How To Shop For Car Insurance in Five Steps:
- Gather comprehensive information about your cars, drivers, and driving history before seeking insurance quotes.
- Evaluate the different coverage types and deductible choices that are right for your needs.
- Explore various insurance shopping methods, including contacting agents, using brokers, and leveraging online tools.
- Save money on car insurance by taking advantage of available discounts, improving credit scores, and other methods.
- When you feel you are ready to purchase an auto insurance policy just fill out an application truthfully and accurately.
Step 1: Gather The Information You Need Before Getting a Quote
The process of getting car insurance quotes is much simpler when you take a few minutes to gather all the information insurers need. There’s no need to be overwhelmed by this step. You can find most of the information on your current auto insurance declarations page, and you may know the rest of the information off the top of your head.
To get insurance quotes, you will need to provide information about your cars, household drivers, driving histories, and current policy.
Have the following information about your cars at your disposal:
- Year, make, and model of each car you want to insure
- Vehicle identification numbers (VIN) for all cars
- Names and addresses of any lienholders and leaseholders
- Annual mileage or commuter mileage for each car
- Garaging address for each car
Note: You may find the VINs on your current policy, and you’ll also find them on the dashboard, on the driver’s side door jamb, the vehicle registration, and on the engine’s firewall.
You’ll also need this information on each driver living in the household:
- Address and contact information
- Names and birthdates
- Driver’s license numbers for the state they're currently licensed in
- Safe driving courses
- Information about students away at school
It will be to your advantage to have the following information about driving and policy histories handy:
- Ticket and accident history for all drivers
- Prior insurance company and expiration date
- Insurance history (length of time you’ve had your policy)
For example, an insurance company may not look favorably on your application if you have had a lapse in coverage or only had your previous policy for a short time.
Most insurers can obtain this information via consumer reports, but isn't usually reviewed until the policy is about to be issued. So in order to get an accurate quote, customers should provide as much truthful information as possible.
Step 2: How to Determine the Right Level of Coverage
At first glance, your declarations page may seem like a jumble of numbers, yet this page offers a snapshot of your coverage options, deductibles, and other useful information.
Let’s break down the types of car insurance coverage to help determine your needs.
Comprehensive coverage, also known as “other than collision”, protects your car from certain incidents that aren’t considered a collision. Common comprehensive coverages include:
- Glass breakage
- Hitting an animal
- Falling objects
- Hail or other weather-related incidents
Simply put, collision coverage pays for damage to your car if you get into an accident with another car. Collision coverage also applies to hitting an object such as a fence, tree, or even a ditch.
You will need to choose a deductible if you opt for comprehensive or collision coverage which is the amount you must pay before your insurance kicks in.
Deductible choices typically range between $0 and $1,000. While it’s nice to have a low deductible, you’re premium will be higher than if you choose a $500 or $1,000 deductible, so take that into consideration when you’re getting quotes.
You will need to carry comprehensive and collision, which is considered having full-coverage car insurance, for any cars that have a loan or lease.
The liability coverage protects against bodily injury and property damage to others. In addition to covering other drivers’ cars, liability covers other types of property damage in case you hit a street sign or mailbox. Legal and defense costs are included in the liability coverage.
Liability may be shown as split limits or a combined single limit. An example of a split limit is $100,000 per person, $300,000 per incident, and $100,000 for property damage, and an example of a combined single limit is $300,000.
To check out the minimum liability limits in your state, visit the Insurance Information Institute (Automobile Financial Responsibility Laws by State, 2018) and be sure you meet them.1 Each state sets minimum coverage limits for liability, yet higher limits are usually preferable if you can afford them.
Medical Payments and Personal Injury Protection (PIP)
Depending on the state you live in, you may have the option of medical payment insurance. This coverage pays for injuries to you or your passengers. Generally, medical payment coverage pays for ambulance services, doctor visits, hospital stays, surgery, X-rays, and other medical bills.
PIP coverage is similar to medical payment coverage as it also covers you and the people in your vehicle. The main difference between PIP and medical payment coverage is PIP generally also covers lost wages, rehabilitation costs, and necessary recovery services (housecleaning, child care, etc.)
PIP is required by law in some “no-fault” states. In a “no-fault” state, each party or their insurance company pays for their own damages. Insurance Business Magazine offers a chart of the states that require PIP insurance and the minimum limits.
Uninsured Motorist/Underinsured Motorist (UM/UIM)
Uninsured motorist pays for your bodily injury claims against drivers who don’t have any insurance at all. UIM is similar in that it pays for bodily injury claims for drivers who are underinsured.
Uninsured Property Damage (UMPD)
UMPD pays for damages to your car if the other driver doesn’t have insurance or doesn’t have enough to restore your car. UMPD is required in some, but not all states.
We’ll provide an example to help you understand how UIM works.
Let’s say another driver hit your car and injured you. Your medical bills were $30,000 and the damage to your car was $35,000. In processing the claim, you learn that the at-fault driver only had the state minimum limits of $25,000 for bodily injury and $25,000 for property damage. The other driver’s policy would pay $25,000 for your medical bills and your policy would pay the remaining $5,000. The other driver’s policy would also pay $25,000 for your car repairs, and your policy would pay the remaining $10,000 minus a slight deductible as indicated by your policy, which is usually $250.
Additional auto coverages are often optional and can be nice to have:
- Roadside assistance may be available on some policies if you get a flat tire or your vehicle is disabled on the roadside.
- Car rental coverage pays for renting a vehicle while your vehicle is being repaired. A maximum per day limit applies.
- Gap coverage pays the difference between the actual cash value of your vehicle and the amount you owe on it. A lender may require you to carry gap insurance coverage.
Step 3: How To Shop Around for the Best Car Insurance Quotes
Fortunately, you have a few options for how to shop for car insurance in today’s market. You can go through an agent or broker, get quotes online, or do both. Regardless of how you go about it, it’s generally best to get at least three quotes to compare costs and coverage options.
Contact an Insurance Company’s Agent
You’ll find that the largest insurance companies have their own agents. Because they work directly for one company, you can only get one quote from them.
Nonetheless, you can contact multiple insurance providers and do the comparison on your own.
Use an Insurance Broker or Independent Insurance Agent
Brokers and independent agents have the advantage of partnering with different companies. They can offer you multiple quotes with one call. Brokers and agents are highly knowledgeable about the companies they offer, so they can recommend coverages and discounts that apply to your situation.
Use an Online Comparison Tool
You won’t have to look too far to find an online comparison tool for getting several auto insurance quotes at a time. The advantage of using an online comparison tool is you only have to input the information once. The downside is not having the guidance of an insurance professional in your corner.
Get Quotes With SteadyDrive - You Can Save Hundreds
SteadyDrive is a free mobile app that helps you reduce your auto premiums based on your safe driving.
The SteadyDrive app works with the sensors on your smartphone while you’re driving and tracks things like acceleration, speeding, hard braking, hard turning, and phone use. Leading insurers then provide you with a quote based on your driving habits, not the driving habits of a group of others. Good drivers may save hundreds on their premiums.
RELATED: How SteadyDrive Can Save You Money
Step 4: How to Compare Quotes and Get the Best Discounts
When comparing car insurance rates, match up the liability limits and deductibles as closely as possible. Double-check to see if the quotes include add-ons such as roadside assistance or car rental.
You might be able to get “apples to apples” quotes, yet some companies may offer lower rates if you’re willing to increase your deductibles a bit or bundle your policies. Being open to making minor adjustments might yield a better rate.
The following tips may help you get the best premiums:
- Improve your credit score - Car insurance companies use it as part of the insurance score in many states.
- Install an anti-theft device.
- Take a defensive driving course.
- Bundle your car insurance policy with your homeowners, renters, or other policy.
- Leverage all possible discounts.
Find What Car Insurance Discounts You Qualify For
Nearly every auto insurance company offers car insurance discounts of some kind. You may qualify for the following discounts:
- Safe driver
- Multi-policy, bundling insurance policies
- Defensive driving course
- Good student/student away at school
- Safety equipment
- Paid in full
- Automatic payments
Discounts often save you money, but there’s also a chance an auto insurer will offer a lower premium even without discounts.
Insurers That Use Telematics
A telematics program, also called usage-based insurance (UBI), enables insurance companies to create usage-based rates. A telematics program rates factors such as the time of day, location, acceleration, hard braking, hard turns, and airbag deployment.
Telematics programs vary by company but what they all have in common is they all collect data and use it to ensure your insurance rates correlate to your driving habits. Opting for an insurer that utilizes telematics can offer you several benefits. It allows you to better understand your driving habits which could lead to less risky driving, and you may be rewarded with lower rates. It’s worthwhile to ask insurance companies if they have a telematics program when getting quotes.
Telematics may save some drivers money, but riskier drivers may have to pay a higher rate.
Step 5: Purchasing an Insurance Policy
Purchasing an auto insurance policy is as simple as filling out an application truthfully and accurately. The company may bind coverage right away, but the policy will still need to go through an underwriting process. The company will verify your driving records and other information and may circle back with a few more questions.
Once your policy has been fully approved, you will receive it in the mail or you can download it online. Remember, you’re the customer. It’s never too late to ask questions of an agent or customer service.
How to Get Cheap(er) Car Insurance
Should you find yourself in the position of getting quotes and still not be able to afford a policy, there are a few ways you can lower your car insurance premium. Here’s what you can do.
Reduce Your Insurance Coverage
If you really need to lower your premium, you might consider lowering your liability limits. This option has risks considering you will have to pay out of pocket for any insurance insurance claims where a claim exceeds your maximum liability limits.
Increase Your Deductibles
Bumping up your deductibles can be a lucrative strategy for lowering auto insurance premiums. Just be sure you can afford to pay the higher deductible in case you get into an accident.
Enroll in a Defensive Driving Course
Auto insurance companies generally find drivers who enroll in a defensive driving course as responsible and lower-risk drivers.
Many insurance providers offer a discount on insurance premiums to benefit drivers who have shown a commitment to safe driving.
It costs you nothing to download SteadyDrive and you can sign up within seconds. With your permission, insurance companies get firsthand information about your driving and you can get quotes automatically based on your good driving habits.
Final Tips for Shopping Around for Car Insurance
Shopping for car insurance quotes isn’t something you do often, so give it the time it demands to get the best quotes.
Take a moment to understand the various types of coverages and think about what you really need. Consider how much you might have to pay out of pocket in the worst-case scenario when choosing your limits and deductibles.
How To Shop for Car Insurance: FAQs
Is it smart to shop around for car insurance?
It’s impossible to know what deals are out there until you test the waters by getting quotes. It makes sense to shop around yearly, but if you switch companies, you may lose a valuable loyalty discount.
Does shopping for car insurance affect credit score?
No. Insurance companies do a soft pull on your credit which doesn’t impact your credit score.
What is the average cost of car insurance?
According to a Forbes Advisor analysis, the average cost for full coverage for car insurance is $2,150 per year. (Gusner, 2023).3 Your premium could be lower or higher depending on the many factors insurance companies use when calculating rates including where you live, the year, make and model of your car, and what coverages you seek.
What are the different types of car insurance?
There are two types of car insurance — standard and non-standard. Standard auto insurance is only available to drivers with fairly clean driving records and good credit scores. Non-standard insurance companies accept drivers with multiple tickets and accidents, DUIs, and poor credit. They will also accept drivers with a lapse in coverage and foreign drivers who have never had a driver’s license.
When should you start shopping for car insurance?
Start shopping for car insurance at least a few months before your renewal date to give you ample time to evaluate your quotes. You may even get an additional discount for shopping early.
How long does it take to shop for car insurance?
How long it takes depends on how many quotes you are looking for. It can take anywhere from a few minutes to several hours.
What are the benefits of shopping for insurance?
Shopping around for car insurance gives you the benefit of getting the best rates. It also makes sure you review your policy every year and keep it updated.
SteadyDrive is not an insurer or an insurance agent or broker. SteadyDrive does not provide you with an insurance policy, so make sure that you have insurance coverage while you drive. Please contact your insurer or an insurance agent or broker (if applicable) directly regarding questions you may have pertaining to auto insurance coverage. For more details, see SteadyDrive’s Terms of Service.
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