Shopping for Car Insurance: How to Compare, Save, and Choose the Right Policy
Shopping for car insurance and comparing quotes helps you find the right balance between coverage and cost.
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Written byJanet Berry-Johnson
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8+ years writing about insurance, taxes, and personal finance
Certified public accountant
Janet applies her experience in personal finance, taxes, and accounting to make complex financial topics accessible. Her byline has appeared on numerous web media.
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Edited bySarah Archambault
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Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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Reviewed byMark Friedlander
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Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
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Table of contents
While car insurance is a legal requirement in every state except New Hampshire, not all car insurance policies are the same. The average cost of car insurance in the U.S. is $99 per month for liability coverage and $175 per month for full coverage, according to Insurify data. But you might pay more or less than the average depending on factors like your location, age, and the type of car you drive.
When shopping for car insurance, it’s a good idea to compare quotes from several insurers to find the best coverage and most affordable rates for your situation. Learn how to shop for car insurance in seven steps, as well as what to consider before choosing a policy.
Quick Facts
You typically won’t need to provide your full driving record to get a car insurance quote. But it’s a good idea to be prepared to share a few details about your vehicle and some basic personal information.
If you finance or lease your vehicle, your lender will typically require you to buy full-coverage car insurance.
Real-time quote-comparison sites offer accurate, instant insurance quotes — unlike lead-generation sites, which might delay your quote or send spam.
1. Collect your information
Start by gathering a few essential details and some personal information about all drivers and vehicles you need to insure. Insurance companies factor driving history into your quote, so they typically access driving records directly from the DMV. But you may need to answer a few questions about accident history and traffic violations for all drivers to get a quote.
Collect the following information for all drivers and vehicles:[1]
Name
Driver’s license number
Age
Gender
ZIP code
Vehicle make and model
Vehicle identification number (the VIN is located on your car, vehicle registration paperwork, or current insurance ID card)
It’s common for quote-comparison sites to ask for your phone number or email to send real-time quotes. But be cautious about sharing more sensitive personal details, like your Social Security number. Legitimate sites generally don’t need this information to provide a quote.
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2. Decide how much coverage you need
Take time to determine how much coverage you need before comparing policies. You can do this by asking yourself a few questions: How old is your car? Could you afford to replace it if you totaled it? How much risk are you comfortable taking on?
Your answers will help you decide between liability-only and full coverage.[2]
Good to Know
If you finance or lease your vehicle, your lender or leasing company will likely require you to have full coverage.
Liability-only coverage
Most states require drivers to carry at least a minimum level of liability insurance to drive legally. Liability insurance pays for damage or injuries you cause to others in an accident. It doesn’t cover damage to your vehicle, so liability-only policies usually have the lowest premiums.[3]
The national average cost of liability-only car insurance is $99 per month, according to Insurify data.
State  | Minimum Car Insurance Requirements* |
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| New Hampshire | Insurance isn’t required in New Hampshire if you can meet financial responsibility requirements. If you buy insurance, you need to purchase the following minimum coverages:
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*Insurify verified this information with each state’s department of insurance, motor vehicle department, department of finance, or state statutes website.
Full coverage
Full-coverage car insurance includes several types of protection designed to cover you and your vehicle. It’s a good option if you finance or lease a vehicle, own a newer or higher-value car, or just want peace of mind that you have protection against losses from accidents, theft, vandalism, or weather damage.
A full-coverage policy typically includes:
Liability coverage: Liability insurance helps pay for injuries or damage you cause to others or property in an accident. You can choose to buy your state’s minimum liability limits or increase your protection with higher limits.
Collision coverage: Collision insurance covers damage to your car from hitting another vehicle or object. For example, if you back into a pole, collision insurance helps cover the repair costs.
Comprehensive coverage: Comprehensive insurance covers damage from non-collision events, like theft, vandalism, hail, or falling objects. For example, if a tree branch damages your vehicle during a storm, comprehensive insurance helps cover the repairs.
The national average cost of full-coverage car insurance is $175 per month, Insurify data shows.
Additional coverages you may need
Many insurance companies offer endorsements, or optional coverages, that fill gaps in your basic policy and provide more customized protection. Here are some of the most common car insurance endorsements available.
Gap coverage
Gap insurance, which stands for “guaranteed asset protection,” is beneficial if you lease or finance your car. If you have negative equity in the vehicle and it gets totaled, gap insurance will pay the difference between the car’s depreciated value and the amount you still owe.
Roadside assistance coverage
Roadside assistance covers basic services you might need if you break down or get stranded on the road. Depending on the policy, it’ll cover things like flat-tire changes, fuel delivery, dead battery jump-starts, lockouts, and towing.
Personal injury protection coverage
Many no-fault states require personal injury protection (PIP), and it’s optional in some at-fault states. This type of insurance will pay for your medical expenses after an accident, regardless of which driver was responsible.
Uninsured/underinsured motorist coverage
Some states legally require uninsured/underinsured motorist insurance, but insurance companies often sell it as an endorsement. This policy will provide additional coverage for your losses if you get into an accident with a driver who’s uninsured or doesn’t have enough insurance coverage to pay for your injuries or property damage in full.
Medical payments coverage
Medical payments insurance, often called MedPay, covers medical costs for you and your passengers if you get injured in a crash. Full-coverage policies sometimes include MedPay. Keep in mind, this coverage isn’t available in all U.S. states.
3. Compare car insurance quotes
To find the best rate and coverage options, compare quotes from multiple insurers. Rates vary widely from one insurance company to another, even for the same driver and vehicle. When getting quotes, input the same coverage details and policy limits for the most accurate comparison.
You don’t need to commit to a new policy, and a few minutes of research could help you find cheaper insurance or a policy that’s a better fit. Shopping around for insurance quotes is generally a low-risk, quick, and easy process — especially if you use an insurance-comparison website.
Real-time quote comparison sites vs. lead-generation sites
Real-time quote comparison sites, like Insurify, show accurate quotes from top auto insurers instantly. You can review prices, adjust coverage, and even buy a policy online without phone calls or follow-ups. These online quote-comparison tools also tend to be faster, more transparent, and protect your privacy better than lead-generation sites.
Lead-generation sites typically collect your information and sell it to multiple insurance agents or insurance brokers. This can result in a barrage of calls and emails, and you may not receive quotes right away — or ever. You may also only receive spam and never get a quote.
Example: How comparing quotes makes a difference
Insurance companies calculate rates differently, but they generally consider factors like location, diving history, age, and vehicle type. That’s why the same driver can receive vastly different quotes from different insurers.
For example, the average monthly cost for full coverage in Texas is $100 with State Farm. But Liberty Mutual’s average rate for the same coverage and driver is $340, according to Insurify data.
The bar graph below shows how comparing quotes may lead to significant savings. This example is based on a 40-year-old driver in Texas with a clean driving record.
Monthly Cost by Insurer for 40-Year-Old Driver
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
4. Research car insurance companies
The next step is to start researching car insurance companies. The best insurer is different for every driver. For example, the best car insurance company for you might have the cheapest auto insurance rates. For someone else, the best insurer might offer the most endorsements or have great customer service.
When comparing insurers, you should consider a few factors, including coverages, discounts, customer service, claim handling, and third-party insurance ratings. You can check AM Best for financial strength ratings and review the J.D. Power U.S. Auto Insurance Study to get a better sense of a company’s overall customer satisfaction.
In addition, you can see the number of consumer complaints an insurer has by consulting the National Association of Insurance Commissioners (NAIC) Complaint Index. Companies that have a complaint index below 1.0 have fewer complaints than expected for their size.
Here’s a closer look at some of the best insurers to consider:
Insurance Company | IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | Best For |
|---|---|---|
| State Farm | 9.3 | Overall |
| American Family | 9.3 | Discount seekers |
| Nationwide | 9.0 | Low-mileage drivers |
| GEICO | 9.2 | Drivers with an incident |
| Travelers | 8.5 | Young drivers |
| USAA | 9.1 | Military members |
| NJM | 9.0 | Mid-Atlantic region drivers |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Our editorial team spent more than 350 hours developing the Insurify Quality (IQ) Score and scoring insurance companies. The IQ Score objectively analyzes and calculates a score for insurers using more than 15 crucial criteria. The team weighted criteria by importance to the consumer — factors such as customer reviews and affordability influence the score more than availability and third-party ratings.
We rate each company on a 1 to 10 scale based on five categories: financial ratings, customer satisfaction, affordability, customer support and transparency, and availability. Insurify updates ratings once a year or as more recent information becomes available.
- Third-party financial ratings: Insurify uses data from AM Best, S&P, Moody’s, and more to compare insurance companies’ credit and ability to pay out future claims.
- Customer satisfaction: To calculate this score, Insurify analyzed more than 55,000 customer reviews across 155 car insurance companies. We also consider third-party ratings from J.D. Power, the National Association of Insurance Commissioners, and Trustpilot.
- Affordability: Our data scientists analyzed more than 90 million real-time auto insurance rates from our partners across the U.S., as well as available discounts, to calculate an affordability score.
- Customer support and transparency: This measures coverage options, ease of claims filing, and the insurer's transparency surrounding discounts, coverages, and claims process.
- Availability and reach: Insurify scores availability and reach by identifying the number of states in which insurers offer coverage and company size by market share.
5. Ask about discounts you’re eligible for
Car insurance discounts are a great way to save money and lower your insurance premiums. Insurance companies offer a wide variety of discounts, so you should find out what discounts are available when comparing insurers. Some of the most common discounts include savings for safe drivers, getting good grades in school, and bundling multiple insurance products.
Below, you can see how much certain car insurance discounts can help you save:[4]
Discount | Potential Savings | How to Qualify |
|---|---|---|
| Passive restraint | 40% | Drive a vehicle equipped with airbags or automatic seat belts |
| Telematics | 10%–30% | Allow your insurance company to track your driving activity via a mobile app or installed device |
| Bundling | 7%–25% | Buy two or more policies from the same company |
| Multi-vehicle | 7%–25% | Insure two or more vehicles with the same company |
| Military discount | 10%–25% | Available to current and former members of the U.S. military and their families |
| Good student discount | 5%–25% | Meet academic standards, like a GPA of 3.0 or higher or a grade average of B or better |
| Safe driver/accident forgiveness | 10%–22% | Keep your driving record clean of tickets or accidents for at least 3–5 years |
| New car | 15% | Drive a vehicle that’s 3 model years old or newer |
| Loyalty | 11% | Stay with your insurance company for multiple years |
| Early bird | 10% | Buy a new policy before your current policy expires |
| Defensive driving course | 5%–10% | Complete a state-approved defensive driving course |
| Paid-in-full | 9% | Pay your premium in full rather than taking advantage of monthly payment options |
| Paperless | 1% | Choose to receive bills and other paperwork digitally |
6. Take out a new policy
After you find a new insurer and a quote that fits your insurance needs and budget, purchase the policy. Most companies ask you to formally submit personal and vehicle information to take out a policy, such as the vehicle identification number (VIN) or your Social Security number.
Choose a policy start date before your current policy ends to avoid a lapse in coverage. Most car insurance policies are in effect for six or 12 months. A six-month policy tends to have lower premiums, but with a 12-month policy, you can lock in the same rate longer. To activate the policy, most insurers require the first month’s premium payment in advance.
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7. Cancel your existing policy
Make sure your new policy is active before you cancel your current insurance. Depending on the company, you may be able to cancel online. But many insurers require you to call and speak with a customer service representative or talk to your agent.
If your insurance lapses, it will appear on your insurance history and could cause higher premiums in the future. You also won’t be covered in the event of an accident and could have to pay hundreds or thousands of dollars out of pocket.
Shopping for car insurance FAQs
When shopping around for car insurance, understanding the basics can help you make informed decisions. Consider these answers to some common questions about comparing rates.
What’s the easiest way to shop for car insurance?
The easiest way to shop for car insurance is to use an online quote-comparison tool. This makes it easy to compare quotes from multiple insurance companies all in one spot. It’ll also help you find the best price.
Before purchasing a policy, you should review your top options based on important factors, like coverage options, discounts, customer service, and financial strength.
Is it a good idea to shop around for car insurance?
Yes. It’s generally a good idea to shop around for car insurance to find the cheapest rate for your coverage needs. Even small differences in pricing or discounts can lead to hundreds in annual savings.
Does shopping for car insurance affect your credit score?
No. Shopping for an auto policy doesn’t affect your credit. But in most U.S. states, insurance companies can use credit-based insurance scores when determining premiums. If you have excellent credit, you may qualify for the most favorable rates. On the other hand, people with poor credit often pay much higher rates.[5]
In states where companies check credit, insurance companies use a soft credit pull to check your credit-based insurance score. This doesn’t affect your credit.
When should you start shopping around for car insurance?
Ideally, it’s a good idea to start shopping around for car insurance and comparing quotes a few weeks before your policy is due to renew. This gives you time to evaluate your options and avoid a potential lapse in coverage. If you decide to switch, make sure your new policy is active before canceling any existing coverage.
Which company has the best auto insurance rates?
It depends. The company with the best auto insurance rates varies on numerous factors, like your driving history, location, vehicle type, and who else your policy covers. Compare quotes from several insurers to find the cheapest rates for the coverage you need.
What should you ask when shopping for car insurance?
When shopping for car insurance, ask about available coverage options, discounts, telematics programs, and other insurance products the company offers, such as home and renters insurance. You may also want to check out reviews from customers and third parties to see how the insurer performs in terms of customer service, claims processing, and financial stability.
What are the best online tools for car insurance shopping?
The best online tools for car insurance shopping are generally legitimate online comparison sites, like Insurify. These sites offer quotes in real time, making it easy to view multiple quotes, adjust coverage levels, and purchase a policy without sharing unnecessary personal information. And, unlike lead-generation sites, they’re unlikely to spam you.
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Sources
- Insurance Information Institute. "What information do I need to give to my agent or company?."
- Insurance Information Institute. "How much auto coverage do I need?."
- Insurance Information Institute. "What is covered by a basic auto insurance policy?."
- Insurance Information Institute. "How to save money on car insurance."
- National Association of Insurance Commissioners. "Credit-Based Insurance Scores Aren’t the Same as a Credit Score. Understand How Credit and Other Factors Determine Your Premiums."
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Janet Berry-Johnson
Janet Berry-Johnson, CPA is a freelance writer with a background in accounting and income tax planning and preparation. She's passionate about making complicated financial topics accessible to readers. She lives in Omaha, Nebraska with her husband and son and their rescue dog, Dexter. Visit her website at www.jberryjohnson.com.
Janet has been a contributor at Insurify since October 2022.
Edited bySarah Archambault
Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
Featured in
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.