Not necessarily. Some car insurance ads do make it look like choosing auto insurance is all about getting the best bargain. However, Allstate agency owner Andrew McCabe of Milwaukee, Wisconsin, knows there’s more to putting together the right car insurance policy than just price.

“I work in a college town, so we have many students and young professionals who are tight on money,” he says. “I do a lot of explaining about how to first choose car insurance that won’t leave you at financial risk if something happens. Second, we talk about ways to bring your insurance costs down, if possible.”

McCabe explains that several different factors may affect your car insurance premium. For instance, the coverage you choose, your policy’s limits, and your deductibles may affect the cost of your policy. However, what you pay for car insurance may also depend on your driving history, your age, the number of drivers on your policy, and more.
McCabe notes that many price-conscious folks focus on the first group of items — coverage, limits, and deductibles. That’s partly because those are the simplest elements to add, subtract and change when you’re doing an online insurance price comparison.
But simply adjusting coverage, limits and deductibles may be the riskiest place to try to cut corners on insurance, says McCabe. Here’s why:
1. You could put your assets and future earnings at risk.
Almost every state requires drivers to carry liability coverage. Each state sets minimum limits for that coverage. However, these are really “bare-bones” amounts of insurance that may not fully protect you financially in a serious accident, says McCabe.
“Say you have your state’s minimum of $25,000 per person of bodily injury liability insurance,” McCabe says. “That may seem like a lot of money, but it’s not if the other driver is seriously hurt and you’re found legally liable.”
If the other driver’s medical bills run $40,000, your insurance may pay up to $25,000 and you’d be responsible for the rest.
A court could order the additional $15,000 to be taken from your savings, a wage garnishment, or the sale of other assets, explains McCabe.
“For maybe an extra $25 a month, depending on your policy, you might have been able to increase your liability limits to three times as much as the state’s minimum limit,” he says. “After an accident, that will look like a bargain compared to an inexpensive insurance.”
2. A cheap car could cause expensive damage.
Even a $1,000 beater car still needs a reasonable amount of liability coverage, McCabe says. Why? You could cause an accident that damages another, more expensive car or seriously injure another driver or pedestrian. Your best bet is not to cut corners on your auto policy’s liability coverage, he says.
If you own your car (no loan or lease), McCabe says you typically have the option of dropping collision and comprehensive coverages to help lower your premiums.
“Cutting collision could make sense if your car isn’t worth much. You might pay more in premiums than your insurer would actually payout if you filed a claim,” he says.
However, McCabe advises thinking carefully about dropping comprehensive coverage just to save a few bucks. If your car is stolen or vandalized, for example, without comprehensive coverage you’ll likely have to pay out of pocket to replace or repair it.
“This coverage is pretty inexpensive and can be worth it,” he says.
3. Dropping uninsured motorist coverage can be risky.
If someone with no insurance or who only has the state minimums significantly damages your car or injures you, you could be left with major expenses, McCabe explains. Uninsured and underinsured motorist coverage may help protect you in these situations; however, it’s an optional coverage in some states.
Before you opt-out of this type of coverage, consider this:
“People who skimp on car insurance may have other financial challenges that make it difficult for them to pay for your medical bills and other losses — even if a court finds them responsible,” McCabe says.
An experienced agent can help you choose the amount of car insurance coverage that’s right for you. Then he or she can look for ways to help cut your premium costs.
“A good agent can usually reduce your costs more significantly with discounts than by suggesting you cut your coverage,” notes McCabe.