When times are tight, one of the first things cut is auto insurance. While a reduction in coverage can save money at times, it’s important to make sure you’re not cutting back too much. If you have too little coverage, you may be under legal limits for your state, and you may be putting your other assets at risk, as well. So how much auto insurance coverage do you really need?

If you’re just starting out in life and have a beater of a car and nothing else to worry about, then minimum state coverage is fine for you. Most states have laws that mandate liability coverage, but some states also require coverage for medical expenses for you and others and pain and suffering. Some states will make you carry insurance to protect you in the case an underinsured or an uninsured motorist hits your car. You should know what exactly your state requires. Minimum requirements under state laws cover bare minimum accidents. If you have a serious accident and someone else is injured, minimum coverage may not be enough to protect you if the injured person’s attorney decides to recover loss via your other assets. When you have a family and home to care for, choose at least 100/300 limits on injury liability for adequate protection. 

Besides these types of coverage, there are many other add-ons for any policy. Collision coverage will cover damage to your vehicle if you collide with anything, such as a curb or a retaining wall. Comprehensive coverage will pay for repairs if something like a tree falls onto your vehicle or your car suffers damage from fire, floods, or theft. Before buying auto insurance, make sure your other insurance policies don’t cover some of what your new policy would. While cutting back to save a few bucks may seem like a great idea, consider what you’re giving up.