Auto insurance is a contract between the insurance company and the insured or policyholder.  The insurance contract has mandatory clauses and some optional coverage. 

Automobile insurance premiums are based on a variety of information, such as driving record, location and credit history. Policyholders should work diligently on becoming a safe driver, avoiding high-risk locations and building a good credit score. Do some research on what coverages your state requires, and what is voluntary in the areas of liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage, collision coverage, medical payments coverage and personal injury protection. Evaluate the costs against what risks the policyholder is willing to bear. Recognize that completely eliminating risk may be too expensive to achieve. 

Each state requires by law some insurance with its respective protection limits. The insurance industry recommends that the minimum protection for medical expenses be $ 100,000 per person and $ 300,000 per accident.