When shopping around for car insurance, it's common to want to get the rock-bottom cost. After all, it's all about reducing the premiums, right? Nobody wants to spend more than they want to whether they're in South Carolina or Wyoming.

Unfortunately, paying attention to only the premium amount without evaluating the coverage can actually be one of the biggest car insurance mistakes. It can cost you even more in the long run. If your only aim is price, you might miss discounts on a fuel efficient vehicle or a customer review that tells you a company doesn't handle claims well.

Before you jump at the idea of the cheapest car insurance just to save money, take a step back. Make sure you have the coverage you need.

What Kind of Car Insurance Mistakes Will Cost You?

While insurance rates can feel like a big expense, the reality is that insurance is about risk protection. In 2017, according to the Centers for Disease Control and Prevention, the cost of medical care and productivity loss related to car accidents amounted to more than $75 billion. This isn't a statistic you'd typically see in a news release. In fact, newspapers don't generally warn you about insurance companies that aren't above board.

What happens if you have the wrong car insurance coverage? What happens if you're trying to make a claim when you have the wrong auto insurance?

It could be devastating to your finances. Insurance is about reducing some of your risks, whether it's helping you replace your vehicle or making sure that your assets are protected if someone sues you after an accident.

What Kind of Mistakes Can You Avoid When Shopping for Affordable Auto Coverage?

Here are some car insurance mistakes to avoid as you consider your coverage.

1. Choosing Only Liability Coverage and Collision Coverage

Many people see an obvious difference when they choose only the state minimums. Liability coverage may cost you less now, but it could hit you hard later on. So what if you only choose collision coverage? You're only covered in accidents with other cars, or in the case where you're driving and the car hits something else. This may not seem that bad. But what happens if the tree you hit is by your house and it falls in a windstorm? Collision coverage won't help you. You'd be on your own unless you have comprehensive coverage. This is why many auto loan companies require both collision and comprehensive policies.

To save money on their monthly car insurance bill, people sometimes choose to forgo comprehensive coverage and only purchase collision coverage, but that could put you at risk financially. Comprehensive coverage might cost a bit more per month, but in the end, it covers more situations, including vandalism and theft. If your car is stolen, collision car insurance won't get you a new one. It could save you thousands.

Let's say your car is worth $15,000 and you have a loan balance of $6,000. With collision insurance, if a tree falls on your car, totaling it, you still have to pay off that loan and buy a new car. (Some lenders, though, require you to get comprehensive coverage, so you might not have a choice.) With comprehensive car insurance coverage, however, the insurance company might give you $15,000. You could pay off the loan and still have $9,000 left to buy a car or put make a hefty down payment.

Comprehensive coverage may not be needed for every car. However, it's important to consider it, especially if the cost of replacing your car would be a hardship to you.

2. Sticking with liability coverage only

Maybe you don’t even have collision insurance. Perhaps you only purchased liability car insurance coverage to save money. Most states require liability insurance, so you most likely don't have a choice in whether or not to buy it. However, some people try to save money on car insurance by not getting collision and comprehensive coverage and only having the required liability insurance.

While this can take care of your state-imposed obligation, the reality is that it doesn't account for damage to your car. For old cars that are on their last legs, getting more than liability coverage might not make sense. However, if your car is worth several thousand dollars, you might not be able to easily repair or replace it out of your own pocket. Keep in mind, this doesn't cover injuries. So even if your old car isn't worth much, your medical bills could pile up quickly.

Nearly 40 percent of American adults would need to turn to debt in order to cover an unexpected expense of $400, according to the Federal Reserve. This means that they don't have an emergency fund waiting in the event of such an unexpected car expense.

Without collision coverage, you could end up going into debt if you needed car repairs of several hundred dollars. The situation might be even more financially devastating if you have to try to replace your car altogether.

3. Getting too little liability car insurance coverage

Even if you decide on collision or comprehensive, you might still be making one of the dire car insurance mistakes if you don't increase your liability limit. Many states mandate a lower limit for liability insurance, and you might just decide to go with that amount to save money. These are generally meant to cover minor accidents.

What if you have $50,000 in bodily injury liability coverage, but you're in a car accident that results in permanent disability?

The injured party might be awarded much more in damages. Your insurer will cover the first $50,000, but can you afford it if you're found liable for $200,000? It's possible your wages could be garnished to cover the shortfall.

Some states have bodily injury requirements as low as $25,000. If you only get the minimum, you could be setting yourself up for bigger problems later, even if you save money on car insurance premiums today.

How to shop for car insurance that makes sense

As you shop for car insurance, realize it's not just about the insurance rates and your ability to save money. Instead, you need to assess your needs ahead of time and make sure your car insurance coverage meets those needs and protects you at a level that makes sense.

• Consider the value of your car: First, consider your car's value. How much do you still owe on it? If it's paid off, how easy would it be to replace it with the funds that you have available to you?
• Review liability coverage: While you might not feel it's necessary to get the largest amount of coverage, carefully consider whether you're truly comfortable with the minimum. This can help you save on your car insurance rates.
• Know your deductible: A higher deductible can save you money on car insurance rates, but it also means you pay more out of pocket on claims. Look at your emergency fund and be realistic about the type of deductible you can afford.
• Ask for discounts: Lower coverage isn't the only way to save money on your car insurance rates. Ask about discounts for good grades, lower mileage, safety features, having multiple cars or policies, going a certain amount of time without a claim, and membership in certain organizations. You might be surprised at the car insurance discounts available.
• Compare quotes: The key to shopping for car insurance effectively is comparing quotes to get the best rates. Consider using an online insurance marketplace to evaluate multiple quotes at the same time and consider shopping around with local agents. Ask them to meet or beat the online quotes that you receive. A common mistake is to accept the first quote received, rather than comparing quotes and coverage to save money. Be sure to read car insurance company reviews on Clearsurance.com before buying a policy from any company. You want to make sure the company is highly rated by consumers and is reliable.

Don't assume that the lowest insurance rates are the best choice for you. Even if you end up paying a little more in premiums each month, you can come out ahead in the long run, if you end up in a situation where the insurance comes in handy and saves you from even bigger costs.

Learn how to shop for car insurance by starting with your needs and your situation, and you'll also have peace of mind… which is priceless.

Start shopping for car insurance by visiting Clearsurance’s car insurance rankings page. Here you can find a list of companies that consumers say are the best in your area, including which ones are the best for price and reliability.

The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.