are exceptions, however, so it often pays to get prices from several companies and then to challenge an independent agent to beat them. Before you start comparing premiums, figure out how much protection you need. A standard package includes six basic coverages: bodily-injury liability, property-damage liability, collision, comprehensive, uninsured- motorist coverage and medical (or, if you live in a state with no-fault insurance laws, personal-injury protection). Your goal is to eliminate the coverage you don't need and to take no more than necessary of the rest. You definitely should not skimp on the two liability coverages: bodily injury, which pays medical bills for anyone you may injure, and property damage, which covers any car or other property that you might damage in an accident. Most states require you to buy a minimum amount of each. Bodily- injury minimums range from $20,000 to $50,000 for each victim, up to $40,000 to $100,000 an accident; property damage ranges between $5,000 and $25,000. These minimums almost certainly fall short of your needs. Most advisers recommend getting bodily-injury coverage of at least $100,000 a person up to $300,000 an accident. If your net worth exceeds $300,000 (the typical MONEY reader's is between $250,000 and $500,000) get at least $200,000 a person and $500,000 an accident, especially in a lawsuit-happy state like New York, where auto accidents wind up in court three times as often as they do in the country as a whole. If the value of your assets exceeds the maximum limits of your insurer's bodily-injury protection, you might consider bolstering your coverage with an umbrella liability policy, usually available as an add-on to your homeowners policy. This insures you against judgments in excess of your auto and + homeowners protection. To get it, you generally have to insure both your home and car with the same company, and you may have to carry liability well above the minimum. Geico, for example, requires umbrella policyholders to have bodily-injury coverage of $300,000 a person. You should also get at least $50,000 in property-damage coverage. In an unlucky moment you could easily cause far more damage than would be covered under the typical state minimum package of $5,000 to $25,000. How much does all of this cost? A married couple in their mid-thirties living in Dallas and driving a 1988 Audi 90 and a 1991 Ford Taurus might pay $793 a year to insure the two cars with Nationwide. Liability coverages of $100,000 an injured person up to $300,000 an accident, plus $50,000 in property damage, would consume around $356 of that sum, of which $237 would go for bodily-injury coverage and $118 would pay for property-damage protection. For another $120, the couple could add a $1 million umbrella policy. ANOTHER ESSENTIAL PART of any basic package is uninsured-motorist coverage ($20,000 to $40,000 is required in many states). If you were to have an accident involving an uninsured driver, this coverage would pay for injuries to your passengers, your own ''pain and suffering,'' and other expenses that health plans do not pick up. Coverage runs about $40 a year for $100,000. Pay it. When it comes to other parts of the typical insurance policy, however, you should look for chances to shave costs. Start with collision and comprehensive coverages, which together might absorb more than 40% of your total premiums. Collision pays for accident damage to your car, while comprehensive covers most other risks to the car, ranging from theft to natural disasters. Unlike the coverages discussed so far, both are subject to deductibles of anywhere from $50 to $1,000. (The deductible is the amount you pay out of your own pocket before the insurance kicks in.) Choosing high deductibles can lower your premiums considerably. Typically, for every $100 your deductible rises, the cost of your collision coverage drops by 7% to 15%. Your comprehensive coverage might drop 15% to 30%. Because collision and comprehensive are so costly, it rarely makes sense to carry them on cars more than five years old. As a rule, drop collision if the most you can expect to receive as a settlement would equal just a few years' premiums. Some advisers recommend holding on to comprehensive, however. Their ! reasoning: if someone steals your car, you might recover at least enough to meet the down payment on a replacement. There is also room to save on medical coverage, an optional feature usually offered outside no-fault states. This pays physicians' fees, hospital bills and sometimes funeral expenses for the driver or passengers. Your life and health insurance probably render this coverage unnecessary. Possible savings: as much as $100 a year. IF YOU LIVE IN ONE OF THE 15 states with no-fault insurance 1 -- which generally requires your insurer to pick up your damages even if someone else caused the accident -- you may have to buy personal-injury protection, or PIP. This covers your medical bills as well as some portion of wages lost if you are disabled in an accident. If your health plan agrees to be the primary payer for accident-related medical bills, you could cut your PIP costs by as much as 40%. Though your agent is likely to offer you a range of other minor coverages, you can probably dispense with them. If you own two cars, for example, you needn't spend $15 or so a year for rental-reimbursement coverage, which pays $15 to $25 a day for as long as 30 days toward a rental car when your car is being repaired after an accident. Likewise, if you belong to a motor club like AAA, you can get along fine without towing insurance. That's another $15 or so in savings. Apart from cutting unnecessary coverages, your best chance for putting a lid on premiums is to be a low-risk driver. Staying out of accidents and traffic court, for example, could save you roughly 40% in premiums. Many insurers will permit two or three violations (including speeding tickets) or one accident within a three-year period before bumping you from the elite of their ''preferred'' customers -- those who get the lowest rate -- to the ranks of their ''standard'' or, worse, ''nonstandard'' risks. If you do have a spotted driving record, your insurer may refer you to one of its subsidiaries for higher-risk drivers. For example, State Farm Mutual may transfer your policy to State Farm Fire & Casualty, where you will pay as much as double the premium charged by the parent company. If you have a serious violation like a drunken-driving conviction, however, you may not find an insurer willing to write you a policy at any price. In that case, an agent can direct you to a state insurance pool, where everyone is granted the coverage they request -- though often at premiums four times as high as a preferred rate. IF YOU ARE BUYING A NEW CAR, you can also cut costs by favoring models with histories of few insurance claims. Claims records are compiled for hundreds of models by the Insurance Institute for Highway Safety in Alexandria, Va. (IIHS data are used to grade more than 500 different 1992 models for insurance costs in the MONEY tables that begin on page 177.) According to the IIHS, a Pontiac Firebird Trans Am, for example, is twice as likely to be involved in a costly accident as a Dodge Caravan, and the two cars' premiums will reflect this fact. Selecting a car with a favorable claims rating can save you as much as $200 a year in premiums. When you start phoning insurers, ask not only about current premiums but also about possible future costs. How much will premiums rise if you get a speeding ticket or two? What if you get into an accident? Allstate, for example, will turn a blind eye to your first speeding ticket, but your premium will rise 10% to 20% for your first claim for an accident that you caused. At Nationwide, your premium would jump 30% after the first accident claim if you have been insured with the company less than five years. The company would forgive the claim for long-term customers. FINALLY, DON'T WAIT FOR your agent or other salesperson to volunteer information about discounts for which you may qualify -- ask. Most companies give a 10% to 15% break for insuring both your house and your cars with them. Driver's education can trim premiums for new drivers and seniors by 5% to 10% at Geico and USAA, while Allstate gives breaks of between 5% and 15% for safety features such as air bags and anti-lock brakes. Some companies even give nonsmokers discounts of up to 25%. That kind of hard-nosed shopping and cost pruning eventually let the Vigliottis regain control of their insurance costs. They dropped collision coverage on their older Subaru and raised their new Jeep's deductible to $500. Then they got quotes from five insurers and settled on a package with Keystone Insurance. Reason: Keystone allowed them to carry only the state's minimum liability ($20,000 an injured person up to $40,000 an accident, plus $10,000 of property-damage coverage) and covered them above those amounts with a $1 million umbrella policy. Total premium: $1,338 a year for the basic policy and $116 for the umbrella. That's $466 less than their previous insurer demanded -- and they're getting better coverage. ''We're happy so far,'' says Donna. / ''The telltale sign will be when the year is up and our rates aren't.''

FOOTNOTE: 1 Colorado, Connecticut, Florida, Georgia, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: The prices to beat in 20 metro areas To find competitively priced auto policies, we asked 10 national insurers for rates for typical drivers in 20 representative cities. Aetna, Allstate, Travelers, USF&G and USAA declined, saying they wouldn't generate quotes within our two-week deadline. Of the remaining five, Nationwide (marked by an N below) usually underpriced Amica Mutual (A), Geico (G), Liberty Mutual (L) and State Farm (S). Reasons: Nationwide reduces commission costs by selling policies through its own agent force and is also among the quickest to drop drivers who get into accidents.