How to Buy Car Insurance: Everything You Need to Know

Shopping for and buying car insurance for your vehicle can be a confusing process. You need to know about the common types of car insurance, what kind of policy your state requires and how much coverage you actually need.

But once you know what you’re looking for, it’s time to purchase auto insurance. Luckily, obtaining car insurance is easier — whether buying direct from the insurer online or on the phone, or through an agent or broker.

So, whether you are getting your first car or updating an insurance policy, we’ll help you understand the choices, so you can choose what works best for you and your situation.

Things to Know Before Buying Car Insurance

Car insurance rates vary from company to company. There are many important factors that can increase or decrease insurance rates. According to Insurance.com, a good driver with good credit pays an average of $1,555 annually for full coverage car insurance.

However, what the average American pays annually for their automobile insurance depends on several factors. The two most important personal factors are your credit score and your driver profile and history.

For example, have you ever been in an accident or received a speeding ticket? This will affect your car insurance rates. Also, drivers younger than 25 years old pay higher rates because of their inexperience.

There are many other factors you should be aware of before buying car insurance. For example, did you know that adverse climate conditions can affect your insurance rates?

Many insurance companies use risk formulas to assess potential clients and use other important factors, many unknown to drivers.

That’s why it’s smart to shop around before you settle and buy car insurance.

The Main Components of a Car Insurance Policy

One of the first steps is understanding what you are paying for when you purchase car insurance. After all, you don’t want to spend too much or too little on insurance if the coverage doesn’t make economic sense or doesn’t fully protect you in any and all instances that could happen.

Check out these common types of car insurance coverage:

  • Liability coverage: This common type of car insurance coverage is mandatory in most states, except Virginia and New Hampshire. You must have at least the minimum liability coverage. If you drive without it, penalties will follow.
  • Collision coverage: This is optional coverage, but your lender or leaseholder might require it from you. Its main role is to cover the damage dealt by you to other vehicles or objects.
  • Personal Injury Protection coverage: Check your state’s insurance requirements for personal injury coverage because several states, including Florida and New York, require drivers to carry minimum coverage due to “no fault” laws. This insurance covers your medical bills and those of any passengers in your car regardless of fault. It also pays for lost wages.
  • Uninsured and underinsured motorist coverage: As the name implies, this insurance covers your loss if you get hit by a driver who has little or no insurance coverage. By adding this coverage to your policy, you get medical or car repair compensation in the event of an accident.
  • Comprehensive coverage: Typically, this is optional coverage but if you are buying your car with a loan or lease, your lender may require it. Comprehensive coverage helps you to cover damages from fire, vandalism, theft, and more.

The Easiest Ways to Buy Car Insurance

Many people wonder what the easiest way to buy car insurance is and the answer is, it depends if you prefer to buy it online or on the phone. You can also buy through an agent or broker.

Here are some tips:

  • Shop around. Check out this 2019 list of top 10 insurance companies in the United States by marketshare from Insurance Business magazine, which used data from the National Association of Insurance Commissioners.
  • It’s quick to buy direct. If you choose to get your car insurance directly from the insurer, it’s easy to obtain a quote online or on the phone for car insurance. Then you can compare several different insurance quotes and find out which policy suits you and your needs best.
  • Check insurance agent or broker ratings. If you prefer face-to-face connections or your insurer requires that you work with an agent, check out the reviews on Google and check your state insurance commissioners’ website.
  • Look for other company reviews. Make sure to research each insurance company not just agents or brokers if you choose to work with them. Check online consumer reviews to know the pros and cons of dealing with each large insurance company before you buy.

Shop for Car Insurance Before Going to Car Dealers

Many people wonder, do you buy a car first or the insurance?  The best thing to do is shop for car insurance ahead of going to a car dealership or before buying a new car or purchasing a used car.

If you want to shop for insurance before owning a car, ask the dealership or car owner for the vehicle identification number, or the VIN of the vehicle you have in mind, so you can obtain more accurate quotes for insurance.

If you’re financing the vehicle, car dealers will ask for proof of insurance before you get the keys to your new car.

Can you get car insurance from your car dealer? Of course. But it’s not recommended in most cases. Many dealers work with specific companies and their interests may not align with yours.

How Can You Save With Your Car Insurance?

What is the best way to save on your car insurance? Ask about discounts and you can inquire every time you speak with your insurance issuer.

What is the easiest way to get a discount on your car insurance? Well, if you own a home or more than one car, you can bundle them together with the same insurer. This is one of the biggest discounts you can find. But check your eligibility for others, too, including if you served in the United States military.

It’s Time to Shine!

No matter how you choose to buy your car insurance, make sure to weigh multiple options.

And don’t forget: The biggest present you can give to yourself and those around you is safety and protection. That is to drive safely and buy insurance for protection. And don’t forget that when you drive safely, you’ll pay less for car insurance.

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