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When it comes to insurance, most people recognize the importance of having at least some types of insurance—like health, car, and homeowner’s insurance. But often, in an effort to save money, it can be easy to go underinsured. The result? Higher risk. This article will go into three reasons why families go underinsured and why it’s not the best idea.

Insurance is a Big Expense

Insurance is a big expense, and there are many policies that can add up. But carrying appropriate amounts of insurance can pay off. In terms of car insurance, it can be easy to ask yourself if it’s really worth paying more each month for the more expensive coverage.

It may have been worth it to pay for cheaper car insurance when you were a college student driving a really old car. But with your kids in the back seats, paying a little more each month for car insurance could save you big in the case of an accident that causes major damage to your car or that results in injury.

They Underestimate the Risks

People can also go underinsured because they underestimate the risks or their liability in a situation. Particularly, families often underestimate the risks that they take when they do not have adequate homeowner’s insurance, or when they are renting. Common causes of home damage including floods and fires can result in extremely expensive repair costs for you if you don’t have adequate insurance—whether a homeowner or a renter.

When it comes to finding adequate renters insurance, people can be deterred by policies that don’t seem to protect the renter’s interests as much as they would like. But in reality, a renters insurance policy can cover various expenses besides lost possessions. Having good renters insurance could save you a lot of money in the case of major damage.

They are Unaware of Available Resources

Shopping for insurance, no matter what kind, can seem like a complicated process. Often, when you don’t want to spend a lot of money and when there are so many policies to consider, it can be easy to forget to look at other resources as well. Before you commit to a policy, or if you are genuinely concerned that you won’t be able to afford adequate coverage, do your research—there are resources out there.

With so many types of insurance including car and home insurance as well as life and health insurance, it can be easy to get lost in the details. But, going underinsured can be risky so it’s important to take time to do your research and ensure that the policy you are considering will provide you with enough coverage.

For more money-saving tips, read this next: What You Should Do if You Can’t Pay Your Bills Because of a Job Loss