How to Shop for Car Insurance in 7 Easy Steps

Car insurance is a legal requirement in every state except New Hampshire, but not all car insurance policies are the same. The average cost of car insurance in the U.S. is $104 per month for liability coverage and $204 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 so you can 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.

1. Collect your information

2. Decide how much coverage you need

3. Research car insurance companies

4. Compare car insurance quotes

5. Ask about discounts you’re eligible for

6. Take out a new policy

7. Cancel your existing policy

1. Collect your information

On a standard car insurance application, you’ll find a variety of questions about yourself and your vehicle. Most of the information is readily available, like your ZIP code. But you’ll likely need to contact your state’s department of motor vehicles to get a copy of your driving record. Providing this basic information will help you get the most accurate quote.

Here’s some of the general information you’ll need to submit:

• Name

• Driver’s license number

• Age

• Gender

• Driving record

• ZIP code

• Make and model of your vehicle

• Vehicle identification number (VIN)

2. Decide how much coverage you need

Before you purchase a car insurance policy, you’ll need to choose the amount of coverage and types of coverage you want. This will be different for every driver. Here are some of the most common types of car insurance that you should consider.

Liability-only coverage

Nearly every state requires drivers to carry a minimum amount of liability insurance in order to drive legally.^[1] This is called a minimum-coverage policy. The national average cost of liability-only coverage is $104 per month.

Liability-only insurance covers your financial responsibilities when you cause an accident that results in someone else’s bodily injuries or property damage. It’s the cheapest car insurance you can get, but it doesn’t provide any coverage for your injuries or your vehicle.

Full coverage

A full-coverage policy includes liability insurance, collision insurance, and comprehensive insurance. Collision insurance covers your vehicle repairs after an accident. Comprehensive insurance covers non-collision incidents, such as theft, vandalism, natural disasters, and falling objects.

Full-coverage insurance is optional for most drivers, but your lender will probably require it if you lease or finance your vehicle. Full-coverage insurance in the U.S. averages $204 per month.

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Optional coverages

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.^[2]

• 

  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, battery replacements, 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.^[3]

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  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.

3. Research car insurance companies

The next step is to start researching car insurance companies. Keep in mind that the best option 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 the best customer service.

When comparing insurers, you should consider a few factors, including coverage options, discounts, customer service, claim handling, and third-party ratings. You can check AM Best for financial strength scores and review J.D. Power’s Auto Insurance Study to get a better sense of a company’s overall customer satisfaction.

In addition, you can see the number of 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:

4. Compare car insurance quotes

Comparing car insurance quotes is one of the most important steps in shopping for insurance. Because it can be time-consuming to get quotes from individual insurer websites, using an online quote-comparison tool can simplify the process.

When you use a quote-comparison site, you provide information about yourself and your vehicle and get matched with quotes from multiple different companies. Each company has different rating criteria, so the quotes will vary. Because of this, even the same driver can be quoted a wide range for rates from different insurers, as you can see in the table below.

Comparison shopping makes it easy to see which insurer is the cheapest for your unique driver profile.

5. Ask about discounts you’re eligible for

Car insurance discounts are a great way to save money and lower your insurance premium.^[4] Insurance companies offer different 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:

6. Take out a new policy

Once you’ve chosen the right insurance company for you, it’s time to purchase the policy. You’ll probably need to submit some additional personal information to take out a policy, including your car’s vehicle identification number (VIN) and your Social Security number. You can also choose the policy’s start date.

Most car insurance policies are in effect for six or 12 months, and there are pros and cons to each. A six-month policy will have a lower premium, but your insurer has more opportunities to evaluate your rate and potentially increase the premium. With a 12-month policy, the premium will be higher, but your rate will remain the same for at least one year.

7. Cancel your existing policy

If you already have car insurance coverage, now is the time to cancel your old policy. Make sure your new policy has already started before you cancel the old one. If you cancel the old policy before the new one starts, you’ll have a lapse in coverage.

Contact your insurance company to cancel your current policy. Depending on the company, you may be able to cancel online. But many insurers require you to call and speak to a representative or talk to your agent.

If your insurance lapses, this will appear on your insurance history, and you aren’t protected in case of an accident. Having a lapse in coverage contributes to your risk profile, so it can cause your premiums to increase in the future.

Shopping for car insurance FAQs