Step 1: Gather information
States regulate insurance, so begin by researching your state’s minimum insurance requirements, which vary from state to state. To determine the coverage you need, you must also consider your personal factors, such as driving history, age, and vehicle type.
Last but not least, you must decide if you’d rather work with a large national insurer or a local or regional provider. Large companies might offer discounts and other perks, while local companies may provide more personalized service and a better understanding of your area.
State minimum requirements
Each state has its own minimum insurance requirements that drivers must purchase to operate a vehicle legally. You can also visit your state government’s website, call your local Department of Motor Vehicles (DMV), or ask your insurance agent.
The minimum required coverage may not fully protect you and your assets, so you may want to consider purchasing additional coverage.
Factors auto insurers consider
Auto insurers consider many factors, such as driving history, vehicle type, age, and location, before giving you a car insurance rate.
Mileage: Your mileage is the number of miles you drive the vehicle. It also includes your purpose for driving, such as commuting, business, and personal use.
Vehicle type/condition: Car type, make, model, year, and safety features affect car insurance quotes. Riskier cars with higher repair costs generally have higher car insurance rates.
Vehicle financials: Insurance companies may view people who own their cars as lower risk than those who lease. Because car owners have a bigger financial investment in their vehicles, insurers may think they have more incentive to keep their vehicles in good condition.
Location: Insurance companies use location data to assess factors like the amount of traffic, the crime rate, and the area’s weather. All play a role in how much risk the driver poses, and a higher risk status can mean higher premiums. Rates may vary by state, city, and ZIP code.
Driving history: Driving history indicates how likely a driver is to have an accident. Drivers with a clean record generally get more favorable rates than those with a history of accidents or traffic violations.
Who drives your vehicle: Having multiple drivers on your policy means more people could possibly be involved in an accident, which increases the risk of a claim and your insurance rates. And each driver’s history affects rates.
Personal information: Personal information — such as age, credit history, gender, marital status, employment, and education — affect your risk assessment and insurance rates.
Narrow down the desired type of insurer
When learning how to shop for car insurance, it’s essential to know the different types of insurers available. Insurers can be large, well-established companies or smaller, more niche providers. Some insurers work better for some drivers than others, so knowing what to look for is crucial.
When evaluating insurers, consider coverage options, customer satisfaction, financial stability, and pricing factors. You should also compare quotes from multiple providers to ensure you choose the right car insurance policy at the best price.
Step 2: Consider coverage needs
The car insurance coverage you need can vary depending on factors such as the car’s value, your driving habits, and your financial situation. Similar to putting a puzzle together, you must find the right combination to ensure adequate coverage for your vehicle.
State minimum requirements vary from state to state but usually include bodily injury and property damage liability. Both coverages protect drivers against financial loss. Bodily injury pays costs related to the injury or death of others, while property damage liability covers damages to other people’s property.
This covers damages to your vehicle, regardless of fault. If your car has damage from a collision with another vehicle or object, like a fence or building, this coverage helps pay for repairs or replacement.
This covers damage from non-collision events, such as theft, vandalism, fire, natural disasters, and hitting animals. It also sometimes pays for windshield repair or replacement.
This packages several insurance protections into one convenient policy. Full-coverage insurance provides multiple coverages in one place, all for one price. It often includes liability, comprehensive, collision, uninsured/underinsured motorist, and other insurance coverages your state requires.
Personal injury protection (PIP) coverage
This provides coverage for medical expenses and lost wages if you suffer an injury in a car accident, regardless of fault. It also covers passengers in your car and injured pedestrians if you cause an accident.
Medical payments coverage
This helps pay for medical expenses due to an accident, regardless of fault. It also covers any passengers in your vehicle during the accident.
This covers the difference between the amount you owe on your car loan and your car’s current value in case you total the car and what you owe exceeds the current value of the car.
Uninsured/underinsured motorist coverage
This reimburses you if an uninsured or underinsured driver causes damage to you or your vehicle. Some auto insurers combine the two policies, but you may purchase them separately.
Add-ons and riders
These provide additional coverage beyond a basic policy. Common add-ons and riders for car insurance policies include rental car reimbursement, roadside assistance, and extra equipment coverage.
Step 3: Identify discounts
Identifying discounts is important when shopping for auto insurance because they can help you secure the lowest rates. Start by reviewing your current policy to see what discounts you already have. Then, contact your insurance company to inquire about additional discounts, such as safe driver, affiliation, multiple policy, and loyalty discounts.
You can connect with your insurance company by calling its customer service line, visiting its website, or going to a local office. It’s helpful to have your policy information on hand when contacting your insurer, as well as a list of the discounts you’re interested in.
|Driver-Based Discounts||Policy-Based Discounts|
- Good driver
- Good student
- Defensive driver course
- Organization affiliation
- Employer group
- Low mileage
- Safety features
- Paperless billing
- Automatic payments
See More: Car Insurance Discount Guide
Step 4: Compare quotes
Comparing quotes from different companies can lead to lower rates on your premium. While some insurance companies offer quotes directly, a comparison-shopping site like Insurify allows you to compare quotes from multiple insurers at once to help you find the cheapest car insurance.
You’ll enter basic information about your car, driving record, and location and answer a few questions to identify discounts. However, avoid lead-generation sites that sell your information. Make sure the site is trustworthy and legitimate to avoid spam and unsolicited calls.
Step 5: Check out reviews and stability
Before choosing an auto insurance company, make sure to research its reputation. Review feedback from customers to help you determine whether the company works well for you. To save time and make a well-informed decision, look to reputable quote-comparison sites to access comprehensive reviews of car insurance companies.
Step 6: Purchase and finalize
You can purchase car insurance directly from an insurance company, through an insurance broker, or by using online quote-comparison tools. Before finalizing your policy, review the details of your insurance coverage, including your policy documents, and make sure everything is accurate.
If you have an existing policy, you’ll need to cancel it. Make sure you select the right start date to avoid a lapse in coverage. When you receive your new insurance cards for proof of coverage, keep a copy in your vehicle.
Learn More: How to Cancel Your Car Insurance