5. Buying state-required minimum coverage
While buying state-required minimum coverage can save you money in the short term, it can cost you more in the long run. In many states, the minimum coverage requirements are relatively low and might not fully cover the costs if you’re at fault in an accident.
For instance, if you cause an accident resulting in $50,000 worth of damage, but your policy only covers $25,000, you’ll be responsible for the remaining $25,000 out of pocket. Therefore, consider purchasing more than the minimum required coverage to protect yourself financially.
Additionally, remember that state-required minimum coverage typically only includes liability insurance. It doesn’t cover damage to your car from an accident, theft or other perils. For comprehensive protection, you might need to add collision and comprehensive coverage to your policy.