Maryland residents, be careful: a bad economy can lead to a bad decision to lower automobile insurance coverage limits.

Last week, I read a newspaper article that confirmed a suspicion: Nationwide, people are buying less automobile insurance coverage in order to save a few dollars in insurance premiums. My advice: Be careful before reducing your automobile insurance coverage. Here’s why:

First, step back and think about why you buy automobile insurance coverage (in addition to being required at minimum coverage levels in Maryland, and Washington, D.C., and most other states). Your liability insurance coverage protects your assets which include your home, belongings and wages in the event that you cause an accident that injures someone else. If you buy $20,000.00 of automobile insurance liability coverage, but you have $35,000.00 in assets to protect, then you are exposing some of your assets in the event that a judgment is entered against you in an amount exceeding your $20,000.00 policy limit.

Another way you protect your assets is by purchasing adequate uninsured or underinsured motorists’ coverage (UM/UIM). If another driver strikes your vehicle and injures you, and if the other vehicle has no insurance, or not enough insurance, then you need to look back to your own automobile insurance policy coverage to protect you against losses. If you buy minimal UM/UIM coverage, then you place yourself at financial risk that you will be injured by a negligent driver who carries little or no automobile insurance.

In Maryland, another type of coverage, personal injury protection coverage (PIP), is available in amounts of $2,500.00, $5,000.00, $7,500.00 and $10,000.00. PIP coverage can also be waived. PIP coverage is used when you are in an automobile accident, even if the accident is your fault, to cover medical bills and 85% of your lost wages. Because lost wages and medical bills can be significant, this can be very helpful coverage to obtain, and typically the coverage is not that expensive.

The car accident injury attorneys at Lebowitz & Mzhen Personal Injury Lawyers suggest that you shop around in an effort to save money on insurance coverage, as opposed to lower the level of protection you buy.