If you haven't comparison-shopped for auto insurance lately, do it now. Do it even if you shopped as recently as a year ago. Price wars are raging in many states and at many companies, especially for drivers with clean records.

In 1998, the average cost of auto insurance dropped 2.8 percent--the first decline since 1973, according to the Insurance Information Institute (III) in New York. This year, average rates are expected to drop another 4.5 percent. For good drivers, prices might drop as much as 10 percent, says the III's chief economist, Robert Hartwig.

High-risk drivers have seen rate cuts, too, although not as big. At Geico, good drivers paid an average of 3.6 percent less last year, while poor drivers paid 1.9 percent less, said Senior Vice President William Roberts.

At mutual insurance companies such as State Farm, the insurer may return part of your premiums in the form of a dividend.

Why are insurance premiums down? Cars have gotten safer, especially with the addition of air bags. About 70 percent of drivers and passengers now use seat belts. More children ride in safety seats. Auto theft is down. Medical and repair costs are rising more slowly. Insurers are working harder to fight fraud.

Demographically, there's a dip in the number of teenagers on the road and a bulge in the number of middle-aged drivers. Middle-aged drivers have fewer accidents than the young.

States helped bring insurance claims down by passing tougher drunk-driving laws. In 1980, 51 percent of the drivers who died in accidents had a high concentration of alcohol in their blood. In 1997, only 30 percent did. People of all ages are drinking less before they get behind the wheel.

How has the average driver responded to lower rates? Not by pocketing the savings. Instead, people are buying more new cars and cars that are costlier to insure. Average spending on auto insurance rose a bit last year, even though rates dropped.

Insurance costs more for a new car, a more expensive car, or a car more likely to mangle other vehicles on the road, Hartwig says. When you buy a new car, you also take collision insurance, which you might have dropped on an older car.

Nearly half the new cars purchased in 1998 were minivans, sport-utility vehicles and light trucks, reports Ward's AutoInfoBank in Southfield, Mich.

With a typical policy from Geico, a Fairfax resident who sells a '91 Ford Escort and buys a '99 Ford Explorer will pay about $924 a year. That's $132 more to insure his new SUV.

In White Plains, N.Y. (a state where insurance is more expensive), a man who switches from a '94 Ford Taurus to a '99 Jeep Grand Cherokee would pay $2,101, using Travelers Insurance. That's $910 more.

But no matter how old or how large your car, you might well find a lower-cost policy than you have today. Customers tend to think that the cost of insurance doesn't vary much from company to company. In fact, the variations can be large.

Progressive Insurance in Mayfield Village, Ohio, recently compared the rates of four leading insurers for nearly 700,000 drivers in 46 states and the District of Columbia.

On average, it found a difference of $481 between the lowest and highest six-month rate for identical policies. The variations were widest in Kentucky and Texas and narrowest in New York and Vermont. The range would have been even wider if all the insurers were included.

No single insurer offers every driver the lowest rate. Some are better for different kinds of risks. Drivers who pose the lowest risks are classified as "preferred" or "super-preferred." After a couple of accidents or driving violations, however, you might be kicked down to "nonstandard," where coverage can cost 30 percent to 60 percent more. Below that lies "substandard," where drivers drop into high-risk pools.

But your risk level isn't fixed. One insurer might give you a better classification than another one does, hence a lower price.

Thanks to the stiff competition today, many drivers near the top of the nonstandard or substandard categories are being moved up in class. So no one should be a policy zombie, even drivers in high-risk pools. Raise your head and take a look around.