How well do you really understand your auto insurance policy? Odds are you've been buying the same plan for years, or if you changed policies you were driven only by price. All insurance policies aren't identical, though. Your insurance decision should take into account the value of your vehicle, the coverage you want, and even the area where you live. Buying the minimum required by law could leave you financially vulnerable if you drive an expensive car, for instance.

Your auto insurance policy is actually a collection of several insurances, and you should consider each one separately. The features included with a typical policy include bodily injury liability, uninsured motorist coverage, property damage liability, and other coverages. You can adjust most of these factors separately according to your needs when you buy your policy. Are you mostly concerned with the money you might owe others in case of an accident? This is often the case for drivers who don't owe a balance on their cars. In this situation, you'll want to buy liability coverage but don't need collision insurance. Buy at least the state minimum, but consider going for a higher level of coverage if you live in an area where more expensive cars are common.

If you can afford the extra cost, look at luxury coverages like roadside assistance, gap coverage, and mechanical breakdown insurance to make your life as a car owner easier. Take this quiz about auto insurance from the folks at to learn more about the basics of buying a policy.