Tips for first-time car insurance buyers
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Buying your first car is an exciting milestone, but it usually comes with a long to-do list, including getting car insurance coverage. If you’re a first time car insurance buyer, choosing what coverage types to buy and how much coverage you need may feel daunting. These car insurance tips may help you get the right coverage in place to protect your new investment at a price point you can afford.
What do I need to get car insurance?
There are several pieces of information you will likely need to get car insurance. During the car insurance quoting process, you may be asked to provide information about yourself, other household drivers, the vehicle and any past insurance history, if applicable.
Driver information you may need for all household drivers includes:
- Full legal name
- Driver’s license number
- Date of birth
- Social security number
- Ticket and accident history, if relevant
Your age, driving history and ZIP code are factors that may impact your car insurance rates, so insurers may ask for that information to create a quote. Insurance companies may ask for information regarding your driving history, but they also have access to motor vehicle information to verify driving and claims history for yourself and any other drivers listed on your policy.
You will also likely need the following vehicle information:
- Year, make and model of your vehicle
- Vehicle identification number (VIN)
- Date of purchase
The make and model of the car you drive and how many miles you drive may affect your insurance pricing. The VIN could provide valuable information to the insurance company, including any safety features that could earn you a discount.
How to get a car insurance quote
There are several ways to get a car insurance quote. You may choose to get quotes yourself or use a licensed insurance broker to compare your options. Different carriers may offer quotes in person, online or over the phone. No matter how you get a quote, you’ll likely need to provide the information you gathered in the last step. You will also need to select insurance coverage types and limits, which an insurance agent may help with if you are unsure what you need.
Most insurance professionals recommend getting quotes from at least three carriers to compare pricing and coverage options. If you like the quoted premium and coverage selections with a carrier, you can move forward with purchasing the policy. However, the quoted premium may differ from the final price, especially if your claims or driving history brings up a ticket or accident that could affect your rates.
Tips for buying car insurance
In addition to collecting quotes, there are a few more steps in the insurance buying process than could help you ensure you have the right coverage in place. These additional tips may help you navigate your car insurance buying experience.
Decide how much coverage you need
The amount of coverage you’ll need may vary based on your age, where you live, vehicle type, miles driven and personal preferences. Almost all states require a minimum level of liability car insurance and may require other coverage types, like PIP. Insurers will not allow you to buy less than the minimum your state requires. Most insurance experts recommend buying as much liability as you can afford, since it could protect you financially if you cause an accident with injuries or property damage.
In addition to liability coverage, these are other common car insurance types you may be able to add to your policy:
- Collision coverage: Covers damages to your vehicle sustained in a collision with another vehicle or object.
- Comprehensive coverage: Covers your car for damages that are not related to a collision with another vehicle or object, such as hitting an animal, fire, theft, vandalism and falling objects.
- Personal injury protection (PIP): Covers you and your passengers if you sustain injuries in an auto accident, regardless of who is at fault. PIP may also cover funeral expenses and lost wages.
- Uninsured/underinsured motorist coverage: Covers you for damages caused by uninsured or underinsured motorists. In a few states, this may also cover you in the case of hit-and-run accidents. Some states require uninsured motorist coverage.
If you buy your car with an auto loan, the lender will typically require you to carry full coverage car insurance, which includes comprehensive and collision. The lender may also require that you have minimum liability limits that are higher than your state minimums.
Research available carriers
Although price may be important when it comes to choosing car insurance, the carrier you choose will also likely impact your experience. Researching third-party reviews could help you find a carrier with strong customer satisfaction and financial strength ratings.
You might consider third-party ratings from institutions like these:
Most insurance professionals agree that the best car insurance companies include those with excellent financial strength, above-average J.D. Power customer satisfaction scores and a below-average NAIC complaint index score.
Compare coverage options
In addition to the most common car insurance coverage types, you may find carriers that offer other valuable add-ons. These add-on coverage options, commonly called insurance endorsements, may allow customers to tailor their policy to their specific needs.
For instance, you may be eligible for accident forgiveness if you have been claim-free for a certain amount of time, usually three to five years. If you drive for Lyft, Uber or other rideshare companies, you may want to explore rideshare insurance. Those with auto loans may want to consider gap insurance, which pays the difference between a totaled car’s value and the loan amount, if the loan amount is higher.
Ask about discounts
One way you could potentially save on your car insurance is through discounts. Most carriers offer at least a couple discounts that might save you a bit on your premium if you qualify.
Some of the best car insurance discounts include:
- Bundling discounts: You might earn a discount if you have an auto insurance policy and another type of insurance policy, like homeowners insurance, with the same carrier.
- Vehicle safety discounts: Some carriers extend a discount if your vehicle has additional safety features like running lights or curtain airbags.
- Safe driving discounts: You might be eligible for a discount if you have no accidents or moving violations on your record for several consecutive years.
- Paperless and paid-in-full discounts: Many carriers extend a discount for simple strategies like opting for paperless billing or paying your premium in full.
- Good student discounts: If you are a full time student in good academic standing or insure one on your policy, you might earn a discount.
Compare quotes from multiple carriers
Most insurance experts recommend comparing quotes from multiple carriers when shopping for auto insurance. Insurance companies may have different car insurance rates, coverage options and discounts, so comparing quotes may help you find the cheapest company for your individual insurance needs.
To determine which company offers the best rates, consider comparing the same coverage types, limits and deductibles across multiple carriers. This may give you an idea of which company offers the lowest price for the coverage you need.
Frequently Asked Questions
Car insurance rates may vary based on a driver’s age, driving record, vehicle type, coverage needs and more. The cheapest car insurance provider for you may be the one that offers low average premiums and several discounts that you qualify for.
There may be several reasons why car insurance can be expensive for first-time buyers. Auto insurance rates may vary not only by state, but also by city, as factors like population density and crime rates may factor into insurance costs. Your age and driving history may also make car insurance expensive, especially for young drivers with little experience. A licensed insurance agent may be able to provide more specific details if your car insurance rates are high.