OK … so it's a hokey heading, but honesty is tricky business, isn't it? And I'm not here to debate the difference between a “white lie” and a real lie or the morality of honesty in general.

But I can tell you that being dishonest with your insurance agent or company is not only tricky business, it's dangerous business … for a number of reasons.

First of all, in Secret # 1, I said insurance is like taxes, because you're under no obligation to pay one penny more than the law requires. But there's more to the story …

With taxes, you're also obligated to pay not one penny less than the law requires – or you risk penalties, interest and jail time! And just like taxes – where evasion is a crime - lying on an insurance application to get lower rates is a crime, too. It's called insurance fraud.

But ripping off the insurance company isn't the biggest problem with being “less than truthful”. People who lie to get lower rates are shooting themselves in the foot without even knowing it!

One shot in the foot … while certain acts of insurance fraud carry with them hefty fines and imprisonment, it's doubtful you'd wind up in jail for lying to an agent or a company. However, you will get your policy canceled. And when that happens your next policy will be much more expensive. Not a wise investment.

Two shots in the foot … your agent can't properly protect you if she doesn't know the truth. Insurance is complex, and policies don't cover everything. They're full of “exclusions” that specifically take away coverage on certain items or for certain causes of loss.

You may have property or activities that aren't covered now, but could be if your agent knew the truth. Rule # 1 of insurance … after the claim it's too late to insure it. Keep that in mind when you're answering questions.

Three shots in the foot … This is by far the most dangerous consequence of dishonesty … being dishonest could lead to your legitimate losses not being paid by the insurance company!

That's right. In some circumstances, if you're using your vehicle in a manner you did not disclose, the company can legally deny your claim. That means YOU pay for all damages. Saving a few bucks on the front end won't make much sense when you're staring at a $2,000 repair bill, or worse … a $250,000 lawsuit from the person you put in the hospital.

Nobody cares about you more than you. And nobody knows you better than you. That makes you the best person to make decisions for you … provided you understand your options. (Whew!)

What the heck does that mumbo-jumbo mean?

Have your insurance agent explain your options in as much detail as you need. If your agent isn't willing to do that … find another agent in a hurry.

Should you ask your agent's advice and opinion? Of course, that's why we're here. Just make sure you get a good explanation for why he's making his recommendation, and make sure you agree with it.

And note I didn't suggest you ask your neighbor or brother-in-law what to do. Professional, licensed insurance agents have the knowledge to guide you to the best choices for you. Your neighbor can only tell you what she thinks is best for her. No matter how it appears on the surface, your lives are different, your priorities are different and you care about different things.

Another HUGE mistake people make is saying to a new agent, “Just give me what I have now.” What's wrong with that? Everything.

First off, how do you know your previous agent didn't mess it up in the first place? You could be repeating a potentially devastating mistake and have no idea.

Secondly, when your current policy was written your life was different, no matter how long ago it was. Maybe you don't need as much protection as you needed then, and you could save some money.

Or you might need more protection now and not realize it. If you just repeat your old policy limits you could wind up paying a lawsuit out of your pocket.

Action Item: Cooperate with your new agent and review your current life circumstances to make sure you're properly protected now. A good insurance agent is going to give you all the time you need to understand the choices you're making. He's also going to have, or will get, answers to all your questions. And between your questions and his answers you should be 100% comfortable with the choices you've made.

Remember, nobody cares about you more than you. With a trustworthy agent and your personal responsibility for understanding your options, the two of you can make sure you're making the best decisions for you.

“Wake up and smell the coffee!” could be the sub-title for this section.

In case you haven't noticed, the price of cars is on the rise - $20K plus for a basic sedan, $30K plus for an SUV – and they're all over the road. And, in case you haven't noticed again, our nation is lawsuit crazed. That means one thing …

You better have policy limits that meet today's expensive and crazy world or you're going to end up paying a lot of money out of your pocket!

Let's talk about property damage coverage first. Property damage pays for other people's stuff you damage – cars, buildings, landscaping, etc. but not people. Regardless of how much damage you do, the insurance company will only pay up to your “coverage limit”.

So, look at your policy and see what your property damage limit is. Let's say it's $50,000, which is pretty common. How far do you think $50,000 will go these days?

Here's a better question. You're driving down the road tomorrow, get distracted and cause a multi-vehicle pile up. There's a Honda Accord, and two SUV's destroyed. The damage is easily $73,000. How much of that do you want your policy to pay?

All of it? With a $50,000 property damage limit, you're paying $23,000 out of your pocket!

Bottom line … these days you should strongly consider carrying at least $100,000 of property damage coverage. If you already have it, great. If not, talk to your agent. You can offset some of the increased cost with the money-saving tips in Secret # 6.

How about bodily injury coverage? “BI” pays when you're sued by other people you injure. Have you noticed there's a lot of that going around?

Here's a tough question … if one of your family members was paralyzed or killed by another negligent driver, how much would you sue for? A million dollars? Ten million? Everything you could get?

Don't you think others would do the same thing to you?!

And even if you honestly answered, “I wouldn't sue, I'm not that kind of person”, do you really think other people would give you the same consideration?

Take a look at your policy again. What are your limits for bodily injury coverage? Compare your limits to your answer. I strongly suggest you consider limits of at least $250,000 per person and $500,000 per incident, or $500,000 of combined single limit.

Action Item: I can't make this report an insurance study manual, so have your agent fully explain all that terminology until you're 100% confident in the limits you've chosen. You risk losing everything you have and everything you'll ever work for if you're underinsured in these areas.

Extra Special Action Item: One final word on protection limits … don't let some low-life with a TV lawyer take you for all you're worth and ruin your life! Get a personal catastrophe umbrella policy now.

What's that? An “umbrella” policy provides liability protection above and beyond your auto and home policies. Typical umbrellas provide one, two, five or ten million dollars of protection. And an umbrella is NOT expensive. You owe it to yourself and your family to check it out.

By now I hope you've gotten the message that the most important things are you and your family's safety and your long-term financial security. Insurance is all about protecting those things. The price of your insurance is a secondary consideration once you're confident you're properly protected.

However, that doesn't mean you should overpay! Here are 9 tips for saving money on your car insurance.

1) Buy a “lower profile” vehicle. Part of what determines the cost of insurance is the kind of car you own. If you're thinking of buying, have your current agent do a cost comparison for you. If they're not happy to do that for you, get another agent.

Also, before you buy stay safe and contact the Insurance Institute for Highway Safety, 1005 North Glebe Road , Arlington , VA 22201 and ask for the Highway Loss Data Chart. You can also find them on the Web at www.hwysafety.org.

2) Be a cautious and law-abiding driver. Bottom line … drivers with accidents and violations pay more … and they should. It's the small minority of drivers causing the accidents that make things worse for the rest of us. Save your money and save your life. Drive cautiously.

3) Improve your credit rating. Believe it or not many insurance companies – and the list is growing – are using your credit rating as part of their review and rating process (“underwriting”). Apparently, people with good credit ratings tend to have fewer claims, statistically speaking. So, if you want the lowest insurance rates possible, improve your credit record. You may save money!

Not all companies support the statistical relationship between good credit and low claims. But why not give yourself every chance?

4) Price your classic car, motorcycle, four-wheeler, snowmobile, etc. on its own specialty policy. If you have a “miscellaneous vehicle” on your auto policy, you may be able to save a few hundred dollars by putting that vehicle on its own policy. Have your agent quote it both ways and see which is best.

5) Refer to Secret # 1 and get all the discounts you deserve.

6) Raise your deductibles. The deductible is the amount you pay before your insurance kicks in. For example, if your deductible is $250, on a $1,000 claim you pay the first $250 and the insurance company pays the remaining $750.

Higher deductibles can significantly reduce the cost of your insurance. However, you'll be paying more out of pocket IF you have a claim. That's the risk you trade off with the lower cost of higher deductibles.

An important consideration is this … submitting claims can increase rates. So lots of people don't submit small, nuisance claims. What's “small” to you? If you're willing to eat a $500 loss to keep it off your record, it doesn't make any sense to carry a $250 deductible. Your paying for coverage you won't use, and that's expensive coverage. Have your agent run a comparison for different deductibles.

7) Drop your collision and/or comprehensive insurance on older vehicles. Sometimes it's just not worth paying for these kinds of insurance … if your car is not worth that much to begin with. That's because the amount you pay for the deductible plus the amount you pay for the premium may not be more than the value of the car itself.

A rule of thumb is that if a car is worth less than $1000, drop these coverages. But many people are comfortable with even higher figures. The disadvantage of this strategy is if your car is a total loss, you'll receive nothing from the insurance company. And when a car has very little value it is often cheaper for the insurance company to “total” the car rather than repair it.

An auto dealer can help you determine the value of your vehicle. You can also check out N.A.D.A. Appraisal Guides on the Web at www.nadaguides.com.

8) Consider dropping your medical coverage if you have health insurance. I guarantee your agent will fight you on this one, and with good reason. But if you fully understand your options and the consequences, you could knock some premium off your insurance bill.

In Indiana medical coverage pays for your medical bills in the event of an auto accident. If you have health insurance, too, you're paying for two policies that cover the same thing – medical bills.

HOWEVER … be advised, medical coverage and health insurance do NOT work exactly the same. Health insurance does NOT fully replace Medical coverage. But if you get a full explanation of the differences from your agent, you may decide that Medical Benefits are an unnecessary expense … for you.