Most states require car owners to have a minimum level of insurance coverage no matter what they drive. Leasing or financing a new vehicle comes with additional auto insurance requirements. Even if you don’t own a car, you may want or need coverage. Whatever your reason for purchasing an auto insurance policy, this guide can help you through the process.
- Determine which types of car insurance you must have and which are optional.
- Have your personal and vehicle information at your fingertips.
- Obtain car insurance quotes from at least three companies.
- Compare premiums, coverage amounts and limits.
- Make your decision and purchase your new car insurance policy.
- Cancel your old policy, if you have one.
There are three ways to get auto insurance: buy it online, contact a company representative (sometimes called a captive agent), or work with an independent insurance broker. You can also use an insurance comparator like ours to help you determine the best company, the best coverage and the best rate. Below, we’ve outlined three ways to buy auto insurance and some pros and cons of each.
Buy car insurance online
You can get car insurance quotes, buy a policy, and print your ID cards all in one place.
You don’t need to speak with an agent to purchase a policy.
Some people may find the lack of human contact impersonal.
If you have a question, you may not be able to find the answer online.
Buy car insurance with a captive agent
Agents can guide you through the buying process, from quote to purchase.
An agent can answer your specific questions and resolve tricky coverage issues.
Most captive agents only work for one company and may not be able to provide car insurance quotes from multiple providers.
Buy car insurance from an independent broker
An independent broker can provide you with quotes from several car insurance companies.
Unlike captive agents, a broker’s primary allegiance is to the client and not to an insurance company.
It’s a two-step process. After a broker presents options to a client, they pass the information to the insurance company, which completes the transaction.
Brokers may charge fees for their services.
If you are considering buying or leasing a vehicle and do not currently have car insurance, you will need to purchase a policy before getting behind the wheel. Likewise, if you are a newly licensed driver and not covered under someone else’s policy, you will need car insurance. Even if you’ve had car insurance for years, it’s a good idea to review your coverage every year or when major life events occur, such as a wedding or moving house. You may be able to save money by switching insurers.
Many insurance companies recommend purchasing a policy as soon as possible before getting behind the wheel. But even if you have to make a sudden or unexpected car purchase, many dealerships can help you secure coverage before you leave the lot. Some insurance companies will also allow you to purchase auto insurance online in minutes. It is important to note that some states require drivers to present proof of insurance to register a new vehicle.
To make your car insurance buying process go as smoothly as possible, it is best that you have the following information:
- Driver’s license number
- Social security number(s) for each driver on the policy
- The vehicle identification number (VIN)
- The make, model, year and current mileage of the car
- Vehicle security features, such as anti-lock brakes or a GPS anti-theft tracking device
- Where you park your car, such as in a garage or on the street
- Your home address and postal code
- Estimated number of kilometers you travel each year
- Desired coverage levels and deductible amounts
- Whether the car is owned, financed or leased
- All other drivers in your family that you plan to insure
Even if you don’t own a car, you may want to purchase auto insurance for the protection it provides.
Non-Owner Insurance, also called non-driver insurance, is for people who do not own their own car but regularly borrow a friend’s car, travel often and rent a vehicle, or frequently use car-sharing services. Depending on the state you live in, non-ownership insurance may also be suitable for people who need to file an SR-22 form in order to prove they are insured or have their driving privileges reinstated.
This type of insurance covers liability for bodily injury and property damage caused to others while driving. Depending on the company and policy, this may also include personal injury protection (PIP), medical payment coverage, and uninsured/underinsured motorist protection. Non-owner auto insurance generally does not include collision coverage, comprehensive insurance, or theft protection.
Car rental insurance is designed for people who do not have auto insurance or whose auto policy does not extend to vehicle rentals or has a high deductible. This type of insurance is sold by the rental company and is only valid for the duration of the rental contract. Car rental insurance typically covers the following, although you can purchase each component separately:
- Liability coverage applies to property damage and injury to others caused while driving. If you don’t have auto insurance, you’ll likely need to purchase this type of coverage.
- Collision/Loss Damage Insurance protects you from financial liability if your rental vehicle is stolen, vandalized or damaged in an accident or other mishap.
- Personal Effects Coverage protects your belongings in case your rental car is stolen. If you have a home or tenant’s insurance policy, this may also cover your personal effects.
- Personal accident insurance covers medical expenses for any injuries you or your passengers may sustain as a result of driving.
All states except New Hampshire and Virginia require drivers to carry minimum liability insurance, and many states also require additional coverage. But a single policy may not cover all of your expenses if you are involved in an accident or other event that causes damage, loss or injury.
Liability insurance covers bodily injury and property damage if you are found guilty of an accident. It is important to note that the protections only cover the other parties involved. Liability insurance will not cover your own losses. Some states also require Uninsured/Underinsured Motorist Insurance (UM/UIM). If you have this coverage, you will be protected if you are involved in an accident with a motorist who does not have insurance or does not have enough insurance to cover your losses. Additionally, a handful of states require personal injury protectionor PIP, which provides coverage if you or your passengers are injured or your car is damaged in an accident.
States also specify minimum liability limits for bodily injury and property damage, usually expressed as three numbers (for example, 25,000/50,000/25,000 or 25/50/25). The first number represents the maximum dollar amount of coverage for anyone injured in an accident. The second indicates the total amount of coverage for all injured persons. The third is the property damage coverage limits. Minimum liability limits vary by state. Contact your state Department of Motor Vehicles or Division of Insurance to find out what your insurance requirements are.
Do I need to buy more than the minimum required car insurance?
Depending on where you live, how often you drive, and what type of vehicle you own, you may want to carry more than the required minimums. You may want to add other types of coverage to your auto policy, such as:
- Collision insurance covers damage to your vehicle in the event of an accident with another automobile or if you hit a fixed object such as a tree or a retaining wall.
- Back to back insurance protects your car from damage caused by a non-collision event such as a tornado, flood, hail or wild animal.
- Gap insurance will cover the difference between what you might owe a lender on a car loan and what the car is actually worth if it’s wrecked or badly damaged.
- Coverage of medical payments (MedPay) Applies to health care costs associated with a covered incident, regardless of fault, for driver and passengers.
- Reimbursement of the rental car is not insurance. This is optional coverage that will pay for a rental car in the event your vehicle is rendered inoperable and needs repair.
Data from our study shows that USAA offers the lowest auto insurance rates, closely followed by Geico. A driver with a clean record can expect to pay just under $1,000 on average to be covered by USAA. It is important to note that the USAA only provides insurance to service members and their families. If USAA isn’t an option for you, Geico may be. Its average premiums are about $150 more for similar coverage. Your actual rates may vary depending on factors such as coverage amounts, what you drive and where you live.
Average prices 2022:
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