Almost every state requires all drivers to have car insurance. Without it, you’re prone to significantly higher financial loss whether you’re involved in an accident or your car gets stolen. Insurance protects you, your passengers, and your car in the case of an emergency. If you’re new to shopping for car insurance, it’s important to shop around for the best rate and terms possible. Here’s a comprehensive guide on everything you need to know to buy car insurance.
What is Car Insurance?
A car insurance policy provides financial protection from a variety of losses including bodily injuries, property damage, and medical costs, depending on your specific insurance policy terms. Paying a premium to a car insurance company can spare you from having to pay the high costs that can be incurred following a car accident.
What is a Premium?
A car insurance premium is an amount you pay to maintain your insurance policy. Car insurance companies may require monthly, quarterly, bi-annual, or annual payments to provide insurance coverage. Insurance companies will calculate your premium depending on a variety of factors that may include your credit history, car type, driving history, and the coverages selected.
What is a Deductible?
A car insurance deductible is the amount of money you’ll pay out of pocket after an accident. Generally, low deductibles have higher premiums and vice versa. Some car insurance policyholders can choose to pay low premiums, but risk paying more out-of-pocket after an accident than those who choose a policy with a higher premium. Make sure to work with your insurance agent on the perfect balance of premium and deductible to fit your budget.
How to Buy Car Insurance
It’s never been easier to buy car insurance, even if it’s your first time. You can choose to buy car insurance online, over the phone, in-person, or a combination of all three methods. Regardless of your preference, it’s helpful to shop around for the best price possible. Insurance companies use different factors to determine your rate, so you may find a better deal if you do your homework.
From an Insurer’s Agent or Website
Most car insurance companies are easily accessible by phone or through their website. You don’t need to search for an insurance broker to help you choose an insurance company. While a bit impersonal, online insurance shopping gives you plenty of time to make an informed decision and compare clearly laid out insurance policy options.
Buying car insurance online directly from an insurer’s website gives you the freedom to customize your insurance package and removes the pressure of dealing with an insurance agent. You’re also able to seamlessly look through their insurance coverage options as well as those of competitors’.
Different Types of Car Insurance
Car insurance coverage varies depending on the specific coverage you choose. Knowing the different types of car insurances can help you choose the exact one you need and avoid the ones you don’t. Learn about the different types of auto insurance coverage available and choose the coverage you need.
Some of the different coverages and add-ons include:
Uninsured or Underinsured Insurance
Personal Injury Protection Insurance
Medical Payment Coverage
Miscellaneous (Rental and Roadside Insurance)
State Minimum Coverage Requirements
Car insurance seems like an inevitable and continuous cost everyone has to pay, but some states offer alternatives to insurance coverage and others don’t even require insurance at all. Currently, New Hampshire and Virginia are the only two states that don’t require its residents to buy car insurance, but drivers are still liable for the cost of damages they cause in an accident.
Most states do require you to have car insurance, though each state has different requirements on how much liability insurance you should carry. Most state requirements require maximum liability coverage of $25,000 to $50,000. In extreme cases, the minimum state requirements won’t cover your losses, which is a great reason to get more coverage than your state requires.
Learn more about state-specific required coverage.
Getting the Right Amount of Coverage for Your Car
If you’ve never bought car insurance before, it can seem daunting trying to figure out exactly how much coverage you need. Essentially, you must assess your risk of getting in an accident or other forms of a total loss. Here are a few practical ways to figure out how much car insurance coverage you need.
How Much You Drive
Drivers that drive more than the average miles will have to pay more just because they have a higher risk of getting in an accident. Whether you have a long commute, or you drive for your job, you may pay higher premiums than normal. If you drive sparingly, expect to pay less for insurance.
Financing or Leasing
Financing and leasing means that either the dealership or financial institution is holding an interest in your car that must be paid off. When leasing or financing, it may be a smart move to purchase gap insurance while you owe more on the vehicle than it’s worth.
Where Do You Drive/Park?
Where you drive, live, and park affect your insurance premium. Driving in urban areas makes drivers vulnerable to theft, accidents, and vandalism, which require a higher premium. Additionally, where you park your car affects your rate. Your insurance provider may change your rate depending on if you park your car in a garage or on the side of the road.
Why Do You Drive?
The reason for your driving habits can affect your insurance rate. If you drive for work, your mileage could significantly affect the type of coverage you choose. If you drive for business, you’ll need to buy commercial auto insurance, whether or not you own the car.
Who Else Is Driving?
Before buying your auto insurance, it’s important to know who else will be driving your vehicle. You may need to add family members in your household or anyone else who will be regularly driving your vehicle to your insurance policy.
What Documents Do You Need to Get a Quote?
Now that you have a better idea of what type of insurance coverage you’re looking for, you can fill out an application to receive car insurance quotes. You can do this online, over the phone, or in person. Here are a few pieces of information that you’ll need to keep handy in order to receive an accurate car insurance quote.
Date of Birth of all drivers
Vehicle storage location address
Driver’s License information for all drivers
Driving records of all drivers
Vehicle Identification Numbers of all vehicles to be insured
Insurance history of all drivers
Choosing Your Car Insurance
Depending on how you choose to get car insurance quotes, it may take you some time to decide on which insurance company to choose. Quotes can take some time while your insurance agent checks your information and driving history. After you get your quotes, double-check your deductible and premium rate. Here are a few other things you should do before deciding on a car insurance carrier.
Check Ratings and Reviews
In a world where every service and product has a review, it can be helpful to check on customer reviews and ratings to ensure your company provides excellent customer service. While reviews aren’t the only factor you should consider, they can provide real-world examples of how insurance companies deal with customers.
Check for Complaints at the National Association of Insurance Commissioners
Search the National Association of Insurance Commissioners’ (NAIC) website to see if your insurance company has any outstanding complaints against them. You can filter complaints by coverage, reasons, and final decisions regarding complaints.
Cancel Old Policy After New Coverage Starts
While you can cancel your insurance at any time, you should make sure you don’t incur any cancellation fees. More importantly, you should cancel your old car insurance policy after your new coverage kicks in. You don’t want to be left without coverage, even for just a few days.
Car Insurance Discounts
Car insurance discounts can end up saving you a considerable amount on your premium. Discounts depend on a variety of factors. Car insurance companies won’t let you know if you qualify for a discount, so it’s up to you to ask if your company can offer you a discount on insurance. Here are a few factors that can save you money when you buy car insurance.
Clean Driving Record
A clean driving record can help save you money on your premium. Some insurance companies will offer new or long-time clean drivers a discount or accident forgiveness perks, which prevent your premiums from going up after an accident.
Safety and Security Features
Safety and security features in your car can save you money on your car insurance, as well. For example, front and rear airbags will reduce your bodily injury and car insurance. Other safety features include security alarms, anti-lock brakes, daytime running lights, and automatic seat belts.
Bundling your home and auto insurance can give you a discount on your insurance, if you buy them from the same carrier. If you choose to insure more than your car and home, you may also get deeper discounts. Before you consider bundling your insurance coverages, shop around for the best quote.
After comparing quotes and choosing your car insurance, you can make a more informed decision on what type of coverage you need. If you still have questions about how to buy car insurance, feel free to contact a car insurance representative to learn more about your options. Don’t hesitate to contact an Acceptance Insurance agent to get the lowest quote possible for your vehicle, so you can have peace of mind.