How To Buy Car Insurance In 9 Easy Steps (2022)

If you are confused about how to buy car insurance, you’re in the right spot. In this article, we’ll help you understand the basics of car insurance, how much coverage you need, and how to start a policy. Finally, we’ll show you a few tips and tricks for how to get the cheapest car insurance rates.

To make the decision process even easier, we’ve already taken a look at the industry’s leaders and narrowed down the top companies in our best car insurance providers review, considering factors such as cost of coverage, customer satisfaction, and the ease of the claims process.

1. Understand the different types of car insurance
2. Determine how much car insurance coverage you need
3. Decide how you want to buy and manage your insurance
4. Gather all the necessary information
5. Understand what factors affect the cost of your car insurance
6. Compare quotes from reputable car insurance providers
7. Determine your car insurance deductible
8. Choose your car insurance provider
9. Buy your car insurance policy

1. Understand the different types of car insurance

Each state has different requirements for car insurance. To understand these requirements, it is important to understand what each type of car insurance covers.

Let’s take a look at the different types of coverage you can sign up for.

Required coverage

Almost all states mandate the following liability coverage:

Bodily Injury Liability Insurance: With this coverage, expenses related to injuries or death you cause to another party are covered.
Property Damage Liability Insurance: With this coverage, the damage you cause to another vehicle, building or property is covered.

Generally required coverage

Some states will also mandate the following coverage:

Medical Payments (MedPay)/Personal Injury Protection (PIP): This coverage reimburses you for your injuries or any medical expenses of your passengers. With a PIP policy, you can also receive payments for lost wages and related expenses.

Uninsured Motorist Coverage: If an accident is caused by an uninsured motorist, this policy covers the loss. This is also the policy that is used after a hit and run incident.

Underinsured Motorist Coverage: This plan covers your expenses when the driver who hit you doesn’t have enough coverage.

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Optional add-on coverage

When you think about how to get car insurance, there is a lot more to consider than basic car insurance coverage. Many drivers purchase more than the state minimum to ensure adequate coverage. You have the following options available to you:

Collision coverage: This coverage compensates you for any damage to your car that results from colliding with an object or another vehicle, as long as you are at fault. Many lenders require that you carry collision insurance when you have a loan on a car.

Comprehensive coverage: This coverage takes care of the damages caused due to non-accidental events. It covers theft, fire, flood, hail, vandalism, falling trees and other perils. Many lenders also require that you carry this coverage when you finance the vehicle.

Roadside Assistance: This optional coverage gives you peace of mind if something bad happens while you’re driving. Common services include towing, lockout services, jump-starts, flat tire changes and gas delivery.

Rental Car Reimbursement: This optional coverage will help cover the cost of a rental car while your vehicle is in the shop for repairs after an accident.

Accident Waiver Insurance: This additional coverage prevents your insurance premiums from increasing after an at-fault accident.

Glass Protection: Damage to the windshield is common, so this auto policy includes protection not only for the front windows but also for the sunroof, rear windows and side windows.

Gap Insurance: If you finance or lease a vehicle, you’ll want to look into guaranteed asset protection coverage. Because collision and comprehensive insurance only covers your vehicle at market value, it may not be enough to pay off a car loan if your car is totaled. Gap insurance pays the difference, so you owe the creditor nothing after a total loss.

2. Determine how much car insurance coverage you need

As mentioned, each state has different financial responsibility laws when it comes to car insurance. Check out this chart of state insurance requirements by the Insurance Information Institute (III) to find out what types of car insurance are required in your state. A state’s minimum insurance coverage is given in a series of three numbers. Each number is used for a coverage requirement.

For example, the requirements for Texas car insurance are 30/60/25. It is divided into:

Bodily injury liability of $30,000 per person
$60,000 bodily injury liability per accident
$25,000 property damage liability per accident

While the required level of insurance is mandated by your state, it is not always advisable to go with the bare minimum coverage. You should ask yourself what level of personal risk you are willing to take.

Insurance protects your assets. If you exceed your coverage limits and cause serious injuries to someone, you will be personally liable. Even if you don’t have the money, you can still be sued and have to pay for damages out of your future assets. Are you willing to take that risk?

3. Decide how you want to buy and manage your insurance

When you are ready to get car insurance, you have several options available to you. If you already have a current policy for renters or homeowners insurance, you may choose to stick with the same company. Providers will often offer discounts if you bundle multiple policies, such as home and auto insurance.

Apart from that, you must decide what kind of company you want to work with.

4. Gather all the necessary information

Once you know what type of coverage you want to purchase, be prepared to share the following documents to purchase insurance:

Personal Information

Names for all drivers
Date of birth for all drivers
Social Security and driver’s license numbers
Driving record including previous tickets or accidents

Vehicle information

Make, model and year of the vehicle
Vehicle Identification Numbers (VINs) for all covered vehicles.
Current mileage and vehicle usage
Name of registered owner
Address where you live and where the car is located
Your current auto insurance policy information and expiration date

You’ll want to answer any additional questions you’re asked to see if you qualify for a discount before purchasing insurance.

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5. Understand what factors affect the cost of your car insurance

While each company calculates the cost of its policies differently, here are some basic factors to consider:

Driving record: This is one of the most important factors in the cost of your car insurance. Speeding tickets, DUIs and reckless driving all increase rates. Depending on the state, your insurance may increase your rates for the next three to seven years.

Credit score: In general, higher scores correlate with lower rates, and individuals with lower credit scores often report higher insurance rates. Some states, such as California, prohibit the use of a person’s credit history when determining car insurance rates.

Driving experience: New drivers are charged higher rates, while drivers with a lot of experience get a break. This is because inexperienced drivers are more prone to accidents.

Location: If you live in a densely populated area with many expensive claims, your insurance will cost more, even if you are a good driver with a perfect history.

Age: Younger drivers pay more, especially teenage drivers, because they have less experience. Teenagers can pay two or three times what someone in their 40s would pay.

Mileage: Low annual mileage can mean lower premiums from many car insurance companies.

Previous auto insurance coverage: Companies like to see that you have had consistent coverage throughout your driving career. Gaps in coverage can increase your rates.

Claims history: Claims filed in the last few years can also increase your rate.

Gender of young drivers: Younger men are more likely to receive higher rates, but costs continue to rise as drivers age past their teens.

Type of vehicle: Auto insurance companies will charge you more if you own a luxury or sports car because it costs more to fix. A family-oriented SUV is a safer choice.

Geography: Additionally, you will pay more if you live in a certain region. The most expensive states for insurance include New Jersey, Louisiana and New York, according to III. If you live in Idaho, Iowa, or North Dakota, you can expect to pay the least.

6. Compare quotes from reputable car insurance providers

Whether you’re buying auto insurance for the first time or want to switch from your current car insurance company, it’s a good idea to get quotes from multiple insurance providers. This can help you compare coverage and rates. It’s important to remember that since auto insurance quotes depend on your individual circumstances, what’s best for your neighbor may not be best for you.

According to our cost estimates, the average 35-year-old pays between $990 and $2,700 and more per year for car insurance, depending on the company. That’s a wide range, which is why it’s so important to compare rates.

If you’re not sure where to start, consider getting quotes from some of the best insurance providers.

7. Determine your car insurance deductible

When it comes to insurance, the deductible is the amount of money you agree to pay for covered repairs. For example, if you are in a car accident and the repairs cost $4,000, but you have a $500 deductible, you are responsible for paying $500 and your insurance company will pay $3,500.

If you want to save money, it makes sense to get a higher deductible as long as you have the money to cover the costs in the event of an accident. The higher your deductible, the lower your premium.

As you determine the deductible that works for you, consider these factors:

income
Household budget
Personal savings
Available credit

Make sure you only agree to what you can really afford. After all, an accident is stressful enough without having to think about paying for repairs.

8. Choose your car insurance provider

Now that you have several quotes to compare, consider what other factors will affect your insurance experience. Just because a company claims to have cheap insurance rates doesn’t mean it offers the best coverage.

Here are some things to look for when you’re evaluating potential companies.

Financial ratings

Find a company’s financial strength rating from AM Best. An excellent rating ensures that the company has the money to pay claims.

Reputation

You can read reviews about the company on the Better Business Bureau (BBB) website or on Consumer Reports. Don’t forget to check the provider’s rating on the BBB, if it has one.

Opinions of family and friends

Talk to people close to you about the companies they use. Find out if claims have been paid and measure their satisfaction level. Hearing how happy your trusted sources are may help you find your next provider.

Coverage conditions

You’ll want to evaluate the different coverages the provider offers. Are there additional benefits to getting a plan through that company? Some providers will bundle benefits like roadside assistance or rental car coverage with your policy.

Expenses

While you want to pay as little as possible for protection, prices that are too low should be a red flag. It’s possible that the company is charging a low price because it’s not paying as much as it claims. On the other hand, there is no logical reason to pay for the most expensive coverage. You need to make sure you choose a reputable company and then get the lowest rate you can.

Discount
An easy way to get the best insurance rates is to look for available discounts. You may be eligible for a insurance discount if you:

Bundle the insurance with other products and services the company offers
Get coverage for multiple cars
Have a clean driving record
Pay for premium annually or bi-annually instead of monthly
Get statement online
Drive a car with anti-theft or safety features
Belongs to a particular organization that is linked to a company
Served in the US Army
Enrolled as a full-time student
Complete a defensive driving course
Be a safe driver
Use anti-theft devices
Claims Process

Read reviews about the claims process to make sure everything goes smoothly when you need it. You often J.D. You can find ratings for specific areas such as claims processing on Power.

9. Buy your car insurance policy

Once you’ve chosen the company you want to work with and you like the quote you’ve received, it’s time to look over the terms before agreeing to anything. While many people will buy insurance without reviewing all of these, it is not wise.

A car insurance policy is a legally binding contract. It may sound confusing, but it is divided into only three sections.

Declaration Page: You will see your name, policy period and premium amount on this page. There will also be a description of the insurance coverage along with the maximum dollar amount the insurer is responsible for.
Insurance Contract: This part of the policy is considered the central part of the contract. It describes what the company is giving you in exchange for your premium. It also states who gets coverage. The provider ensures that everything is clearly defined, so there are no misunderstandings. You’ll want to look specifically at anything that’s excluded from your coverage. You don’t want to find this out when you file a claim.
Policy Terms: This section outlines your liability when you make a claim. It tells you how much time you have to report the claim and what documents you should have ready. The conditions for canceling your policy are also set out in this section. While you can cancel anytime you want, the insurance company has to follow certain rules to drop the coverage.

Most insurance policies can take effect the day you sign and make your first payment. This is especially useful if you’re planning to buy or lease a new car, as most dealerships require proof of insurance before letting you drive off the lot. You can also choose a later date – just tell the insurance agent, so that it is clearly stated on the policy.

If you are buying a new car, keep in mind that you must notify your insurance provider within 7 to 30 days. You may want to review your existing policy to determine how long you have to notify the company about your new car.

When your new policy is in effect and you get proof of insurance, don’t forget to cancel any old policies you may have.

If you haven’t shopped yet, now is the time to shop around and start comparing your personal insurance quotes from different companies.

Methodology

In an effort to provide consumers with accurate and unbiased information, our expert review team collects data from dozens of auto insurance providers to compile a ranking of the best insurance companies. Companies receive scores in each of the following categories, as well as an overall weighted score out of 5.0 stars.

Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
Availability: We consider availability by state as well as exclusions for certain groups of drivers.
Coverage: This rating is based on the types of insurance available, maximum coverage limits and add-on policies.
Pricing and Discounts: Our research team reviews auto insurance rate estimates generated by Quadrant Information Services for different drivers in each state. Companies with low prices and many insurance discount opportunities get the best scores.
Customer Service: We at J.D. We comb through customer reviews and consumer feedback studies from experts like Power.
Technology: With mobile apps, advanced online services and telematics, auto insurers are more likely to meet customer needs.

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How To Buy Car Insurance In 9 Easy Steps (2022)

How To Buy Car Insurance In 9 Easy Steps (2022)

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