Every driver knows that having car insurance is essential. It’s illegal to drive without it. But, maintains budget guru Kristen Cox, the savviest drivers know how to shave the cost without sacrificing quality coverage.

“Pick your coverage first, and then your cost,” Cox said. “Companies that throw around the cheapest rates may be offering a bare bones policy that won’t help you when you need it most.”

Cox recommends comparing rates through a reputable local broker or large agency, keeping in mind the following options:

• Liability or full coverage – Liability insurance, the cheapest alternative, will cover the driver and any property you hit, but won’t repair your damaged car. If your car is very old, has ultra-high mileage, or is paid for and you can afford to replace it, this may be all the coverage you need. Otherwise, you will need full coverage – and there are two types; collision and comprehensive. Collision coverage will cover repairs to your car if you hit someone or something—like another vehicle or a tree. Comprehensive coverage will cover you no matter what, which means you’re also insured if something hits you, like a tree limb or flying debris.

• Liability limits – When you compare quotes, check that they all the same liability limits – that is the maximum amount your insurance will pay out in damages. First, find out from your local DMV what the minimum liability limits are for your state. Then, even if they are lower than $100K for bodily injury per person and $100K for property damage, consider these amounts as the minimum limits on your policy. Choosing a limit that’s too low can leave you vulnerable to lawsuits if you’re at fault in an accident.

• Deductibles – Your deductible is the flat amount you pay if you get into an accident (or file a claim for any reason such as having your car hit by a deer). It’s the amount you must pay before your insurance kicks in. Having a high deductible will lower your premiums, but be careful not to raise it too high if you don’t have an emergency fund. Most people are comfortable with a $500 deductible, but you can have one as low as $0 or $100 depending on the carrier and what you can afford.

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