With four cars--two driven by their sons--and a recently renovated 1852 farmhouse, Jim Matteson, 53, and Diane, 50, of Madison, Conn., are used to steep insurance bills. We found them big savings on their auto insurance, plus ways to trim their life insurance premiums.

AUTO INSURANCE. Here's a number to make any parent scream: $4,071. That's the size of the Mattesons' annual autoinsurance bill now that 17-year-old Todd (pictured above) has his license, and 22-year-old Matt has a car at college.

The premium the Mattesons are paying to USAA (coverage is generally restricted to present and former U.S. military officers and their families) is $1,000 cheaper than most companies we checked. But Liberty Mutual would charge only $3,746 for the same level of coverage. The Mattesons could save another $275 by dropping collision and comprehensive on their sons' 1986 and 1987 Peugeots, which are worth a little more than $1,000 each. They'd save another $173 by raising the collision deductible to $500 on the cars they drive--a 1984 Mercedes 300 and a 1996 Nissan Maxima. Savings: $773 per year. LIFE INSURANCE. Jim currently has $130,000 in group life insurance coverage through work and a $250,000, 15-year level-term policy, with a term that will end when he's 61. Diane has a $25,000 whole-life policy.

With term prices so low and Jim's health still good, he can save money by buying a new policy that will cover him for a longer term. He could buy a new 15-year level-term policy from Old Republic for $645 a year--$101 less than he's paying now--and lock in level premiums until age 68. By that time, he will have retired and paid off the bulk of his mortgage. If the Mattesons need insurance for estate planning, Jim can convert to a cash-value policy within the first ten years.

The Mattesons could save another $51 per year by dropping Diane's $25,000 whole-life policy. Jim probably won't need the death benefit to cover the bills, says John Ryan, a Denver financial planner. Savings: $ 152 per year.

HOMEOWNERS INSURANCE. The Mattesons currently pay $733 to USAA to cover their 150-year-old farmhouse. They could save by switching to a Chubb policy, and they'd get better coverage for the old house, says David Homer, an independent agent in New Haven, Conn. Chubb's reconstruction-cost coverage takes into account materials, design and workmanship--key elements in restored homes--and will pay the full reconstruction cost even if it's greater than the policy's coverage limits. Chubb also covers any extra expenses to rebuild the house according to new building codes and provides higher limits on personal property. The Mattesons would have to raise their deductible from $250 to $500. Savings: $32.

REDIRECTING THE SAVINGS. Jim currently has group disability insurance through work, which covers 60% of his base salary but not bonuses (more than one-third of Jim's pay). The benefits would also be taxed because his employer paid the premiums. Jim should take some of their savings to buy an individual disability policy to fill the gap. Ryan recommends a Guardian own-occupation policy that would pay $3,300 per month until age 65, after a 90-day waiting period. The policy would cost about $2,700 per year, and the benefits would not be taxable. Or Jim could buy Provident's income-replacement policy, which costs only $1,447 per year for $2,13 5-per- month coverage.

The Mattesons could lock in a low long-term-care premium by buying a policy now, but they'd probably pay for years before receiving any benefits. They should wait until Jim is 60 to get a policy.

You can trim your homeowners insurance premium if you take advantage of discounts you company offers and raise your deductibles--nickel-and-diming the insurance company with small claims will likely win you a premium hike anyway.

HOW TO GET A GOOD DEAL. The trickiest thing about homeowners insurance is knowing how much coverage to get. The market value of your house and land is irrelevant. Instead, your dwelling coverage should be based on the cost of replacing your house. Each company uses a different formula for figuring replacement costs, considering square footage and local construction costs.

You'll get the most accurate quote if an agent inspects your house and notes the quality of the materials--it costs much more to replace custom woodwork than it does to replace pressed wood. "It can vary from $125 per square foot to $300 depending on what's in there," says John Morey, an independent agent in San Jose, Cal.

You don't want to worry that local building costs are increasing faster than your policy value, so you're better off buying guaranteed-replacement coverage if you can, which states a value for your home but raises your coverage to meet today's construction costs.

Ask for a list of discounts. State Farm, for example, offers a 15% discount if you install deadbolt locks, smoke detectors, fire extinguishers and a fire alarm that goes directly to the station. In some states you may get a 5% to 15% discount for having your home and auto insurance with the same company.

Because homeowners claims are some of the most complex to settle, a company's reputation for service is crucial. Get recommendations from friends, and see if your state insurance department has any disciplinary information about the company.

HOW MUCH YOU NEED. You'll need to insure your home for 100% of its value before you can get guaranteed--replacement coverage. Some companies now cap replacement coverage--State Farm limits payouts to 120% of the policy value--and more companies plan to impose caps. With those policies, it's essential to keep coverage levels up to date by including an inflation-adjustment provision (which raises your coverage--and premium--to keep up with local construction costs) and to notify your company when you make home improvements.

Homeowners policies typically cover personal possessions for 50% to 70% of the amount of your dwelling coverage and set some price limits on specific items--such as $5,000 for jewelry and $5,000 for silverware with CNA's Deluxe policy. Make an inventory of your possessions and set a value to make sure they're adequately covered.

If you want to increase the coverage, you can either buy a souped-up policy with higher limits on everything (CNA's Elite policy, for example, limits jewelry and silverware to $10,000 each) or buy a rider that increases coverage in only one category, such as jewelry or computers. Make sure the policy covers the construction materials and your possessions at their replacement value--today's cost to replace them--rather than their depreciated value.

Then, determine how much liability protection you need, which covers property damage and injuries to people who don't live in your home. Agents typically recommend $300,000--higher if you have more assets to protect. If you frequently have visitors or workers in your home, consider buying an umbrella policy, which can add a layer of protection beyond your liability limits on both auto and homeowners insurance. A $1-million umbrella policy, for example, usually costs $200 to $300 per year.

The minimum medical-payments coverage is usually $1,000 per person, which may help you avoid hassles because it pays medical bills--up to your limit--regardless of who's to blame. It costs only about $12 to raise your medical-payments coverage from $1,000 to $5,000, says Jeanne Salvatore of the Insurance Information Institute.

Finally, select your deductible. As with auto insurance, raising the deductible can lower the cost and make you think twice about submitting small claims that could raise your premiums. Raising your deductible from $250 to $500 typically saves 12% a year, says Salvatore. Raising it to $1,000 saves 24%.

WHERE TO SHOP. Contact an independent agent who is well acquainted with local construction costs and can compare several companies' definitions of replacement value. Pick one who comes to your house to inspect it; you'll get a more reliable replacement estimate. Also shop companies that sell through their own agents, such as State Farm, and some that sell directly. If you're not sure you're getting an accurate estimate, you could pay a contractor to give you one.

Agents often recommend Chubb for historic homes and ones with high-quality interiors. State Farm rewards long-term policyholders with among the most competitive rates. Nationwide and Liberty Mutual also offer good deals.

Chances are you don't need life insurance if no one would suffer financially if you died. If your kids are grown and your estate won't be subject to taxes after you and your spouse die--that is, if you expect it to be worth less than $625,000 this year (a ceiling that will rise to $1 million in 2006)--you could divert the premiums to retirement savings or long-term-care coverage.