Shopping For Car Insurance: A Step-by-Step Guide

 Shopping For Car Insurance: A Step-by-Step Guide



When it comes to finding the best car insurance, having the right information and strategy can make all the difference. This guide will walk you through each step of the process, from gathering your information to purchasing a policy. Plus, learn how to ensure you're not overpaying by comparing rates.

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Written by Daniel Robinson | Edited by RaShawn Mitchner

In This Guide:

  1. Gather Your Information
  2. Decide What Coverage You Need
  3. Choose How to Get a Quote
  4. Compare Car Insurance Quotes
  5. Purchase a Policy
  6. How Much Does Car Insurance Cost?
  7. How to Save on Car Insurance
  8. The Bottom Line on Shopping for Car Insurance
  9. FAQs About Car Insurance Shopping

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Step 1: Gather Your Information

Before you start shopping for car insurance, it's essential to gather all the necessary information. Most insurance companies will ask for the following details:

  • Personal Information: Your name, birth date, address, and years at your current address.
  • Vehicle Details: Your car’s VIN, make, model, year, mileage, and safety features.
  • Driving History: A record of your driving history over the past three to five years, including any tickets or at-fault accidents.
  • Current Insurance Information: Details of your current insurance provider, coverage levels, and the birth dates of those listed on the policy.
  • Additional Information: Driver’s license numbers and names of any household members excluded from your policy.

Having these details ready will streamline the process of getting a car insurance quote.

Step 2: Decide What Coverage You Need

Determining the type and amount of coverage you need is crucial. Each state has minimum requirements for bodily injury and property damage liability coverage. While you can't opt for less than the state minimum, it's often wise to consider increasing your coverage. Here are some common types of coverage:

  • Liability Insurance: Covers medical and repair costs for others when you're at fault.
  • Collision Insurance: Pays for damages to your car from accidents, regardless of fault.
  • Comprehensive Insurance: Covers non-collision-related incidents, such as theft or natural disasters.
  • Underinsured/Uninsured Motorist Coverage: Protects you if the at-fault driver lacks sufficient insurance.
  • Medical Payments Coverage (MedPay): Covers medical expenses after an accident.
  • Personal Injury Protection (PIP): Covers medical expenses, lost wages, and more, often required in no-fault states.

Consider Lender Requirements

If you have a car loan, your lender will likely require full-coverage insurance, which includes liability, comprehensive, and collision coverage. Check your loan documents or contact your lender to understand their requirements.

Gap Insurance

If you owe more on your car than its current value, gap insurance can cover the difference in the event of a total loss.

Roadside Assistance

Many insurance providers offer roadside assistance as an add-on. This service can cover towing, fuel delivery, lockout services, and more. If your car is still under warranty, check to see if you already have roadside assistance included.

Step 3: Choose How to Get a Quote

There are several ways to obtain car insurance quotes:

  1. Contact an Insurance Company’s Agent: These agents represent one company and can provide in-depth knowledge about their products. However, they won't compare other companies for you.

    • Pros: Personalized service, in-depth knowledge of specific company policies.
    • Cons: Limited to one company's offerings.

  2. Use an Insurance Broker or Independent Agent: These professionals can provide quotes from multiple insurers, helping you compare options.

    • Pros: Access to multiple companies, potential for better rates.
    • Cons: Possible bias towards higher commissions.

  3. Get a Quote From a Company’s Website: Direct online quotes can be quick and straightforward.

    • Pros: Instant quotes, potential discounts for online purchases.
    • Cons: May not cover specialized insurance needs.

  4. Use an Online Comparison Tool: These tools aggregate quotes from various insurers, allowing for easy comparison.

    • Pros: Quick comparisons, multiple quotes from one form.
    • Cons: Limited assistance for unique insurance needs.

Quote Tip: Be Honest

Always provide accurate information when requesting quotes. Misleading information can lead to rate changes or policy cancellation later.

Step 4: Compare Car Insurance Quotes

After obtaining quotes, compare them to find the best rate and coverage for your needs. Look for companies that offer discounts that match your situation, such as good student discounts or bundling policies.

Find the Right Discounts

Discounts vary by company and can include multi-car, bundling, safe driver, and more. Investigating different discounts can save you a significant amount.

Usage-Based Insurance

Some companies offer telematics programs that track your driving habits and reward safe driving with discounts. Consider these options if you have a good driving record.

Pay-Per-Mile Insurance

If you don’t drive frequently, pay-per-mile insurance might be a cost-effective option. This type of insurance charges a base rate plus a cost per mile driven.

Step 5: Purchase a Policy

Once you've selected the best quote, it's time to purchase your policy. Many insurers offer same-day coverage. Ensure there is no lapse in coverage by overlapping your old and new policies by at least one day.

Avoid a Lapse in Coverage

Even a short lapse can increase your future premiums. Schedule your new coverage to begin before canceling the old policy.

How Much Does Car Insurance Cost?

Car insurance costs vary widely based on factors like age, driving history, and coverage levels. Here's a quick look at average costs:

Average Full-Coverage Car Insurance Cost

  • Nationwide: $119/month
  • USAA: $126/month
  • Progressive: $169/month

Average Minimum-Coverage Car Insurance Cost

  • Auto-Owners Insurance: $30/month
  • Geico: $38/month
  • Allstate: $71/month

How to Save on Car Insurance

  • Improve Your Credit Score: A better credit score can lower your rates.
  • Raise Your Deductible: Higher deductibles can lower your premium but ensure you can afford the out-of-pocket cost if needed.
  • Bundle Policies: Combine car insurance with other types, like home insurance, for a discount.
  • Shop Regularly: Compare rates at each renewal to ensure you’re still getting the best deal.

The Bottom Line on Shopping for Car Insurance

Shopping for car insurance involves comparing multiple providers to find the best rate and coverage. By gathering your information, choosing the right coverage, and comparing quotes, you can secure a policy that meets your needs and budget.

Top Auto Insurance Recommendations

  • Travelers: Best for most drivers with flexible coverage options.
  • State Farm: Offers excellent customer experience and competitive rates.

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