As of 2019, more than 100 million privately registered cars are on the roads. Most of these vehicles are likely to be insured as a result of the law in most states. As a first-time buyer of car insurance, it can be difficult to understand the differences between insurance quotes and what coverage you need. It is helpful to have some basic tips on how to shop around for the best coverage for you and your car.
What you need in order to obtain car insurance
You will need to gather the necessary information from your car insurance company before you can get a quote. The following information can be divided into the following categories:
- Driver (or drivers’) information
- Information about your vehicle
- Information about insurance
If you plan to drive the car frequently, you will be asked for personal information. These include driver name, birth date and driver’s license number (including the place it was issued). Be prepared to answer any questions regarding your driving record, including information about prior accidents and license suspensions. If you have recently completed a safe driving course, an insurer might be interested.
The information needed to identify your vehicle is fairly straightforward. Most auto insurers want to know the year, make, and model of your vehicle as well as its VIN. Other questions could include the year the vehicle was purchased, its registered owner, where it is stored, and the mileage.
Insurance companies will ask about prior coverage. This includes the date and carrier. If this is your first car insurance purchase, however, you will need to provide information about the time you were covered by a parent’s policy. Most providers don’t allow you to have your own policy until you turn 18.
How to get car insurance quotes
Even if you have all the information needed, it should be easy to get car insurance quotes even if you are a first-time buyer. While you can visit an agent in person, most insurers (large and small) allow customers to obtain quotes online. This is possible because they only require the information mentioned above. Insurers can provide you with personal information, such as your name, ZIP code, and information about your car such as make and model. They will then give you an estimate of the annual cost of insurance.
It may be beneficial to take the time to review all of the coverage options and add-ons available to your policy to ensure you get the best possible quote. It is important to research the different providers and their coverage options to help you make an informed decision.
Moreover, if you are submitting multiple quotes, ensuring that the same information is entered on each company’s website could make it easier to compare the prices. If you include collision and comprehensive coverage but not others in your quote, the difference in the rates you get could range from a few hundred dollars to several thousand.
Once you have submitted a quote, an agent will contact you to confirm your coverage and finalize your premium. Many insurance companies offer the option of speaking with an agent over the telephone.
Find out the minimum requirements for car insurance in your state.
Many states require drivers to have minimum coverage for bodily injury and property damages. Every state has its own liability limits. These include different amounts for property damage and bodily injury. These limits can vary from one state to the next and may change over time so it is worth checking out your state’s requirements.
However, the minimum coverage required by your state may not provide adequate financial protection. If you are involved in an accident, and don’t have collision coverage to cover your car’s repairs, you may still be responsible for large amounts of money. You might not be able to pay for the severe injuries sustained by passengers or drivers in an accident if your policy is bare-bones.
How much coverage do you require?
Your age, your location, vehicle type, mileage driven, credit score, and other factors will all affect the amount of coverage that you need.
Auto insurance policies offer more than just liability coverage. They also provide additional coverage options.
- Personal injury protection (PIP), covers you and your passengers in the event that you are injured in an auto accident. This coverage can cover funeral expenses as well as lost wages. This coverage is different from your bodily injuries coverage, which covers the costs of other drivers in an accident.
- Uninsured, underinsured motorist coverage covers you for damage caused by uninsured and underinsured drivers. You are also covered in the event of hit-and run accidents. Uninsured motorist coverage is required in some states.
- Collision insurance covers you for damage to your vehicle, truck, or SUV that you cause in an accident with another vehicle or object.
- Comprehensive insurance protects your car against many damages not caused by a collision with another vehicle.
Other optional coverages are offered by some insurers. These include rental car insurance and gap coverage. This can help you repay your car loan if your vehicle is totaled. Every insurance company offers different options, so make sure you check with each one to see the available coverages.
You will likely need collision and comprehensive insurance if you have a large auto loan.
Look around to find the perfect fit
Although first-time auto insurance buyers may think that every insurer will offer the same coverage and premiums as the others, this is not true. It is important to shop around for the best car insurance policy that suits your needs.
Although it is possible to find the most affordable auto insurance, it can be time-consuming. Quotes can vary greatly from one company to the next.
You should also consider factors like the financial stability and customer service quality.
How to get discounts on premiums
When determining your premium rate, the underwriter of your policy takes into account multiple factors.
Laura Adams, an insurance expert, says that many people are unaware of the factors that affect their car insurance rates. Your age, gender and marital status are all important data points.
There are many factors that can affect your premiums. However, there are still ways to save money. Adams says that first-time car buyers might not realize how much they can save by qualifying for discounts. The insurance company will determine what discounts are available. It’s important to inquire about these discounts and work towards obtaining more.
Adams concludes that “the best auto insurance tips for you are to shop multiple carriers and to be proactive about looking into possible ways to save money on your insurance.”
Raise your deductible
You can save big on your premiums if you are willing to take on more risk and pay more in-pocket for an accident or damage to your vehicle. The Insurance Information Institute suggests that raising your collision and comprehensive deductible from $200 up to $1,000 could help reduce your premiums by as much as 40%.
Some coverage can be dropped
It might not be a good idea to have expensive insurance if you own an older vehicle or a cheap used car. It’s not worth paying more than 10 times your car’s value for collision and comprehensive coverage.
Consider less coverage
People who own an older car or a less valuable vehicle decide not to spend as much money on their insurance. They may choose to cancel certain coverages, such as collision and comprehensive, in these cases.
Add safety features to your car
Your insurance company is also at risk if your car is stolen. Your insurer may offer a discount if you have anti-theft devices such as tire locks, steering-wheel locks, and electronic tracking systems. These devices are expensive upfront, but they can be quickly paid for.
If you are able to drive safely, auto insurers will reward you with lower premiums. You may be eligible for discounts if your driver training course is completed. You can receive a larger discount the longer you wait before you file a claim or get into an accident.
You may be eligible to receive a low-mileage discount if you are retired, or work remotely. The minimum mileage you must travel is usually 7,000 miles per annum, though this can vary from insurer to insurer. You might be able lower your premiums if you are able to use carpooling, biking, walking and public transport, or work from home.
You can pay in monthly installments
Many insurers offer discounts if you pay for a whole year of coverage at once rather than monthly.
If you fall behind in your monthly payments, there may be late fees. This risk can be avoided if you pay in one lump sum.
Paperless billing and auto payment
Paper billing is expensive and requires you to purchase physical products. It also takes up a lot of insurance company resources. It’s not surprising that some insurance companies offer discounts for reducing the paperwork they need to handle and streamlining your payments.
Your credit score is a major factor in car insurance companies determining your premiums. This means that you can reduce your monthly costs by improving your credit score. You can improve credit by paying your bills on time, understanding how credit utilization affects you score, being smart with credit card applications and monitoring your credit reports for fraud.
Get good grades
Adams states that students who earn good grades are eligible for discounts. Adams says that many students and parents in high school, college, and graduate school might not know about the savings. Typically, if you have a 3.0 GPA or higher you will receive a substantial discount.
Bundle your policies
Adams says that bundling policies (such as auto, home, or renters insurance) is a great way to save money. Numerous companies offer discounts if you have multiple policies with the same company. It might make sense to have car insurance with the same company if you already have home insurance.
Most Frequently Asked Questions
Which insurance company offers the lowest rates?
You won’t find the best car insurance company for your first car purchase. Your rates will differ from one company to another, so you should get multiple quotes. You may find the lowest car insurance provider that offers multiple discounts that you are eligible for. It might be worthwhile to look into smaller local providers.
What type of car insurance do you need?
The majority of U.S. states require that you have at least the minimum liability coverage. While limits vary from one state to the next, state motor vehicle websites can be a great resource for keeping up to date. Higher liability limits are recommended by insurance experts to give you more financial protection in case of an expensive accident. You may want to add collision and comprehensive coverage to your vehicle if it is older. If you owe money, your lender may require it.
How can I make sure I get the best car insurance deal?
Customer service is the best. J.D. Consumer Reports, J.D. Power and the Better Business Bureau are some of the organizations that rate customer service. It is also important to assess the financial stability of your insurance company, which is monitored and evaluated by companies like Standard & Poor’s, Moody’s, AM Best and Moody’s. These ratings are often displayed on the websites of many insurers.