Here are the top car insurance tips that first-time buyers can use to save money and gain peace of mind.

Know your state’s minimum car insurance requirements.

Most states mandate that drivers carry bodily injury and property damage liability insurance at a bare minimum. Every state has different required liability limits, so make sure you read up on them.

The minimum coverage required by your state, however, may not be enough to provide you adequate financial protection. For instance, you could still be on the hook for large sums of money if you cause an accident and you don’t have collision insurance to cover the repairs. A bare-bones policy might also not provide enough coverage to replace a new car that’s been totaled or pay for severe injuries suffered by other drivers and passengers injured in a crash.

Decide how much coverage you need

The amount of coverage you’ll need will vary based on your age, where you live, vehicle type, miles driven and credit score.

In addition to liability coverage, auto insurance policies also offer a variety of different coverage options as add-ons to the base coverage.

• Personal injury protection (PIP) covers you (and you passengers) if you sustain injuries in an auto accident. This can potentially cover funeral expenses and lost wages.
• Uninsured motorist coverage covers you for damages caused by an uninsured or underinsured This also covers you in the case of hit-and-run accidents. Some states require uninsured motorist coverage.
• Collision insurance covers you for damages to your car, truck or SUV sustained in a collision with another vehicle.
• Comprehensive insurance covers your car for all damages that are not related to a collision with another vehicle, such as hitting an animal, fire, theft, vandalism and falling objects.

Keep in mind that if you have a sizeable auto loan, you’ll likely be required to purchase enough collision and comprehensive insurance to cover the amount of the loan should you get into an accident.

By DREW HOUSMAN

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