"Shift the money around to the things that could wipe you out," says Jack Hungelmann, an agent/consultant with Corporate 4 Insurance Agency of Edina, Minn., and author of Insurance for Dummies.
While most people could cover a $500 deductible, a $500,000 lawsuit would be a different matter. So why do so many consumers pay extra for low deductibles and carry close to the minimum on liability coverage?
Instead, Hungelmann says, raise your deductible (and bank that amount for emergencies) and increase your liability coverage. Your premiums should remain roughly the same
Hungelmann's rule of thumb in a society where critical care bills can easily cost six digits: "Nobody should carry less than $500,000 per person," he says.
The good news: Taking your total liability coverage from the standard $300,000 to $500,000 will only cost about $60 a year for two cars or $60 for one car if you're a younger driver.
"But younger people who have a fairly low net worth don't need hundreds of thousands in liability coverage," says Bill Feldhaus, associate professor of risk management and insurance at Georgia State University.
Best bet: Talk to a professional you trust and come to a decision on deductibles and liability coverage that works for you.
"You always want to look at the trade-offs -- what do I save in premiums vs. how much risk do I take on?" Feldhaus says.
Another place to shave some money from the premium, says Hungelmann: personal injury protection, also known as medical payments coverage. If you already have health insurance for yourself and your family, that would cover your medical bills after an accident, he says. Why pay twice?
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