If you have a car, you need car insurance. Not only is the law, it’s an important part of protecting yourself. A lot can go wrong when you drive a car, and car insurance ensures that an accident won’t bankrupt you.
Buying car insurance is easier than ever before — by answering a few short questions online about yourself and your driving habits, you can get quotes from several car insurance companies in order to find the best rates and coverage for you.
Here’s how to do it:
- Decide how you want to buy car insurance
- Decide how much car insurance coverage you need
- Fill out an application for car insurance quotes
- Get your quotes
- Vet your quotes
- Pick a car insurance company and get insured
- Cancel your old policy
1. Decide how you want to buy car insurance
There are two ways to buy car insurance:
- Directly from an insurance company
- Through an independent insurance broker
If you already have a renters insurance policy, a homeowners policy, or another auto policy with an insurance company, it may make sense to purchase your new car insurance policy through them as well! You may be able to add your car onto your current policy quite easily or get a discount for having multiple policies with the same insurer. The downside? Your current insurer may not have the best rates, and if you don’t shop around, you could be overpaying.
You can shop around by getting quotes from several insurance brokers, but this involves a lot of legwork (not to mention a lot of emails — each company will want your email to give you a quote). You can technically do comparisons this way, but there’s an easier way.
The easier way is to buy car insurance from an independent insurance broker. (Policygenius is an independent insurance broker.) If you apply for quotes through a broker, filling out one application will result in quotes from several different insurers. Plus, since brokers work with several insurance companies, they can ensure you get the best coverage and the best deal. And because car insurance rates are regulated, you’ll get the same quotes than if you were to contact each carrier directly. Super bonus: if you doalready have a homeowners or renters policy — or are planning to —the broker can offer you the same bundled savings that going directly through a carrier would.
2. Decide how much car insurance coverage you need
There are three steps to deciding how much coverage you need.
1. Familiarize yourself with the types of auto coverage. Auto insurance is made up of several types of coverage. Some are optional, and some aren’t.
- Liability coverage: Pays for bodily injuries or property or auto damages to another motorist if you’re at fault.
- Personal injury protection: Pays medical bills for you and your passengers in case of an accident.
- Collision insurance: Covers damages to your car if it’s involved in an accident.
- Comprehensive coverage: Pays for damage and losses not caused by another car, such from weather, fire, floods, earthquakes, rioting or falling objects from the sky, theft— anything that can cause damage to your car necessitating an insurance claim.
- Uninsured/underinsured motorist protection: Pays for damages caused by another motorist who is uninsured/underinsured.
- Gap insurance: For financed cars, gap insurance will pay the difference between what you owe and what the car is valued at/paid out at in case of a total loss.
- Additional insurance types: Roadside assistance and rental car insurance are two relatively affordable add-ons to complement your auto insurance policy. If you drive for a rideshare company like Uber or Lyft, you may also need rideshare insurance to help protect yourself (or even a commercial auto insurance policy).
2. Consult your state’s minimum coverage requirements. All but two states require car insurance, so you need to know how much car insurance is required in your state.
Most state requirements cap out at $25,000 to $50,000 in coverage, which isn’t enough to protect you in case of a serious accident; you’ll almost certainly want more coverage than required. But these coverage amounts can at least give you a baseline and help you ensure that you’re following the law.
3. Assess your risk. A practical way to determine just how much coverage you need is to use the same criteria insurance companies use when setting car insurance rates! It’s all about assessing risk:
- How much do you drive? (The more you drive, the greater the chance of accidents, the more coverage you want.)
- Are you still financing or leasing your car? (If yes, you probably want gap insurance.)
- Where do you drive and park? (High-traffic areas? Lonely country roads? Do you park on the street in a city with lots of car break-ins? Is your car always safe in a garage?)
- Why do you drive? Is it for personal reasons, business, or both? (If the answer is “business” or “both,” you may need a commercial policy or at least additional rideshare insurance.)
- Who else will be driving your car? (If a teen will be driving, you’ll probably want to increase your coverage across the board.)
3. Fill out an application for car insurance quotes
No matter how you choose to apply for car insurance, you’ll have to answer some questions in order to get accurate quotes.
You’ll need to share:
- The year, make, and model of your car
- Your driving history
- Your marital status
- Your education status, including highest degree earned
- Your employment status, plus your job title
- Names and birthdays of all the people who drive your vehicle
- Ownership info about your car, including lender info if it’s financed
There will also be additional questions that could help you get discounts on your car insurance:
- If you’re a full-time student with good grades
- If you have a clean driving record free of any recent accidents, speeding tickets or insurance claims.
- If you’re a military veteran
- If your car is equipped with an anti-theft system
- If you’ve completed a driver’s education defensive driving or safety course
- If you have any other property insurance policies (like renters insurance or home insurance), and through which carrier
4. Get your quotes
It can take between a few minutes to a few hours to get your quotes back since the broker or carrier has to run your driving history. Once you get your quotes back, you’ll likely see a few options for deductible (the amount you need to pay out of pocket before your insurance kicks in) and premiums (the amount you pay just to have the policy).
Higher deductibles will result in lower premiums, and lower deductibles result in higher premiums. The key is to find the sweet spot of the highest deductible that you can afford so that you can have the lowest premiums.
5. Vet your quotes
It’s not all about price. You’ll get quotes from several companies, and you want to know who you’re dealing with. Reviewing an insurance company’s track record and business reputation is just as important as examining the policy quotes they’ve offered you. The most cost-effective auto insurance policy means nothing if there’s not adequate customer service to go along with it.
So how do you know you’re choosing the right company? There are a few ways to do your due diligence:
- Check out ratings and reviews of the insurer on sites like Trustpilot, Consumer Reports, or the Better Business Bureau.
- Look the insurers up through the National Association of Insurance Commissioners (NAIC) to see if any complaints have been filed against them, if there are any legal or regulatory problems related to their licensing, or if any financial issues come up.
- Check out our list of the best car insurance companies.
6. Pick a car insurance company and get insured
Once you’ve compared your quotes, read up on your potential insurers, and picked a car insurance company that you feel good about it, it’s time to put that policy in force and get insured.
Whether you are getting quotes directly from an insurer or from an insurance broker, you can sign up for the policy through them and know that you’ll be getting the same rate. Also a bonus: both brokers and carriers can offer you discounted rates on other insurance policies through the same carrier, like renters or homeowners insurance.
If you’ve been working through an insurance broker, they’ll either pass you off to a contact inside the insurance company you’ve chosen or they may even be able to sign you up for the policy themselves!
7. Cancel your old policy (if applicable)
If you’ve been shopping for car insurance to replace a current policy, wait until after your new coverage has started before you cancel your old policy! This whole endeavor is about mitigating risk (and saving money) so it’d be terrible to cancel your old policy before you’re covered by your new one!