How To Get Car Insurance (5 Easy Steps) – Forbes Advisor

October 28, 2022

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When you buy a new car, chances are you’ll spend a fair amount of time shopping around to find the best ride at the right price. buying car insurance should work the same way. Unfortunately, too many car owners skip this crucial step and end up spending more money than they should.

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Auto insurance prices can vary widely from company to company for exactly the same coverage. If you want to find the best car insurance at a reasonable price, here’s how.

Reading: How to obtain car insurance

1. collect driver and vehicle information

Here’s the information you’ll need to start an auto insurance shopping journey:

Basic information such as your name, address, and date of birth for each driver on the policy
driver’s license information for each driver on the policy
vehicle information, including year, make, model, vehicle identification number, and current odometer reading
driving history of all drivers listed on the policy, including at-fault accidents, traffic violations, and any completed safe driving courses
your current insurer (if you have one), including their current coverage limits

2. determine how much auto insurance you need

Before you buy an auto insurance policy, the first step is to find out how much auto insurance you need. if you buy too little coverage, you could be underinsured. but if you buy too much, you will be paying more.

Here are some common coverage types you’ll want to consider.

civil liability insurance

If you cause a car accident, liability insurance pays for property damage and third-party injuries, such as car repair bills and medical expenses. It also covers legal expenses if someone sues you for an accident.

Most states (except New Hampshire and Virginia) require you to carry a minimum amount of auto liability insurance. For example, in New York, all drivers must have minimum liability limits of 25/50/10, which means:

$25,000 for bodily injury to one person ($50,000 per death)
$50,000 for bodily injury to two or more persons ($100,000 per death)
$10,000 for property damage

But here’s the rub: The minimum amounts of liability insurance required by states are generally inadequate. For example, if you purchased the minimum amount in New York and caused a car accident resulting in multiple injuries and more than $50,000 in medical bills, you would be liable for the amount greater than $50,000.

A good rule of thumb is to purchase enough liability insurance to cover what you stand to lose in a lawsuit.

uninsured motorist coverage

Not all drivers purchase liability insurance, even if they are required to. And some drivers have liability insurance, but not enough to cover a costly car accident. So what happens if an uninsured or underinsured driver hits you?

Uninsured Motorist Insurance (UM) and Underinsured Motorist Insurance (UIM) pay your medical bills and other expenses, such as lost wages, funeral expenses, and pain and suffering.

some states require um. other states offer um as optional coverage (you can decline coverage in writing). Even if um isn’t required in your state, it’s generally good coverage if it’s available to you.

collision and comprehensive insurance

If you want coverage for auto repair bills for your own vehicle, you’ll want to purchase comprehensive and collision insurance. Although these types of coverage are often sold together, they cover two different sets of problems:

Collision insurance helps cover repair bills for your car in the event of accidents, such as hitting another car or hitting a pole. If someone else crashes into you and is responsible for repairs to your car, you can file a claim on their liability insurance instead of using your own collision coverage.
comprehensive insurance pays the value of your car in case of theft and helps pay car repair bills for problems such as falling objects, collisions with animals, fires, floods, hail , vandalism and theft.

If you have a car loan or lease, your lender or leasing company may require you to have comprehensive and collision insurance.

personal injury protection

If you are injured in a car accident, Personal Injury Protection (PIP) pays medical bills and other expenses for you and your passengers, no matter who caused the accident. PIP is required in 15 states as part of “no-fault” insurance laws. pip is optional in four states and the district of columbia.

pip generally covers:

medical bills
lost wages if you are unable to work due to accidental injuries
rehabilitation costs
replacement services for tasks you are unable to perform due to injury, such as babysitting and housecleaning
funeral expenses

medical payment coverage

Sometimes called “medpay,” this type of coverage pays medical bills for you and your passengers, regardless of who is at fault for the car accident. medpay is usually sold in small amounts between $1,000 and $5,000. medpay is not available in all states.

optional coverage types

In addition to your standard auto insurance options, you may want to purchase additional coverage to ensure you are fully protected:

rental reimbursement insurance. If your vehicle is out of service due to a problem covered by your policy, rental reimbursement insurance pays for your additional transportation costs, such as a rental car or subway. fee.
gap insurance. If you have a loan or lease, gap insurance pays for the “gap” between what you owe on the car loan and the depreciated value of the vehicle if added by a problem covered by your policy (such as a car accident or fire).
roadside assistance insurance. If your car breaks down or gets a flat on the side of the road, roadside assistance insurance pays for services like a tow truck, jump start, or locksmith.

3. compare auto insurance quotes

When you’ve determined how much auto insurance you need, the next step is to compare auto insurance quotes from multiple insurance companies. Auto insurance rates can vary widely from insurer to insurer for exactly the same coverage, so don’t skip this vital step.

you can get free quotes:

Online. If you prefer to shop from your couch, you can find free auto insurance by visiting an insurer’s website or using a comparison site that allows you to compare multiple policies at the time .
an insurance agent. If you prefer to speak with someone, you can speak with an insurance agent. It’s better to talk to an independent agent who sells policies from multiple policies versus a captive agent who only sells policies from a specific company.

This is some of the information you will need to collect insurance quotes:

personal information. This includes the age and driving experience of all drivers in your household, driver’s license number, and zip code (where you will store your car).
vehicle information. In addition to the make and model of your car, it’s good to have information like security and anti-theft features, which could earn you a discount.

4. buy a car insurance policy

Once you identify the company and policy you want, it’s time to apply for auto insurance.

Some insurers offer up to a 10% discount if you pay in full up front. if you don’t want to pay in full, you can usually choose monthly installments. you may be able to get a small discount for using automatic withdrawals.

When you have a policy, the insurance company will send you proof of insurance by email, fax or mail. Some insurers have a mobile app that downloads your proof of insurance. Most states except New Mexico accept digital proof of car insurance.

Whether you’re buying a new or used car, most states require proof of insurance before you can register the vehicle and drive it off the dealer lot.

5. cancel your old coverage

If you already had insurance in force on your current car, make sure your new coverage is active before canceling your old policy. you should get a refund for unused months on the old policy.

Make sure you receive confirmation that your policy was cancelled.

If you cancel your car insurance before your new coverage goes into effect, your car will be left uninsured, which can have serious legal and financial consequences if you’re in a car accident, meaning you’ll have to pay for all damages and out-of-pocket expenses, and you could be ticketed for driving without insurance. you may also have to pay more for your new policy, as a break in coverage can increase rates.

3 tips for car insurance buyers

Whether you’re a newbie or an auto insurance expert, here are some helpful tips worth considering when shopping for an auto insurance policy.

1. look for ways to reduce car insurance costs

There are ways to save on car insurance, like:

bundle your insurance. Also called “multi-policy discounting,” this is when you buy more than one type of policy from an insurance company. it is usually one of the best discounts you can get. for example, you can bundle auto and home insurance.
Ask about discounts. Insurers offer a wide variety of auto insurance discounts, such as discounts for insuring multiple cars, vehicle safety features, anti-theft devices, good driving, being a good student and occupational and professional memberships.
raise your deductible. the higher your insurance deductible for comprehensive and collision insurance, the less you’ll pay in premiums. That’s because your insurer will pay less if you file a claim. for example, you can increase your deductible from $500 to $1,000 (or more). just keep in mind that if you choose a high deductible, you’ll be responsible for paying that amount out of pocket if you file an insurance claim.
Minimize optional coverage on older vehicles. In some cases, it doesn’t make financial sense to pay for certain optional coverages on an older car. Here’s a guide on when to drop collision and comprehensive insurance.

2. keep your coverage options open

It’s a good idea to periodically review your auto insurance coverage to make sure it continues to meet your needs. the policy you bought 10 years ago may no longer be appropriate or competitively priced.

“Car insurance needs vary from person to person. From young drivers, commuting to work, carpools to soccer practice, or approaching your golden years of driving, it’s important to check with your agent throughout each phase of life to make sure you have the exact coverage you need and nothing that is missing. ‘t,” says Jon Bloom, vice president of product management at Erie Insurance.

3. look beyond the price

I’m sure you want to find car insurance at the best possible price. but cost is not everything. If you have to file an auto insurance claim, you want an insurance company that has a strong reputation for customer service.

The best car insurance companies combine good service at a competitive price.