A common mistake people make when purchasing car insurance is choosing a cheaper plan – one that requires a lower premium, the regular amount you pay for the insurance – than a slightly more expensive one. This short-term outlook can cost you dearly in the long-run.

Even minor car accidents can put you and your family in a sticky situation. There’s no telling what injuries can happen because of a collision, and if you have the bare minimum amount of insurance, it’s likely you’ll have to pay out-of-pocket for medical bills and damages.

“Purchasing the minimum insurance policy required by law is essentially a trap,” says attorney Chris Davis of the Seattle-based Davis Law Group. “If you do opt to go cheap, you’re setting yourself up for trouble in the event of an accident.”

A cheaper insurance premium provides you less coverage in the event of an accident. The more coverage you want, the higher the premium you pay. If you want a low deductible – the amount of money you must pay toward repairs before your insurance covers the rest – you will be paying a higher car insurance premium. If you opt for full coverage instead of basic liability, you will pay a higher premium.

The amount of coverage you must have to legally drive is different in each state. A state’s geography comes into play – urban areas have more accidents and more uninsured drivers, for example – so the risk to the auto insurer is higher in those places. That drives insurance premiums up. Other factors such as driving record, age, and a vehicle’s age can also impact your premium.

Mr. Davis recommends drivers purchase as much insurance as their budget allows. If you are at-fault in a minor accident or are involved in a collision with a driver that is uninsured, your savings accounts and retirement funds may be wiped out as a result. If you find yourself involved in an accident on your bike, it may be in your best interest to consult with a bicycle accident lawyer.

Helpful Tips When Purchasing Car Insurance

Nobody wants to spend more money than they must. That applies to car insurance as well, and you likely aren’t expecting to be involved in a car accident.

Here’s a few things to keep in mind when buying car insurance:

  • Purchase higher liability limits: A driver can have an insurance policy that meets their state’s minimum legal requirements, but will subject them to major financial difficulties if they are in an accident. If possible, buy as much liability insurance as you can afford. It will save you in the event of an accident.
  • Buy underinsured/underinsured motorist coverage: It’s possible that your state does not require this type of coverage, which is a floating layer of protection in the event you are injured by a driver without insurance or not enough to cover the damages. Some states require the provider to offer this insurance, and a driver must decline it in writing. Dollar for dollar, this is the best deal money can buy.
  • Buy personal injury protection insurance: This pays for your reasonable and necessary medical expenses, regardless of who is at fault for the collision. Like underinsured coverage, most states require insurance companies to offer this to you.