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How to Buy Car Insurance: Step by Step

Fact-checked with HomeInsurance.com

No one ever plans to have a car accident. Still, millions of American lives are changed by accidents on the road every year. That’s why car insurance exists, and being a prepared driver means having coverage before getting behind the wheel.

Shopping for car insurance is something most of us have to figure out sooner or later, as it’s required almost everywhere in the U.S. If you’re wondering how to get car insurance, this guide will walk you through each step.

Step 1: Decide how you want to buy car insurance

Many drivers already have an auto insurer they are happy with and may choose to renew with that insurer. If the current insurer isn’t providing the desired service, shopping for a new policy might make more sense.

There are multiple channels for buying a new car insurance policy. You can buy car insurance online, over the phone or through an agent or a broker.

There are a few important differences between agents and brokers.

Insurance agents

Agents have formal contracts with one or more insurance companies and can write policies for customers. If an agent is associated with one company they are “captive agents.” If an agent is associated with multiple companies, they are “independent agents.”

Whether captive or independent, the agent will have in-depth, insider information into the policies and coverages of the insurance company(s) they represent. Keep in mind that the agent works for the insurer, not the customer.

Insurance brokers

Brokers do not have formal contracts with insurance companies and cannot write policies for customers. Think of brokers as expert insurance buyers who work for you.  They examine the local market and what a customer is looking for in their policy.

They will look for auto insurers who offer service in the region and try to find the one that best fits the needs of the customer. Because brokers do not have a formal contract with insurers, they will not usually have the same insight into the companies that agents will be able to provide.

Step 2: Determine how much courage you need

Determining how much coverage is needed in an auto insurance policy is the most complex step of the process. Which coverages are included will affect the price of the policy. Having some form of auto insurance is required before getting behind the wheel in most regions.

Here is a list of the states and their minimum requirement for auto insurance, according to the Insurance Information Institute

StateTypes of required coveragesMinimum liability requirements
AlabamaBodily injury liability, property damage liability25/50/25
AlaskaBodily injury liability, property damage liability50/100/25
ArizonaBodily injury liability, property damage liability15/30/10
ArkansasBodily injury liability, property damage liability, personal injury protection25/50/25
CaliforniaBodily injury liability, property damage liability15/30/5
ColoradoBodily injury liability, property damage liability25/50/15
ConnecticutBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/20
DelawareBodily injury liability, property damage liability, personal injury protection25/50/10
FloridaPhysical damage liability, personal injury protection10/20/10
GeorgiaBodily injury liability, property damage liability25/50/25
HawaiiBodily injury liability, property damage liability, personal injury protection20/40/10
IdahoBodily injury liability, property damage liability25/50/15
IllinoisBodily injury liability, property damage liability, underinsured motorist, uninsured motorist25/50/20
IndianaBodily injury liability, property damage liability25/50/25
IowaBodily injury liability, property damage liability20/40/15
KansasBodily injury liability, property damage liability, personal injury protection25/50/25
KentuckyBodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist25/50/25
LouisianaBodily injury liability, property damage liability15/30/25
MaineBodily injury liability, property damage liability, underinsured motorist, uninsured motorist, Medpay50/100/25
MarylandBodily injury liability, property damage liability30/60/15
MassachusettsBodily injury liability, property damage liability, personal injury protection20/40/5
MichiganBodily injury liability, property damage liability, personal injury protection20/40/10
MinnesotaBodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist30/60/10
MississippiBodily injury liability, property damage liability25/50/25
MissouriBodily injury liability, property damage liability, uninsured motorist25/50/25
MontanaBodily injury liability, property damage liability25/50/20
NebraskaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/25
NevadaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/20
New HampshireFinancial responsibility only25/50/25
New JerseyBodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist15/30/5
New MexicoBodily injury liability, property damage liability25/50/10
New YorkBodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist25/50/10
North CarolinaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist30/60/25
North DakotaBodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist25/50/25
OhioBodily injury liability, property damage liability25/50/25
OklahomaBodily injury liability, property damage liability25/50/25
OregonBodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist25/50/20
PennsylvaniaBodily injury liability, property damage liability, personal injury protection15/30/5
Rhode IslandBodily injury liability, property damage liability25/50/25
South CarolinaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/25
South DakotaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/25
TennesseeBodily injury liability, property damage liability25/50/15
TexasBodily injury liability, property damage liability, personal injury protection30/60/25
UtahBodily injury liability, property damage liability, personal injury protection25/65/15
VermontBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/10
VirginiaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/20
WashingtonBodily injury liability, property damage liability25/50/10
West VirginiaBodily injury liability, property damage liability, uninsured motorist, underinsured motorist25/50/25
WisconsinBodily injury liability, property damage liability, uninsured motorist, Medpay25/50/10
WyomingBodily injury liability, property damage liability25/50/20

While this chart will give you a general idea, it’s best to look at the details of your state’s requirements before you start getting quotes.

Coverage options

When shopping for car insurance, have a sense of which coverages are offered and what they mean to the policyholder. Here are some of the most common coverages in auto insurance policies:

  • Collision coverage: This pays for damage to the policyholders when involved in an accident with another car or an object while driving. This is usually a required coverage when paying off a car.
  • Comprehensive coverage: This pays for damages to the car besides driving accidents, such as natural disasters or theft. This is a good coverage to get for drivers living in flood zones and other areas prone to disasters.
  • Personal injury protection: This pays for expenses when the driver or passengers are injured in a car accident. This coverage kicks in when there is “no fault” found in the accident for either driver. 
  • Liability coverage: This pays for damages to other parties who are injured by the insured driver in an accident. This coverage does not pay for any damages to the insured driver or their vehicle. It only applies to others if the insured driver is found to be at fault. 
  • Uninsured/underinsured motorist coverage: Uninsured pays for insured driver’s expenses after an accident when the other driver is at fault and doesn’t have liability insurance. Underinsured pays for the same expenses when the other driver is at fault and has liability insurance with limits too low to cover the expenses of the insured driver.
  • Gap insurance: When the policyholder is paying off a car and that car is totaled or stolen, gap insurance pays the amount that is still owed on the car. This coverage pays for the “gap” between the depreciated value of the car and what is still owed on it. This is good to have on expensive cars when the policyholder is still paying the car off. 
  • Roadside assistance: This pays for expenses when an insured driver breaks down on the road. Coverage usually includes things like towing, battery service, flat tire service and fuel delivery. It’s good coverage to have for older cars.
  • New car replacement: This pays for the car’s actual cash value if the car is totaled. This coverage is helpful after purchasing a brand new car.

Step 3: Get a car insurance quote

After getting a good idea of which coverages will be needed in the car insurance policy, get a quote from auto insurance companies. Some auto insurers provide online quote tools that allow customers to enter in information to find out how much a policy will cost. Other insurers require customers to call in and speak with an agent before receiving a quote.

Before getting an auto insurance quote, gather a few pieces of information, including:

  • Address of where you live
  • Date of birth
  • Declaration page  
  • Driver’s license number 
  • Social Security Number
  • VIN number 

Have this information on hand when starting the quoting process. The insurance company will use the information to determine the price of the policy. 

Step 4: How to lower my car insurance quote

Car insurance rates are determined by several factors. While you can’t change several of those, there are a few things you can do to save some money. 

Coverage limits

Car insurance quotes are based on many things like personal information and state location, but a prime factor in the equation is the limit of coverage.

A coverage limit is the maximum amount that a policy will pay out for a coverage in the event of an accident or other damages. A higher coverage limit means that the policy will pay out a larger amount—but it also means the policy’s monthly premium will be more expensive.

One way to receive a lower quote on car insurance is to choose lower limits of coverage, but that will decrease the limit of the cash amount that the insurer will pay out after an accident.

Deductibles

Deductibles are another important factor in the cost of car insurance. A deductible is how much a policyholder must pay out-of-pocket before the policy kicks in and picks up the rest of the tab.

The higher the deductible, the more the policyholder has to pay out of pocket before the insurance helps out. Policies with higher deductibles usually also come with lower premiums—and vice versa.

Another way to receive a lower quote on car insurance is to choose higher deductibles in the policy. Higher deductibles also mean that the policyholder will be on the hook for more expenses than they would be with a policy that has lower deductibles.

Step 5: Compare quotes

The internet makes it easy to compare quotes from different insurers through third-party platforms. Using these services, people looking for auto insurance can fill out personal information and quickly receive quotes from insurers who offer policies in the area.

Getting auto insurance quotes from different providers is important because it allows people to compare all the options to ensure they find the best coverage and the lowest rate. To find out which insurance providers are reputable, check the provider’s company profile at the National Association of Insurance Commissioners and the Better Business Bureau.

Step 6: Select the best insurance provider for you 

After sorting through quotes from auto insurers, most people will have a good idea of which policy makes them the most comfortable. After choosing the policy that fits best, make a note of the payment schedule.

Many auto insurers offer online billing and auto-payment options. The insurance company might even give a discount for signing up for these services.

Step 7: Cancel previous car insurance if necessary

Cancelling car insurance is usually an easy process, and car insurance policies can be cancelled at any time. After deciding to cancel a current policy, the first step is to call the insurer and ask about its cancellation process.

Every insurance company has a process for how to cancel a policy. Many companies require people to send in an official cancellation letter, and there is often a notice period that requires policyholders to wait before they can end the policy.

Sometimes there are payments associated with cancelling a policy, so check with the insurer to see if any cancellation fees are involved in the process.

The takeaway

Auto insurance is an essential part of getting behind the wheel of a car, and most states require some form of insurance to drive legally.

People can choose to buy car insurance online, over the phone or even in-person at an insurance company branch in the area. Before signing up for a policy, understand the coverages in the policy and what each coverage means for the driver.

Shop around to get quotes from a few insurance providers to compare prices and coverages. Look at coverage limits and deductibles as a way to lower the cost of the auto insurance.

After selecting the best auto insurance policy, don’t forget to cancel the old policy, if needed. The cancellation process should be easy to complete, but don’t forget to check on the payment schedule required in the new policy.

With these steps in mind, buying car insurance should be a painless process.

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