Does anything feel more exciting than getting your first car?
Probably not! But before you can start driving your new vehicle, there is an important step you need to take care of: buying car insurance. Virtually all states (except for New Hampshire and Virginia) require car insurance. However, as a new driver, getting auto insurance for the first time can be overwhelming and confusing—not to mention expensive.
But it doesn’t have to be this way. Insurify is an easy-to-use tool that allows you to compare real-life auto insurance quotes and find coverage that gives you the protection you deserve at a price you can afford.
>>>MORE: Car Insurance Calculator
Score savings on car insurance with Insurify
The Basics of Car Insurance Coverage
Car insurance coverage protects you against financial loss in case of a car accident or theft. You agree to pay a premium regularly to an insurance company, and in exchange, it promises to cover financial damages to your vehicle, the other driver’s vehicle, bodily injuries, or all three, depending on the kind of coverage that you choose.
Before you get to shopping for the best auto insurance policy for your new car, let’s get clear on the basics. Here are some important terms car insurance companies use to talk about how much they will cover, how much you’ll have to cover out of pocket, and how much you’ll have to pay to have a valid policy so you can make an informed decision.
- Payout limit: Also called a car insurance coverage limit, this is the maximum amount your car insurance policy will cover in case of an accident or damage to your vehicle. Different states have different minimum requirements. If you don’t have a lot of driving experience, it may be worth it to get more than the minimum coverage, but keep in mind that higher payout limits equal higher insurance rates.
- Deductible: Your deductible is how much you’ll have to pay out of pocket to cover accident damage before your insurance covers the rest of the claim. If you can afford it, raising your deductible by a few hundred dollars is a great way to lower your insurance premiums by 15 to 30 percent.
- Insurance premium: Your insurance premium is how much your insurer is going to charge you regularly for your car insurance policy. You will usually have to make a monthly payment, but paying your premiums in full will likely give you a nice discount. Ask your insurance agent about your options.
>>> MORE: How Much Car Insurance Do I need?
Liability coverage is the minimum required car insurance coverage you can get. It gives you property damage liability and bodily injury liability to cover the costs of the other driver’s vehicle damages and medical expenses after an accident if you’re found at fault. Different states set different minimum liability coverage amounts, so check what the required coverage is in your area.
There is no standard full-coverage car insurance definition. You can combine your required liability coverage with other, more in-depth policies to have better protection on the road and avoid unpleasant surprises. Collision and comprehensive coverage are great options for new drivers who want to feel more secure behind the wheel.
- Collision coverage: This coverage option pays for repair expenses when your vehicle is damaged in an accident. It also refunds you for the actual cash value of your car if it is totaled. Collision insurance works regardless of fault, so you’ll always be protected in any situation. If you’re financing your car, your lender may require collision coverage.
- Comprehensive coverage: This option covers damage to your vehicle in case it’s stolen or vandalized or needs repairs after being through a flood, hail, a fire, a run-in with an animal, or another event that is not a collision with another vehicle or object. You may also hear comprehensive coverage called “other than collision” coverage.
Keep in mind that neither collision nor comprehensive coverage pays for medical bills after a bodily injury.
>>> MORE: Full Coverage Car Insurance Quotes
Other Coverages You May Consider
If you want to feel more protected behind the wheel, you can also customize your full coverage with optional add-ons to create the best car insurance policy for you. Gap insurance, personal injury protection, and uninsured motorist coverage are all popular options to add to your policy. And in certain circumstances and states, you might be required to get them.
- Guaranteed auto protection (GAP): Also known as gap insurance, this is an optional add-on that covers the difference between the amount you owe on your car and its actual cash value after an accident that results in a total loss. If you’re leasing your car, your lender might require gap insurance. You can learn more here.
>>>MORE: Where to buy GAP insurance
- Personal injury protection (PIP): Do you worry that your medical bills might be too high if you get in a car accident? A personal injury protection policy provides you with bodily coverage to help you (or your passengers) pay medical bills after an accident. Keep in mind that some states require this coverage.
- Underinsured/uninsured motorist coverage: This coverage protects you if you have an accident with someone who doesn’t have liability insurance coverage when they are found at fault. This coverage may be a great option if you want to avoid the headache of dealing with an uninsured driver. Some states may require you to have this coverage.
How to Shop for Car Insurance
What should you purchase first: your car or your car insurance? If you didn’t have any auto insurance coverage in the past, even if you get behind the wheel just to drive your new car home without insurance, you’d be breaking the law in most states. Moreover, if you’re financing your car, most dealerships will not let you drive off without at least liability coverage.
So it’s best to get insurance coverage before you buy your new car. Here are tips on how to shop for car insurance to get the best deal.
- Check the minimum coverage required in your state. All states (except for New Hampshire) require minimum liability coverage. Some states may also require additional coverage, such as underinsured motorist coverage or personal injury protection. Get clear on the basics before you start your shopping process.
- Decide on the type of coverage you need. Do you want to go with the minimum required coverage or personalize your policy for maximum protection? Find a balance between the coverage that makes you feel confident behind the wheel and your budget. If you’re financing your car, getting gap insurance may be a great additional step to consider.
- Use comparison shopping to get the best deal. The best way to save money on your car insurance coverage is comparison shopping. According to the Insurance Information Institute, you should get at least three price quotes from different companies. Insurify is an online comparison tool that can give you real-time quotes tailor-fit to your needs and risk profile—all in less than two minutes.
- Protect your net worth. If you decide to go with just liability coverage, make sure that you have enough of it to shield your savings and property in case of an expensive accident.
- Make sure you can afford your deductibles. No one wants to think about getting into an accident, but it can happen. When you’re shopping for a car insurance policy, think realistically, and make sure that you can afford to pay your deductibles in case you’re involved in an accident.
- Take advantage of car insurance discounts. If you’re shopping for car insurance for the first time, you may have to pay higher car insurance rates. However, it’s still possible to get car insurance discounts as a young driver—for example, a good student discount. Alternatively, take a defensive driving course to keep your insurance premiums down.
Cheap Car Insurance for First-Time Buyers
As a first-time car insurance buyer, you can expect to pay higher rates because you don’t have a driving record to prove that you’re a good driver. As a result, insurers automatically consider you to be “high-risk” until you prove your safe driving habits over time (usually a couple of years).
>>> MORE: High-Risk Insurance Companies
The absence of driving history is not the only factor that influences car insurance costs. Car insurance companies can also look at your age, credit score, marital status, vehicle make and model, and other aspects to provide you with a quote. Certain states, such as California, prohibit insurance companies from using aspects like age and gender as factors to give you a quote.
Frequently Asked Questions
How can first-time drivers get cheap car insurance?
If you’re a teen driver, explore joining your parents’ policy instead of getting your own. It may help you keep your premiums down if the policy has a good driving history. If it doesn’t make sense to join an existing plan or you want to get your own policy, use a comparison tool like Insurify to find tailor-fit cheap car insurance options and easily unlock big savings.
How does comparison shopping work?
You’d be surprised how much of a better deal you can get if you shop around. But if you don’t want to spend hours on the phone or online giving answers to the same questions to different car insurance companies and manually comparing car insurance quotes on your own, use Insurify to get side-by-side quotes from several national and regional companies in only a few minutes.
How much car insurance should a first-time driver buy?
It depends on your unique needs, risk factors, and budget. Getting the minimum liability coverage required by your state is enough to drive your vehicle legally, but it is rarely going to be enough to fully cover accident expenses. Always make sure to have sufficient car insurance to protect your assets, such as property and savings.