Before you allow your auto policy to renew, check out our tips on how to get great car insurance.

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As drivers on the road, we all need to have car insurance, but does it matter what kind you buy? When it comes to car insurance companies, there’s no lack of providers to choose from. 

Between making that choice and deciding what insurance coverage you need, you have a lot to think about. That’s why we’ve put together a comprehensive guide on how to buy car insurance.

In this article, you will learn about the various coverage options available to you. We will also discuss how much coverage you need and how to start a policy. Finally, we will help you get the best insurance rates with a few tips and tricks.

To make the decision process even easier, we’ve already run through industry leaders in our best car insurance providers review – considering factors such as cost of coverage, customer satisfaction, and the ease of the claims process.

 

To start, fill out this quick form to compare policies:

In this article:

Car Insurance Coverage Explained

The Insurance Information Institute suggests that you should learn about all of the types of coverage mandated by your state and the required coverage amounts. Because each state has different laws, you want to make sure your policy complies.

Let’s take a look at the various types of car insurance coverage you could sign up for.

Mandatory Coverage

Most states require the following liability insurance:

  • Body Injury Liability: With this coverage, the costs related to injuries or death that you cause to the other party are covered.
  • Property Damage Liability: With this coverage, any damage that you cause to another vehicle, building, or property is covered.

Often Required Coverage

Some states will mandate the following coverages, as well:

  • Personal Injury Protection (PIP)/Medical Payments (MedPay): This coverage reimburses any medical expenses for your injuries or those of your passengers. With this plan, you can also receive payments for lost wages and related costs.
  • Uninsured Motorist: If an accident is caused by a motorist without insurance, this policy covers the damages. It’s also the policy that’s used in a hit-and-run incident.
  • Underinsured Motorist: This plan covers your costs when the driver that hits you doesn’t have adequate coverage.

Optional Coverage

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

Collision: This coverage reimburses you for any damage done to your car that results from colliding with an object or another vehicle, as long as you are at fault. Many creditors require you to carry this coverage when you owe money on the car.

Comprehensive: This coverage takes care of the damage caused by an incident other than an accident. It covers theft, fire, flood, hail, vandalism, falling trees, and other hazards. Many creditors also require you to carry this coverage when you owe money on the vehicle.

Glass Protection: It’s common to experience windshield damage, so this auto policy includes protection not only for the front window but also sunroofs, rear windows, and side windows.

GAP Insurance: If you finance or lease a vehicle, you will want to look into Guaranteed Asset Protection (GAP) coverage. Because comprehensive and collision only cover your vehicle at market value, it may not be enough to pay off the car loan if your car is totaled. GAP insurance pays the difference, so you don’t owe the creditor anything after a complete loss.

How Do Insurance Deductibles Work?

An insurance deductible is the amount of money you agree to pay toward covered repairs. As an example, if you get into a car accident and the repairs are going to cost $4,000, but you have a $500 deductible, you will be responsible for paying the $500 and your insurance company will pay $3,500.

If you are looking to save money, it makes sense to have high deductibles, as long as you have the money to cover the expense should it occur. The higher your deductible is, the lower your premium will be.

As you determine the deductibles that work for you, consider these factors:

  • Income
  • Household budget
  • Personal savings
  • Available credit

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

How Much Coverage Do You Need?

Now that you understand the various plans available to you and deductibles, it’s time to think about the coverage amounts. Most liability coverage is mandated to be a certain amount by your state. You can find a complete breakdown on the Insurance Information Institute website.

The amounts shown next to your state are what you are legally required to have. But it isn’t always wise to go with the bare minimum coverage. You must ask yourself what level of personal risk you are willing to take.

Insurance protects your assets. If you don’t have enough car insurance and cause severe injuries to someone, you will be personally liable. Even if you don’t have the money, you could be sued and have to pay for the damages out of your future assets. Are you willing to take that risk?

How To Buy Car Insurance

When you are ready to get car insurance, you have several options available. If you already have renters or homeowners insurance, you might choose to stick with the same company. Sometimes, the provider will offer a discount to bundle policies.

Other than that, you must determine what type of company you want to work with.

Type Pros Cons
Direct Provider

No need to find a broker

Simple quotes available online

Ability to set up coverage on your own

Low pressure

No personal relationship with one agent

Online quotes are sometimes estimates

Insurance Agent

Long-term relationship with one person

Ask your agent questions

Limited offerings since the agent only works with one company

Possibility of hard selling tactics because agents work on commission

Independent Broker

Variety of quotes and coverage options

Top brands available through brokers

May be charged a brokerage fee

Agents work on commission

 

Once you know what type of coverage you want, you are ready to fill out the application.

Be prepared to share the following information:

  • Names for all drivers
  • Dates of birth for all drivers
  • Driver’s licenses and social security numbers
  • Vehicle identification numbers (VINs) for all covered vehicles
  • Address where you reside and where the cars are located
  • Your current auto insurance policy

You will likely want to answer any additional questions asked of you to see if you qualify for any discounts.

The Cost Of Car Insurance

The car insurance rates you receive depend on a few factors, including:

  • Driving records of insured
  • Age of insured
  • Types of vehicles driven
  • Credit scores
  • Annual driving mileage
  • Where you reside
  • Chosen deductible
  • Coverage level

Understandably, the insurance premiums rise if you’ve been involved in accidents or have had moving violations. These incidents increase the risk to your insurance company. It’s also essential for the company to analyze the car you drive, not just for risk, but also to determine the cost of replacement parts. Luxury cars and sports cars tend to have higher premiums.

Your credit score is also taken into account. The insurance providers use a picture of your history to determine if you are likely to file a claim. Higher-risk drivers pay larger premiums.

Additionally, you will pay more if you live in a particular region. The most expensive states to live in include New Jersey, Louisiana, and New York. If you live in Idaho, Iowa, or North Dakota, you can expect to pay the least. Some states are also known for raising the rates much higher after an auto accident.

As you evaluate the car insurance quotes you receive, don’t forget to look for available discounts. You might be able to grab a lower rate if you:

  • Bundle insurance with other products and services the company offers
  • Receive coverage for multiple cars
  • Have a clean driving record
  • Pay for the premium by the year or biannually rather than monthly
  • Receive online statements
  • Drive a car with anti-theft features
  • Belong to a particular organization that’s affiliated

Don’t choose an insurance provider solely on the car insurance discounts that are offered, but look at the whole picture.

First-Time Driver Insurance Coverage

Do you know how to buy car insurance as a first-time driver? The process is much the same, but you need to be prepared for higher-than-normal rates. First of all, you don’t have any experience driving, so the provider must assume you are high-risk until you prove yourself otherwise.

Secondly, you have no previous history (and sometimes no credit history, if you are young), which further backs up the claim that you are high-risk. Until you drive without a claim for several years, you can expect to pay more. As you get older and operate a vehicle without any incidents, you can begin to receive the benefits from your safe driving.

How To Shop For A Car Insurance Provider

You may know how to get car insurance, but do you know who you can trust? You don’t just continue to use a provider because that’s who you have always used. You must do your research to ensure you have the best coverage at the lowest rates.

Whether you are looking to change your policy during the renewal period or you are planning to buy a car, it makes sense to shop around.

Here are some things to look for as you evaluate potential companies.

Company Information

You can use the consumer information resources provided by the National Association of Insurance Commissioners to find out more about various providers. The information provided includes closed insurance complaints, financial data, and licensing information. You can find further details by visiting your state’s department of insurance to look at rates and consumer complaints.

Financial Ratings

Search for the company’s financial strength ratings from AM Best. An excellent rating ensures that the company has the money to pay out 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 BBB, if it has one.

Opinions Of Family And Friends

Talk to the people closest to you about the companies they use. Find out if claims have been paid and gauge the satisfaction level. Maybe you will find your next provider by hearing about how happy your trusted sources are.

Coverage Terms

You want to evaluate the various coverages that the provider offers. Are there additional perks to receiving a plan through that company? Some providers will bundle perks such as roadside assistance or rental cars with your policy.

Cost

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 less because it isn’t paying out on claims like it should. On the other hand, there’s no logical reason to pay for the most expensive coverage. You need to know that you have chosen a reputable company and then get the lowest rate you can.

Claims Process

Read reviews about the claims process to ensure everything runs smoothly when you are in need. You can often find ratings for specific areas like the claims process on J.D. Power.

How Do You Read An Insurance Policy?

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

The car insurance policy is a legally binding contract. It might look confusing, but it’s just broken into three sections.

Declarations 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.

Insuring Agreement: This part of the policy is considered the central portion of the contract. It describes what the company is giving you in exchange for your premium. It also states who receives coverage. The provider ensures that everything is clearly defined, so there is no misunderstanding. You want to specifically look at anything that’s excluded with your coverage. You don’t want to find this out when you file a claim.

Conditions of the Policy: This part illustrates your responsibility when you make a claim. It lets you know how much time you have to report the claim and what documentation you must have ready. The terms for canceling your policy are also set forth in this section. While you can cancel anytime you want, the insurer has to follow certain regulations to drop coverage.

Keep in mind that you must notify your car insurance provider within seven to 30 days after purchasing a new car. You will want to review your existing policy to determine how long you have to inform the company about your new car.

Our Recommended Providers For Car Insurance

Now that you know how to get car insurance, it’s time to receive some quotes. We’ve already vetted several companies to ensure you have the protection you need. Here’s a closer look:

USAA

After reviewing more than 30 popular car insurance providers, USAA was the only company to warrant a perfect 5.0 rating in our book. Reasonable rates, excellent customer service, and availability of discounts make it our top choice for military service members and their families.

In the 2019 J.D. Power Auto Insurance Study, USAA earned 5 out of 5 in every category in a number of regions including New England and California. Some of the provider’s discounts are specifically for current military service members. The downside, of course, is that USAA is only available to a select group of drivers. You’ll need to verify your connection to the military before receiving a quote.

Best for Military Families

★★★★★

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Our best overall pick: Offers great customer service to military members and their families.

 

Geico

You’re probably already familiar with Geico, thanks to the provider’s gecko mascot. But Geico lives up to its reputation with excellent financial stability and high ratings for customer satisfaction. One of the largest car insurance companies in the country, it’s available in every state, and you can obtain a quote quickly and easily by calling in or visiting the website.

Discounts are available for safe drivers, among other things, and the company’s smartphone app makes it easy to instantly file claims. Overall, we give Geico 4.5 out of 5 stars.

Best Company Overall

★★★★★

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Our 2nd favorite and best for those ineligible for USAA: Offers competitive pricing and great coverage.

 

Progressive

Progressive is another household that is deserving of its fame, partially due to its Name Your Price®  tool that allows cost-conscious drivers to compare coverage options side-by-side. An extensive selection of coverage and reasonable rates make it one of our top choices when it comes time to buy car insurance.

Along with coverage for your vehicle, you can insure your motorcycle, boat, RV, home, rental property, and more with Progressive. There are also options for rideshare coverage and coverage for custom parts and equipment. All in all, Progressive warrants 4.5 stars from us.

Great for Discount Bundles

★★★★★

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Our 3rd best overall pick: Offers a number of ways to get a discount, including the Snapshot tool or bundle options.

 

State Farm

Tied with Geico and Progressive with 4.5 stars, State Farm was at the top of our list for great discounts and positive customer service experiences. Along with basic options for coverage, you can get rideshare insurance, coverage for car rental and travel expenses, and roadside assistance with State Farm.

Discounts are available for everything from safe driving to insuring multiple vehicles. When you bundle your home and auto insurance with State Farm, you can see savings of up to 17 percent. The provider also insures motorcycles, boats, ATVs, and motorhomes.

Most Popular Car Insurer in the U.S.

★★★★★

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Our 4th pick: Most popular auto insurance company that services over 83 million policies.

 

Gallery: Three Ships Images