For the vast majority of drivers, they must find an auto insurance provider. Auto insurance solutions run the gamut, though, and many people end up carrying too little coverage or paying too much. How do you right-size your policy? These three tips will help you match your insurance coverage to your needs.

Understand the Terminology

You can't find the right policy if you're not clear on what you're paying for. Fortunately, you only need to understand a few key concepts.

The deductible is how much you have to pay out of pocket if an accident happens. A lower deductible means higher monthly premiums. Never carry a deductible that's less than what you're confident you can cover out-of-pocket at any moment.

Comp and collision are the two main auto insurance solutions. Comprehensive coverage addresses lots of things, including theft and weather-related damage. Collision only covers accidents involving other vehicles.

Liability is the level of what your insurance covers. Generally, you'll want at least $100,000 of coverage in case someone is hurt in an accident that you're found at fault for. Likewise, you might want coverage for injuries to your person or passengers, especially if you don't have medical insurance.

Matching Coverage

A lot of the decision-making process boils down to how valuable your car is to you. Not all cars are equal. There are shiny and expensive ones that deserve full coverage, and then there are beaters. Even if your car isn't high-value, you may need good coverage if you can't afford to replace it right now.

Similarly, there are many useful add-ons. For example, rental coverage is nice to have if you don't have a backup vehicle. The same goes for towing coverage, a policy item that often covers tows even if they're not accident-related.

Risk

Remember, insurance is about protecting yourself against risks you can't afford. Someone who has $10,000 in the bank they can use right away can probably go with a high deductible to get a lower rate. Conversely, someone who only has $200 probably needs a lower deductible to ensure they will not be asking other people for money to cover it.

Also, never assess your risk profile based on the past. You may be an excellent driver with an impeccable record. Life comes at you fast, and weird things happen. Assess your risk based on what you can't afford to lose if an accident occurs.