Insurance is betting you never have a bad day. The industry is based on calculated risk management. A lot of mathematics, science, and guts go into the algorithms that determine risk. You may think that they are just out to make money off you, and you are right. Surprisingly though, they make the most money when they have loyal customers who come back year after year, and who trust them to take care of you when something goes wrong. Insurance companies would not be making money if all their profits had to be spent on chasing for new customers.
The economy is very tight right now for everyone. Many people are looking to save money anywhere they can, and cut corners wherever possible. Sometimes, you might be inclined to go with whatever the state has deemed as the minimum liability insurance. Before you do, think about what that insurance is supposed to cover, and what you have to fill in the gaps is you do have an accident.
Things to consider when choosing the level of liability insurance are your own personal assets. No one in their right mind heads out on the highway looking to create an accident, but if you are in an accident, and you are at fault it can cost you over and above what your insurance is going to pay out. You may risk having to pay out any differences if you either have assets or you own properties that are in excess of what your policy covers.
Basic coverage n New Jersey is: bodily injury $10,000 for all persons, and $5000 for property damage. If you're at fault and the accident totals the other person's car valued at $15,000 and their medical bills pile up over $10,000 (and they do not have coverage for underinsured driver) you will need to find some way to pay the bill. The accident victim's attorney will put a lien against assets, like your house or bank accounts. Saving a few dollars, a year on your auto insurance is not a smart reason to be left living in your car. When comparing auto insurance quotes make sure you are looking at liability levels that match you level of assets. If your home is worth $250,000 and your other combines assets put you over $300,000 then $300,00 is the minimum you should be carrying. Knowing what is at risk for you can help you make the best decision on your coverage.