Auto Insurance Quotes, Explained

When looking for the best auto insurance for the first time, many first-time drivers are overwhelmed. Car insurance quotes can assist you in navigating the process by outlining the different types of coverages available and how much you can expect to pay.

You can get free car insurance quotes online in a matter of minutes, so there's no reason not to get a few to compare. But don't just look at the price. While low-cost car insurance should be a priority, you should not forego important coverage to save a few dollars.

This guide will teach you about terminology, state insurance requirements, and factors that may affect your premium as you request and compare auto insurance quotes. Then, you can compare the coverages, discounts, and rates offered by insurers by requesting car insurance quotes online.

What is a car insurance quote?

An auto insurance quote is an estimate of how much an insurer will charge you for a car insurance policy based on your personal information.

Quotes are important because insurance rates vary from company to company. To avoid overpaying for car insurance, obtain as many quotes as possible.

If you are in the market for a new car, obtain insurance quotes based on the make and model of the vehicle you intend to purchase. Even if you are not in the market for a new vehicle, you may want to obtain car insurance quotes in order to find a new carrier. If you are dissatisfied with the cost of your premium or the service provided by your current provider or agent, obtain quotes from other companies to find the coverage and rate that is right for you.

What goes into a car insurance quote?

Insurers base your car insurance rate on a variety of factors, which typically include:

  • Types and amounts of coverage: Motorists who own older vehicles frequently only purchase the minimum required by law. People who lease or finance their cars, on the other hand, must generally carry more coverage, as required by the leasing agent or lender. For maximum protection, some drivers carry the state-required liability coverage as well as optional coverage. Choose your coverages carefully if you want to find cheap car insurance. Each coverage you select will raise your insurance premium.
  • Age: Insurance companies base their rates on the amount of risk they take by insuring your vehicle — and you as the driver. According to statistics, older, more experienced drivers cause fewer accidents. Young drivers under the age of 25 typically pay the highest rates.
  • Gender: Men cause more accidents than women, according to statistics. As a result, insurers frequently charge male policyholders higher rates.
  • Credit score: In most states, insurance companies can use your credit history to determine your premium rate. People with bad credit, on average, file more insurance claims. Drivers with good credit often receive the best rates if they have a clean driving record, whereas people with bad credit typically pay much more for auto insurance.
  • Driving record: Drivers with a history of at-fault accidents or traffic violations pose a higher risk to insurers. To compensate for the risk, insurance companies charge higher rates to drivers with poor driving records.
  • Location: Your insurance rate can be influenced by where you live for a variety of reasons. You can expect to pay a higher car insurance rate if you live in an area prone to car theft and vandalism. Similarly, if your city has a high per capita rate of traffic accidents, your carrier may charge you a higher premium.
  • Vehicle make and model: The type of car you drive has a significant impact on the cost of car insurance. Electric, luxury, and sports cars are typically more expensive to insure because they are more expensive to repair or replace. If you're looking for a car, a more modest vehicle can usually help you get low-cost auto insurance.
  • Annual mileage: The more you drive, the more likely you are to be involved in an accident and file an insurance claim. Avoid living behind the wheel if you want to keep your insurance rates low.

The underwriting guidelines differ depending on the insurer. One provider may place a high value on your credit score, whereas another may place a higher value on your driving record. As a result, obtain insurance quotes from several companies.

Almost every state requires you to carry minimum levels of bodily injury and property damage coverage, but the amount required varies by state. In Alabama, for example, drivers must carry at least $25,000 in property damage liability coverage, whereas California drivers are only required to carry $5,000. Other types of coverage, such as personal injury protection and uninsured and underinsured motorists, are also required in some states. The more coverage required by your state, the higher your insurance premium.

What is the difference between an insurance quote and a policy?

Auto insurance quotes estimate how much an insurance company will charge you for a policy. A policy is a written contract between you and the insurer that specifies the types and amounts of coverage, when the provider will and will not pay a claim, how to file a claim, the term of coverage, and the premium cost.

A contract must be signed in order to obtain a policy. The process of purchasing a car insurance policy differs depending on the insurer. Some insurance companies allow you to request a quote and buy a policy online. Others demand that you sign a contract in person at a local agency. Some insurance companies also allow you to request a quote and buy a policy over the phone.

How and where can I get car insurance quotes?

Insurance companies operate in a variety of ways, making it simple for you to shop how you want. In general, the following are your options for obtaining car insurance quotes:

Directly through a major insurance carrier

These are well-known insurance companies, such as Geico and Progressive. In general, these large insurance companies provide you with a few options:

  • In person: If you prefer to conduct business in an office setting, companies such as State Farm and Allstate operate local agencies.
  • Over the phone: Many insurers also allow you to request a quote and buy a car insurance policy over the phone.
  • Online: The majority of major car insurance companies provide auto insurance quotes online. Online quote apps will ask you a series of questions about yourself, your location, the type of vehicle you drive, how you use it, and how much you drive each year.

Online quotes differ. Some generate a quote online in a matter of minutes, whereas others forward your information to an agent for a callback or follow-up email. At the end of the quote process, some insurance providers even allow you to buy a car insurance policy online. Some insurers also offer online quotes through mobile apps.

Working with an agent versus completing the process online has advantages and disadvantages. While working with an agent takes more time, you will have access to an expert who can answer all of your questions. If you decide to work with an agent, inquire about available discounts to obtain low-cost auto insurance.

Through an independent insurance agent

There are two kinds of agents who sell auto insurance policies. Some agents (known as captive agents) work for the insurance company directly, while others work independently. Independent agents frequently sell policies for multiple insurance carriers, making it possible for you to obtain multiple quotes without visiting multiple agencies.

Through an insurance broker

Car insurance policies are also sold by insurance brokerages for a variety of providers. Many brokers conduct business over the phone or online. Quotes from multiple insurers can be obtained from an online brokerage in a matter of minutes.

Regardless of how and where you shop for auto insurance, getting as many quotes as possible is always a good idea.

What information should I have handy to get a free auto insurance quote?

This varies slightly between insurers, but you'll typically need the following information to obtain car insurance quotes:

  • The registered vehicle owner's name
  • The names of any additional drivers you intend to add to the policy.
  • Driver's license numbers are required for all drivers.
  • Your vehicle's year, make, model, and vehicle identification number (VIN).
  • Your annual mileage average
  • Regardless of whether you lease, finance, or own your vehicle,
  • Where you will park your car the majority of the time (usually your address)
  • Data on the auto insurance you've had up to this point (e.g., carrier name, expiration date)
  • Your driving record (e.g., tickets, accidents, license suspensions)
  • The type and amount of coverages you want

Choosing the best auto insurance coverage for you

Even if your top priority is affordable car insurance, there are a few things to consider when comparing car insurance quotes.

When it comes to car insurance, price is only one factor to consider. After obtaining quotes from various insurers, sit down and compare the details. You might assume that the quotes you receive will include all of the same coverages, but this is not always the case.

Meet your state’s required coverage levels

The vast majority of states require some form of liability car insurance. This coverage will pay the bill if you injure or damage someone else's property while driving.

Compare the same coverage amounts

All of the quotes you request should include the same level of coverage. If your state requires you to carry $20,000 in personal property liability coverage, all of your quotes should reflect that amount. Similarly, all quotes should include other mandatory coverages, such as PIP or uninsured and underinsured motorists. Compare the costs of each of these coverages, especially the cost of liability insurance.

Compare individual rates if you requested quotes for a policy with additional coverage options such as collision and comprehensive coverage. Compare collision and comprehensive deductibles as well. Many insurers have a $1,000 default deductible, but others may have a $500 standard deductible. Across all quotes, compare the cost difference between coverages and deductibles.

Compare included options

Examine for the inclusion of extra coverages that you did not request. For example, a quote may include free roadside assistance or rental car reimbursement coverage. If you find no-cost coverages, that's a plus because many providers only offer them as riders. Quotes that do not include these coverages frequently include pricing information if you decide to add them to your policy.

Compare discounts

Compare the discounts, if any, that each insurer applied to your quote. Insurance companies provide a variety of discounts. You could get a discount for things like safe driving, taking a defensive driving course, owning a home, and getting good grades in school. Policyholders who qualify for multiple discounts can frequently save up to 25% on their car insurance premium.

Determine which company provides the best value for money and coverage. The best policy isn't always the most affordable. Auto insurance protects your most valuable assets, so don't skimp on coverage just to save a few dollars.

How much should my auto insurance coverage cost me?

This is a question you'll likely ask whether you're looking for low-cost car insurance or a robust policy that will provide you with the best protection on and off the road.

It all depends on how much coverage you purchase, the type of vehicle you drive, your driving history, and other factors. Check out this overview of the average cost of car insurance by state to get an idea of how much you'll pay. If you're looking for the cheapest car insurance in 2021, look no further than this list of the best cheap car insurance providers.

Terms to know when applying for a car insurance quote

Before you can shop for car insurance, you should be familiar with a few industry jargon. Insurance jargon is more than just slang; terms have legal meanings that define the protection you're purchasing. Here is a list of some of the most important terms you will most likely come across.

25/50/25

When researching the insurance coverage required by your state, you may come across three numbers. In thousands of dollars, these three figures represent the amount of liability coverage you must purchase.

The first number represents the amount of bodily injury liability coverage required to pay for one person's medical bills in the event of an accident. The second number represents the amount of bodily injury liability required to cover the medical expenses of multiple injured people in a single accident. The third number denotes the amount of property damage liability coverage you must purchase.

In this example, the state requires $25,000 in bodily injury coverage to pay for one person's medical expenses, $50,000 in bodily injury coverage for multiple people's medical expenses, and $25,000 in property damage coverage.

Bodily injury liability

This type of coverage pays the medical expenses of the other driver and their passengers if you cause a traffic accident.

Claim

To receive money from an insurance company after a covered loss, you must file a formal request known as a claim.

For example, if a rock breaks your windshield, you will file a claim with your insurance company to request money to repair or replace it, according to the terms of your policy.

Collision coverage

If you were the at-fault driver in a covered road accident, this coverage will pay to replace or repair your vehicle. If not, the bill should be covered by the other driver's liability insurance.

Comprehensive coverage

If your car is stolen, this coverage will pay to replace it. If your car is damaged in a non-collision calamity, comprehensive coverage will pay to repair or replace it.

For example, if vandals break into your car and damage the door, you can file a comprehensive coverage claim to cover the repair costs. Similarly, if a tree falls on your parked car, your comprehensive coverage will help pay for repairs.

Deductible

Most car insurance policies include a deductible, which is the amount you must pay out of pocket in the event of a covered loss.

In general, you will not have to pay a deductible if you use your liability insurance, but you will if you use collision or comprehensive coverage.

For example, if a collision damages your car $5,000 and you have a $1,000 deductible, you can file a claim for $4,000.

Medical payments coverage

When you are at fault for an accident in which you or your passengers are injured, your medical payments coverage can assist you in paying your medical bills.

Personal injury protection

PIP, like medical payments coverage, pays for your and your passengers' medical expenses in the event of a covered accident. PIP pays regardless of fault and covers funeral expenses as well as lost wages.

Property damage liability

When you cause a traffic accident, this type of coverage pays to repair or replace another driver's vehicle. Other types of property, such as fences and mailboxes, are also covered by property damage liability.

Premium

Your premium, also known as your rate, is the amount you will pay for a car insurance policy. Premiums are expressed as a dollar amount and the length of the term. For example, you could pay $500 for a six-month policy.

Riders

Riders, also known as endorsements, are additional or optional coverages. For example, you could include a rider for OEM parts, which would pay to repair your vehicle with original manufacturer parts.

Uninsured and underinsured motorist coverage

If a negligent driver with no or insufficient auto insurance collides with your vehicle, this type of coverage assists in paying your medical bills and car repair costs.