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While most every state requires that you buy a minimum amount of liability coverage, consider what you are paying for additional collision and comprehensive coverage, especially when you're driving an older vehicle.  With most policies, your coverage reflects the market value of your car and the cost of repairing it.

You may want to consider a liability-only policy, which can reduce your insurance costs by 50 percent or more, according to the National Association of Insurance Commissioners.  If you have a car loan on the vehicle, you typically can't carry liability-only coverage. 

Before you opt for a liability-only policy, make sure that you have a fair amount of money stashed away in case your car is in an accident because you'll be responsible for paying the repair bill.  If the car is totaled, you'll be the one paying for a replacement. 

To help you decide which coverage makes the most sense for you, consider what you are currently paying for collision and comprehensive protection annually.  If this amount is more than 10 percent of the car's value and if you have adequate cash reserves, then it may be best to drop your coverage to liability.  Here's an example:  your car is worth $5,000 and your insurance costs are more than $500. 

Talk to your insurance agent about the pros and cons of liability-only coverage and what type of insurance works best for you.