Auto Insurance Checklist Before Buying

What you need before you buy auto insurance

You can streamline the process of buying an auto policy by gathering the information you’ll need for a car insurance quote ahead of time. Here’s a comprehensive list of everything you’ll need:

• Date of birth and driver’s license numbers for all drivers in your household

• VIN, year, make, model, and trim level for every vehicle you want to insure

• Current mileage for all vehicles 

• Estimated annual miles you’ll drive

• Previous insurance policy details (coverage types and limits, deductibles)

• Driving history for each driver (at-fault accidents, speeding tickets, and driving under the influence (DUI) convictions from the last three to five years)

• Garage/parking location for all vehicles

• Whether you own, lease, or finance each car

Make sure you also prepare questions to ask when buying car insurance. You may want to ask about discounts, coverage add-ons, or the claims process.

Coverages to look for in an auto insurance policy

Before shopping for auto insurance, it’s important to understand the types of coverage and limits you need. Here’s what to look for in an auto insurance policy.

State-required car insurance coverages

Most states require liability insurance, which covers damage and injuries to others when you cause a car accident. State minimum liability coverage may include:

• Bodily injury liability: Helps pay the other party’s medical bills after you cause an accident

• Property damage liability: Pays to repair or replace another person’s vehicle or property you damage in an accident

• Uninsured/underinsured motorist coverage (select states): Covers accident costs when the other driver lacks sufficient coverage or you’re the victim of a hit-and-run

• Personal injury protection (select states): Covers medical expenses, lost wages, and other costs when you or your passengers are hurt in a crash

• Medical payments coverage (Maine, Pennsylvania, and New Hampshire): Covers medical or funeral bills when an accident injures you or your passengers

Required coverages for leased or financed vehicles

While states don’t require full-coverage insurance, almost four out of five drivers purchase a full-coverage policy. Lenders and leasing companies typically require this type of coverage to protect their interest in the vehicle. In addition to liability, full coverage generally includes:

• Collision coverage: Pays to repair or replace your car after damage from an at-fault accident or from rolling over

• Comprehensive coverage: Pays to repair or replace your vehicle after a non-collision event, such as theft, vandalism, natural disasters, falling objects, or animals

Be prepared to choose separate deductibles for the collision and comprehensive parts of your full-coverage policy. A higher deductible will lower your monthly premium, but you’ll have to pay more if you file a claim.

Optional coverages for greater financial protection

Most insurers offer several optional coverages, from common and inexpensive add-ons like roadside assistance to niche coverages. Before buying a policy, consider whether you want these common endorsements:

• Accident forgiveness: Insurers offer accident forgiveness as a paid coverage add-on or earned benefit. It prevents your premiums from increasing after an at-fault accident. It could make sense for accident-prone or teen drivers.

• Gap insurance: Sometimes sold as a separate policy but often offered as an auto policy endorsement, gap insurance covers the difference between your vehicle’s value and your outstanding auto loan balance. It’s often worth buying if you recently financed a new car.

• New car replacement: If you total your car in the first year of ownership, this pays for a new car of the same make and model.

• Rental car reimbursement: This covers the cost of a rental car while your car is in the repair shop after a covered accident. It’s wise to add if you rely on your vehicle for work or school.

What to consider before buying an auto insurance policy

Before making your final purchase, ask yourself the following questions:

• Does the policy include the coverages I need?

• Are the liability coverage limits sufficient?

• Are the company’s claims process and customer service options convenient?

• Can I afford the deductible if I need to file a claim?

• What are the policy exclusions?

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What to know about deductibles, limits, and discounts before buying

Your state’s minimum coverage limits likely won’t provide enough protection for most drivers. If you cause a serious accident, the other driver could sue you if your policy limits don’t cover their medical bills or property damage, going after your personal savings. Many experts recommend buying enough coverage to protect the combined value of your assets.

The table below shows how your choice of limits affects your premiums and out-of-pocket costs.

Liability Limit	Premium Cost	Out-of-Pocket Cost After an Accident
State minimum liability limits	Lower	Higher
High liability limits	Higher	Lower

When choosing deductibles for your collision and comprehensive coverages, it’s important to balance affordable premiums with out-of-pocket costs. Raising your deductible helps lower your premiums, but make sure you have enough savings to cover your deductible after a claim.

The table below illustrates this trade-off between deductibles and premiums.

Deductible Amount	Premium Cost	Out-of-Pocket Cost When Filing a Claim
High deductible	Lower	Higher
Low deductible	Higher	Lower

You can offset high premiums by asking your insurance agent about discount opportunities that your initial quotes and rates may not reflect. For example, you could save money by taking a defensive driving course, enrolling in a usage-based program, bundling your policies, or being a good student.

Tips for comparing car insurance quotes before buying a policy

With the right process, it’s easy to compare auto insurance quotes and buy a policy. Follow these auto insurance buying tips:

1. Revisit your declarations page. It provides most of the info you’ll need for a quote, like your VIN and coverage limits.

2. Compare apples to apples. Use the same driver profiles, vehicle info, coverage limits, and deductibles to ensure an apples-to-apples pricing comparison.

3. Check for optional coverages. There may be differences in endorsement options and discounts to be aware of when comparing prices between companies.

4. Get at least three quotes. To ensure you get the best deal, compare quotes from at at least three different companies. You can use an insurance-comparison site to save time.

5. Understand your policy. Review what each policy includes and excludes. Note each company’s claims process, reputation, and cancellation policy.

6. Choose your policy and pay your down payment. Finalize your policy details and process your first premium payment. Note the policy’s effective date.

7. Cancel your old policy. Ensure your new policy is in effect before you cancel your old policy to avoid a lapse in insurance. A lapse in coverage can have consequences ranging from increased premiums to legal repercussions.