How To Buy Car Insurance
A car is a significant financial investment. Even if you buy a pre-owned older model, you will most likely have spent a significant amount of money on the purchase. In addition, if you are involved in an accident, medical bills and repair costs can be prohibitively expensive. Auto insurance is an excellent way to financially protect yourself in the event of an accident. Furthermore, car insurance is required in nearly every state in the country, and driving without it can result in serious financial and legal consequences. It is critical to understand how to obtain car insurance in order to protect yourself and your investment.
What will I need to buy auto insurance?
Nowadays, purchasing auto insurance is a simple process. Make sure to gather some information before you begin. This is the information you'll need on hand:
- Driver's license: The insurance company will require proof that you are legally permitted to drive.
- Number of Social Security: Many insurance companies base your car insurance rate on your credit history. Individuals with poor credit may be regarded as higher-risk drivers. If you live in California, you're in luck because the state prohibits car insurance companies from insuring drivers based on their credit history.
- Vehicle identification number (VIN): Your vehicle's VIN is a unique number that reveals a lot about it. Looking from the outside in, look for it in the driver side dashboard corner. It could also be on your vehicle registration or bill of sale.
- Make, model, and mileage: You must provide the insurance company with information about the vehicle, such as the trim package and any extras included in the model, as well as the current mileage.
- Payment information: You will need a credit card number or bank account information, including your bank's routing number and account number, to purchase auto insurance.
Where can I buy auto insurance?
It's never been easier to learn how to buy auto insurance. You have a number of options for making the process go as smoothly as possible. Depending on how quickly you require car insurance and your level of comfort with technology, you could buy car insurance online yourself or seek assistance from an agent or representative. Consider the following alternatives:
Online
Purchasing a policy online is the quickest way to obtain car insurance. You can begin by entering the information you gathered to obtain a no-obligation quote. If you are satisfied with the quote, you may choose to purchase the coverage by completing the application online and paying for it. From start to finish, you could be legally insured to drive in a matter of minutes.
Over the phone
If you don't feel comfortable entering your personal banking information on an insurance company's website, or if you don't know how to buy car insurance from your smartphone or computer, you can call to purchase insurance over the phone. Most insurers have a toll-free 800 number and knowledgeable agents to assist you throughout the process.
Captive agent
A captive agent sells insurance on behalf of a single insurer. State Farm and Farmers are two of the top insurance companies that have captive agents to help you shop around for insurance policies. To purchase car insurance, you could go to your local State Farm office and meet with a captive agent. Working directly with a captive agent and developing a relationship will come in handy later on if you need assistance filing an accident claim or dealing with the insurance company. Your agent may be able to assist you in resolving any issues.
Broker or independent agent
A car insurance broker, also known as an independent agent, works with a number of insurance companies. If you're having trouble getting insurance because of your driving record, or if getting the best deal on car insurance is important to you, an independent agent could be a good option. They will know which auto insurance company will insure your specific needs and will shop around to get you the best price.
Car insurance from specialty agencies
Some companies specialize solely in auto insurance. Although AAA is a good example, many smaller insurers also specialize in auto insurance. Specialty agencies are well-versed in auto insurance and are ideal if you want to insure a classic car, for example. If you are considered a high-risk driver and need assistance finding the right policy, a specialty agency could be a valuable resource.
What are the types of coverages?
There are five basic types of car insurance coverage. In most states, liability insurance is required, but the other coverages are optional. Your insurer will be aware of the minimum amount of car insurance required to drive legally in your state.
Liability
If you are at fault in an accident, your liability insurance will cover property damage and other people's injuries. It is the most commonly required type of coverage. Liability insurance only protects others if you are responsible for an accident. If you are injured in an accident that you caused, or if your car is damaged, liability coverage will not pay for your medical bills or repairs.
Collision
Collision insurance is required if you want to add coverage to your vehicle and property. Collision insurance is intended to cover the cost of repairing or replacing your vehicle if you are at fault in an accident. If you're financing a car, the lender will almost certainly require you to have full coverage, which includes liability, collision and comprehensive coverage.
Comprehensive
Comprehensive insurance is frequently sold in conjunction with collision insurance to form full coverage insurance. Liability insurance, as previously stated, only protects others if you cause an accident. If your car is damaged in a collision, collision insurance will cover your expenses. Comprehensive insurance increases your personal protection by including coverage for additional events such as storms, flooding, fire, theft, and hitting an animal while driving.
Medical payments or personal injury protection (PIP)
Personal injury protection and medical payments cover injuries and medical bills for you and your passengers, regardless of who caused the accident. In some states, PIP/medical payments are required in addition to liability insurance. The states are as follows:
- Florida
- Hawaii
- Kansas
- Kentucky
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New York
- North Dakota
- Pennsylvania
- Utah
Uninsured and underinsured motorist
Although all states, with the exception of New Hampshire, require some form of auto insurance, there are many drivers on the road who do not have car insurance or only have the bare minimum. If you are in an accident with an uninsured driver, your own insurance will have to cover your losses. In other cases, if you're driving a newer vehicle and the other driver only has the bare minimum of car insurance, it may not be enough to cover all of your medical bills and property damage.
Uninsured and underinsured motorist coverage is an additional layer of protection for your auto insurance policy. If someone else causes an accident and does not have insurance to cover the damages, your uninsured/underinsured motorist coverage will kick in.
How much does car insurance cost?
Car insurance in the United States costs an average of $121 per month. The costs can vary greatly depending on a variety of factors. Some of the most common factors that can cause your car insurance to be cheaper or more expensive are as follows:
- Age: Because of their lack of driving experience, younger drivers are thought to be more likely to be involved in an accident than older drivers. Teenagers are the most expensive age group to insure. As a teenager grows older, the cost of car insurance decreases.
- Location: The area in which you live can have a significant impact on the cost of your car insurance. Car insurance companies collect and analyze data to determine which areas have the most claims. Some areas are more prone to vehicle theft and vandalism than others. Other areas are more congested and have a higher accident rate.
- Driving history: One of the most important factors in determining how much you'll pay for car insurance is your driving history. If you have a history of speeding tickets or accidents, your insurer will consider you a higher risk to insure. They use your driving history to predict the likelihood of you being involved in a car accident in the future.
- Credit score: A surprising factor that many drivers are unaware of is credit history. You may end up paying more for car insurance if you have a low credit score. Auto insurers may be concerned that you will fail to pay your car insurance premiums on time. The state of California has made it illegal for insurance companies to use credit scores as a pricing factor. Other states may follow suit in the future.
- Gender: According to statistics, women are safer drivers than men. Because auto insurers rely on data to determine how to price their car insurance and who to insure, females may have lower insurance rates than men.
- Claims history: Similar to driving history, the number of claims made by a policyholder may have an impact on your auto insurance premiums. Car insurers will raise the cost of your car insurance to compensate for the risk that you will file a costly claim.
- Marital status: According to statistics, married drivers are less likely than single drivers to file an auto insurance claim. According to statistics, married couples may benefit from lower auto insurance rates.
- Coverage type: The amount of coverage you purchase can have a significant impact on how much you pay for car insurance. It stands to reason that a basic liability insurance package for the bare minimum of coverage required by your state will be far less expensive than full coverage with higher limits.
- Vehicle: Expect to pay more for car insurance if you drive a newer model or a higher-end vehicle. It stands to reason: repairs on a ten-year-old Honda Civic are likely to cost far less than repairs on a brand-new BMW.
To get the best deal on car insurance, shop around and compare quotes from several insurers on a regular basis. You may notice a significant difference in the cost of the same type of coverage from one insurer to the next and decide to switch car insurance companies.