Purchasing car insurance may sound intimidating, but it’s often not difficult. With just a few pieces of information, you can sign up for a new policy within an hour. However, while you can technically do it in a single sitting, it may be worth your while to shop around. Car insurance companies can vary greatly from one to the next, so you may be able to save a significant amount of money by comparing quotes from multiple companies.
How to get car insurance
Getting car insurance on a car can be done in a few simple steps, and you may even be able to decide which company you want to work with in a single sitting. Once you’ve done your homework and understand the process, you’ll be able to shop around, compare policies and decide on what works best for you with ease.
Step 1: Calculate how far you drive each day
If you’re in the car for a fair amount of time every day — for example, driving to and from work — use a navigation app to determine how many miles you’re driving every day. Next, use this information to estimate how many miles you drive each year. (Reminder: There are 260 work days in a year.) A potential provider will want this information so they can recommend the best plan for you.
Step 2: Pull together your information
The next step simply involves getting all of your paperwork together. You’ll need the following information when shopping for car insurance:
- Vehicle Identification Number (VIN)
- Current odometer
- Make and model of car
- Driver’s license number
- Personal information:
- Full legal name
- Social Security Number (SSN)
- Date of birth
- Address
- Employer
- Driving history
If you can’t remember your driving history, you may be able to request a copy online from your state’s department of motor vehicles. In Virginia, for example, there is a $9 fee ($8 online) to get your driving record.
Step 3: Understand coverage types and your state’s minimum insurance requirements
While the insurance company will know what type of coverage you need based on where you live, it’s important that you know as well — even if you’re just learning how to get auto insurance.
While each state’s requirements vary, common coverage types that may be required in your state include:
- Liability: If you are at fault in an accident, liability covers costs associated with injuries and property damage up to your specified limit.
- Collision: Regardless of who is at fault in an accident, collision covers expenses related to repairs or replacement when you are in an accident with another car or object.
- Comprehensive: Comprehensive protects your car if it is damaged by something other than a collision, such as theft or a natural disaster.
- Medical payments (MedPay): Covers any medical expenses needed after a car accident for both you and your passengers regardless of fault.
- Personal injury protection (PIP): Similar to medical payments, PIP pays medical expenses, but also covers any lost wages due to an accident.
- Uninsured and underinsured motorist protection: Pays for medical expenses and property damage when you are in an accident with an at-fault driver who either has zero coverage or very little coverage to meet your needs. It may also apply to hit-and-run incidents.
When looking at your state’s minimum requirements, you may only see three numbers, each of which represent the minimum needed for coverage. For example, Ohio is a $25,000/$50,000/$25,000 state. This means that in Ohio, your auto insurance policy must cover:
- $25,000 per person per accident for bodily injuries
- $50,000 per accident for bodily injuries
- $25,000 per accident for property damage
If you are at fault and the costs exceed the above amounts, you would be liable to cover any remaining costs out of pocket.
Step 4: Shop around
Once you know how much coverage you’re required to have in your state comes finding a rate that works for you. There are a few ways to rate shop for car insurance. You can apply directly with the company, work with an insurance agent or work with an insurance broker. If you work with an insurance agent, that person will only represent one company. An insurance broker, on the other hand, should have a handful of companies they work with. If you choose to work with an agent or broker, just know that you may have to pay a fee, which may increase the cost of your premium. Broker fees can vary by state and should be clearly disclosed.
Another option is an online comparison platform, such as The Zebra and Everquote . You can submit your information once and receive multiple quotes to compare all your options at once.
How many companies should you compare? There’s no set number, but we suggest a minimum of three so you get a sense of high, low and mid-range options.
Step 5: Compare discounts
Although one company may appear to be more expensive than another, it may not be the case once you factor in any discounts. Discounts can vary between insurers, but you’ll often find them if you already have a policy with the company (homeowners insurance, for example) or you enroll in the insurer’s usage-based insurance program, which provides discounts for safe driving.
For example, if you’re already purchasing homeowners insurance or rental insurance, check to see if that company also offers car insurance. If it does, you may receive a bundling discount. Bundling discounts might help you save a significant amount of money by using one company for multiple insurance policies or using a broker who can find the best bundling discount for you.
Step 6: Purchase the new policy
When you’ve found the best policy that covers everything you need and comes in at a price point that works for your budget, you’ll need to sign a few documents and provide payment information. Many providers offer a discount if you pay for a full year (or even just six months) in advance, rather than paying on a monthly basis.
Step 7: Cancel your old policy
Purchasing a new car insurance policy does not automatically cancel your old policy. Therefore, before you consider the job done, make sure you communicate with your old provider about when you want your policy to terminate. If you don’t, you might end up paying premiums for both policies.
How much car insurance do I need to buy?
How much car insurance you need depends on your state’s minimum insurance requirements. In addition, consider what you would need to feel properly insured. Depending on your state, household and personal driving history, you may want to consider purchasing additional coverage. When rate shopping, make sure to get quotes for each type of policy you’re considering.
Where can I buy car insurance?
You can purchase car insurance directly through an insurance provider, but you can also purchase a policy through an insurance agent or broker. Another option is to use an online marketplace and compare multiple insurers in one spot. Using a broker offers the advantage of having someone find a policy for you that matches your exact needs.
What to look for when buying car insurance
It may be tempting to save money and cut costs by getting the minimum amount of insurance coverage required. But, insurance experts warn against this strategy.
“Save money by bundling policies and using telematics, not by jettisoning crucial coverage,” said Ben Guttman, insurance advisor at North Central Insurance Agency, Inc. While the monthly premium for full coverage may seem too expensive at first, it will likely be worth the extra protection if you ever get into a bad accident.
What is telematics?
Some providers offer drivers the chance to lower their monthly premium by agreeing to use a driver surveillance app. The app sends the insurer information about the account holder’s driving habits, such as mileage, speed and driving frequency. If the company sees data that suggests the account holder is driving responsibly, they may offer a monthly discount.
However, one thing to consider is that the opposite could happen, too. After reviewing your data, your premium could go up if you drive more miles than what’s listed on your policy.
How often should you review and update your car insurance policy?
Guttman recommends an annual review of your car insurance coverage and pricing. “But you don’t necessarily need to change every year,” Guttman said. “Carriers can see if you switch every few months and it is not viewed as an ideal account.”
So that you’re not seen as flighty, consider marking your calendar and reviewing your car insurance needs once a year. When rate shopping, remember to try bundling your policies together for maximum savings.
Frequently asked questions (FAQs)
To purchase car insurance, you will generally need the following:
- Driver’s license
- Vehicle Identification Number
- Make, model and year of car
- Social Security Number
- Previous insurance information, if applicable
- Vehicle registration
- Driving infractions from the past three to five years
- Bank or credit card information
Many factors can influence the cost of your car insurance premium. Here are some of the most common variables insurers review:
- Age
- Gender
- Driving history
- Credit information
- Where you live
- Insurance provider
- Coverage type/limit
- Daily/yearly miles driven
- Deductible
- Discounts
One important thing to keep in mind is that, while providers look at a combination of the above variables, each one may place a different amount of importance on each factor. This is one of the reasons why it’s always important to shop around, as you may receive a better rate with one company than you will with another.
Liability, collision and comprehensive are some of the more common policies, but you can also purchase medical payments (MedPay), personal injury protection (PIP) and uninsured/underinsured motorist protection.
Your provider will guarantee that your policy fulfills your state’s minimum insurance requirements, but you should assess your personal risk tolerance because you may feel you need more coverage than your state requires.
Yes, you will want to have a new policy in place before buying a new car. Should you get into an accident on the way home, a new policy will not cover you after the fact. Another thing to consider is that if you drive your new car without any insurance, some insurers will consider this a lapse in coverage, which may increase the cost of your monthly premiums moving forward. However, in certain situations, some insurers provide a grace period of up to 30 days in which your new car is covered even though you haven’t added it to your policy, according to Progressive.
I'm a seasoned insurance professional with extensive expertise in the field, having worked for several years in the insurance industry. I've had hands-on experience dealing with various aspects of insurance, including auto insurance. My knowledge extends to the intricacies of policy types, coverage options, and the factors that influence premium rates.
Now, let's delve into the concepts covered in the article about purchasing car insurance:
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Calculating Daily and Yearly Miles (Step 1):
- Use navigation apps to determine daily mileage.
- Calculate yearly mileage based on workdays (260 days in a year).
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Gathering Information (Step 2):
- Collect essential paperwork, including Vehicle Identification Number (VIN), odometer reading, make and model of the car, driver’s license number, personal information (name, SSN, DOB, address, employer), and driving history.
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Understanding Coverage Types (Step 3):
- Liability: Covers costs for injuries and property damage in an at-fault accident.
- Collision: Covers expenses for repairs or replacement in accidents with another vehicle or object.
- Comprehensive: Protects against non-collision damage (theft, natural disasters).
- Medical Payments (MedPay) and Personal Injury Protection (PIP): Cover medical expenses.
- Uninsured/Underinsured Motorist Protection: Covers expenses in accidents with insufficiently insured at-fault drivers.
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State Minimum Insurance Requirements (Step 3):
- Each state has specific coverage requirements (e.g., Ohio's $25,000/$50,000/$25,000).
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Shopping Around for Quotes (Step 4 and 5):
- Explore various avenues to obtain quotes: directly with companies, through agents or brokers, or online comparison platforms like The Zebra and Everquote.
- Compare at least three quotes to understand high, low, and mid-range options.
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Considering Discounts (Step 5):
- Look for discounts, such as bundling policies (e.g., combining auto and homeowners insurance) or enrolling in usage-based insurance programs.
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Purchasing the Policy (Step 6):
- Sign necessary documents and provide payment information.
- Consider paying for a full year in advance for potential discounts.
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Canceling Old Policy (Step 7):
- Communicate with the old provider to terminate the policy to avoid paying premiums for both old and new policies.
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Determining Adequate Coverage (Additional Information):
- Evaluate your state's minimum requirements and consider additional coverage based on personal needs and risk tolerance.
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Telematics (What is Telematics?):
- Some insurers offer discounts through driver surveillance apps that monitor driving habits.
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Reviewing and Updating Policies (How often?):
- Insurance experts recommend an annual review of coverage and pricing.
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Frequently Asked Questions (FAQs):
- Necessary information for purchasing car insurance, including driver’s license, VIN, vehicle details, SSN, previous insurance information, registration, driving infractions, and payment details.
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Factors Influencing Premium Costs:
- Age, gender, driving history, credit information, location, insurance provider, coverage type/limit, daily/yearly miles driven, deductible, and available discounts.
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Types of Policies:
- Liability, collision, comprehensive, medical payments (MedPay), personal injury protection (PIP), and uninsured/underinsured motorist protection.
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Buying Insurance Before a New Car (Last Section):
- Advises having a new policy in place before purchasing a new car to avoid gaps in coverage and potential premium increases.
Feel free to reach out if you have specific questions or need further clarification on any of these concepts.
