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If you’re new to the world of car ownership, or if you’re navigating the purchase of a car insurance policy for the first time, the process of getting car insurance may seem complicated. It doesn’t have to be, though. With a little research, purchasing a policy is relatively simple. You just need to know where to start.
If you’re not sure how to get car insurance, Bankrate may be able to help. Our insurance editorial team has made it simple to learn the process of buying car insurance, breaking it down to six easy steps. Following these steps could help you feel confident in tackling the car insurance process from start to finish.
How to shop for car insurance
While there are steps you can follow when shopping for car insurance, the specifics of your coverage will be unique to you. Every driver has different needs, wants and considerations. One of the most important things you can do before shopping for insurance is analyze your overall financial picture.
What is your budget for coverage? What kind of car do you have, and what is its value? What is your level of risk tolerance? If you have a low tolerance for risk or cannot afford to pay much out of pocket if you have an accident, you may want to consider full coverage car insurance. Most insurance experts recommend buying as much liability insurance as you can afford, since you could be financially responsible if you cause an accident that costs more than your coverage limits provide.
Having a general idea of the answers to these questions could help you move more quickly through the steps outlined below.
1. Assemble paperwork
The first thing you may want to do is to gather and organize all the paperwork and documentation you will need. This information could vary by insurer, but typically includes:
- Your driver’s license number
- Your date of birth
- Your social security number
- The year, make, model of your vehicle
- Current vehicle mileage
- Vehicle identification number (VIN) of your car
- The routing and account numbers of your checking account for direct payments
- Your current policy declarations page
The auto policy declarations page includes the pertinent details of your coverage, including limits, deductions and exclusions. It will also list your policy number, policy date, premium and discounts you currently receive.
2. Determine coverage type and amount
Before you can apply for auto insurance, you must decide how much coverage to purchase and what optional endorsements you might want. These coverage types can include basic liability, collision, comprehensive, uninsured and underinsured motorist coverage, medical payments, personal injury protection and roadside assistance coverage. The state you live in and the company you choose will affect what coverages are available.
To determine coverage amounts, you can look at your state’s legal auto insurance minimum requirements. You may want more coverage than the minimum, but it is illegal to drive with less. However, you may rest assured that you will not be able to purchase a policy with limits that are below your state’s minimum limits. Still, most insurance agents recommend that you purchase higher liability limits to offer more financial protection. If you have a loan or lease, you will likely need a full coverage policy, which includes comprehensive and collision coverages.
3. Shop around and compare quotes
Now that you know what kind of coverage you want, it is time to find the right insurance company. While many components of auto insurance are similar across the industry, premiums, coverages, discounts and policy features can vary between insurance companies. By knowing the coverage types and limits you want, you can get quotes from multiple companies and see which will offer the best fit for your needs.
If you don’t have the time to shop around, you might consider working with an independent agent. They work with multiple carriers and can get quotes for you. Then, you can review the quotes together to decide which one fits your needs and budget.
4. Fill out an application
Now it is time to contact the insurance company you have chosen and fill out an application. With most auto insurance companies, you can apply in person or online on a company website. Some insurance companies may let you apply by phone or email, as well. Your choice can affect how long the application takes, but the process is relatively quick even if you speak with an agent in person.
Much of the information needed to fill out your application can be found in the paperwork you assembled in step one and the policy specifics you decided upon in step three. Beyond these details, you will need to provide payment information. This is where the voided check or routing numbers come in.
Once the application is complete, submit it and wait for a notification of approval. You will usually receive these notifications by email but may be able to request a phone call. If you are working with an in-person agency, you should be able to talk to your agent to determine if your policy was approved.
5. Pay your first premium
If your policy was approved, you should have coverage as of the effective date you chose in the application step. You likely had to submit your payment information with the application, but in some cases you may be able to wait for approval to pay. Most companies offer numerous ways to pay your premium.
You could set up an automatic withdrawal from your bank account or credit card, you could pay online or you might be able to pay in cash if you go into an agency location. Most policies can be set up on a number of payment schedules, including monthly, quarterly, semi-annually and annually. You might save money if you pay in larger installments.