How to Buy Auto Insurance [2024]

Shopping around for auto insurance can be confusing, but if you understand the steps involved in how to buy auto insurance, it can be simpler than you think.

Understanding auto insurance before you purchase a policy is crucial, as it will allow you to make informed decisions about what coverages you want to protect yourself and your vehicle on the road.

In this guide, we’ll go over everything you need to know about how to get car insurance, from comparing quotes to understanding your policy. By the end, you should feel confident enough to find an insurer that works best for your needs. So let’s dive right in.

Information Needed To Buy Auto Insurance

How to get auto insurance coverage? The first step in getting car insurance is gathering all of the necessary information you will need when comparing quotes. 

So, what information do you need to get car insurance? You will need to provide details like:

• Your basic information, including your name, address, and phone number
• Your driver’s license number
• The make, model, and year of your car
• Your car’s Vehicle Information Number (VIN) and current mileage 
• The registered owner’s name, previous insurance company (if any), coverage limits, and expiration date 
• The history of the drivers covered by the policy, including any traffic violations, at-fault accidents, and driving courses each driver completed 
• The purchase date of the vehicle
• The intended use of the vehicle

Auto insurance companies do background checks, and they use this information to evaluate your driving history and review any associated records to determine the policy’s payable rates or overall cost. 

One factor in calculating this cost is the kind of car that you drive. For instance, new cars tend to come with higher rates than older models.

Also, if you frequently use your vehicle for long commutes, this will likely be considered when working out your rates.

Read more: How to Buy Vehicles Directly From Insurance Companies

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Choose Coverages Before Buying Auto Insurance 

Once you’ve gathered all the necessary information, it’s time to start shopping around for the coverage you need. There are several types of auto insurance coverage, each with features and benefits that may suit your specific needs.Here are some of the most common types of insurance:

Liability Car Insurance

Liability insurance coverage will cover losses you are legally responsible for when you are at fault in an accident. When your car is in an accident, liability coverage pays for the property damage and/or injuries sustained by the other driver, their passengers, pedestrians, and anyone else involved.

Liability auto insurance features two main types of coverage: 

• Bodily injury liability 
• Property damage liability

Body injury liability pays for medical bills for any injuries you are responsible for in an accident. 

Property damage liability covers damages to a third party’s property due to an accident that you cause. 

It’s important to note that your liability car insurance does not cover damage to your vehicle or injuries you sustain in an accident you cause.

You are required to carry a minimum amount of liability auto insurance in most states, except for New Hampshire and Virginia.

In California, for example, the minimum liability auto insurance requirements are 15/30/5. This means that you must have a minimum of the following:

• $15,000 for injury/death to one person
• $30,000 for total injuries/deaths per accident
• $5,000 in property damage

It’s worth noting that these limits are only the minimum requirements. It’s in your best interest to purchase more coverage than required by law.

Uninsured Motorist Coverage

A study by the Insurance Research Council (IRC) found that 12.6% of drivers in the U.S. do not have insurance. Uninsured motorist insurance coverage is an optional type of car insurance that covers medical and property expenses if you are involved in an accident with an uninsured or hit-and-run driver. 

Read more: Top Uninsured Motorist Insurance Coverage

Underinsured motorist insurance (UIM) will cover the additional costs if the other driver has liability insurance, but it’s not enough to cover the damages. Although it’s not a requirement in every state, uninsured motorist coverage is something every driver should have. (For more information, read our “What are the costs of not having auto insurance?“).

Collision and Comprehensive Insurance

When it comes to the difference between collision and comprehensive auto insurance, you need to understand that, although they are similar, they are not the same thing. These are the two main types of physical damage coverage, and many purchase them together.

• Collision auto insurance coverage. This policy covers vehicle damage caused by a collision with another vehicle or an object (such as a tree). Collision insurance is usually required if you have a loan or lease on your car, but even if you own your car outright, it may be a good idea to have it.
• Comprehensive auto insurance coverage. This policy covers damage to your vehicle that does not result from a collision with another vehicle or object. This includes damage caused by theft, vandalism, weather events (such as hail or floods), fire, animals, and other non-collision-related incidents.

Most lenders will not release the title if you are financing or leasing a vehicle until you provide proof of both types of coverage.

Personal Injury Protection (PIP)

Personal injury protection (PIP) covers medical expenses and lost wages regardless of who is at fault in an accident. The states of Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah currently require PIP coverage. 

This insurance will cover medical costs for the insured driver, passengers, and pedestrians injured in a car accident. Basic coverage typically includes: 

• Hospital bills
• Doctor visits
• Ambulance fees
• Childcare
• Lost wages

Check out our best personal injury protection insurance coverage guide if you are in the market for PIP insurance.

Read more: Top Utah Auto Insurance Providers

Medical Payments Coverage (MedPay)

Medical payments coverage, also known as MedPay, is a type of auto insurance coverage that provides you and your passengers with an additional layer of protection in the event of an auto accident.

If you choose this type of coverage, your MedPay policy will cover any medical expenses incurred regardless of who was at fault for the accident. Typically available in increments ranging from $1,000 to $5,000, this is an excellent option if you desire additional security. 

Although Maine and New Hampshire are the only states requiring drivers to carry this coverage, it can be purchased in most states as an optional add-on. 

Read more: Maine Auto Insurance Guide [Providers + Coverage]

Optional Coverage Types

In addition to the coverage types discussed above, several other optional coverages may be advantageous, depending on your specific situation. These include:

• Rental reimbursement coverage. This policy covers the cost of renting a vehicle while yours is being repaired or replaced due to an accident.
• Roadside assistance coverage. This policy provides access to towing, jump-starting, tire changes, and other services if you experience a mechanical breakdown or other emergencies while away from home.
• Gap insurance. Gap insurance pays the difference between what you owe on your vehicle and its current market value if it is stolen or totaled in an accident.

While add-on coverages will raise your car insurance rates, they can also save you a lot of money on out-of-pocket costs if something happens to your vehicle.

Get Auto Insurance Quotes Before Buying Auto Insurance 

The next step is to get quotes from a few different insurance companies so that you can compare coverage options and prices. Make sure that you read the fine print on each policy to understand what is covered, what’s not, and how much you will be paying. You have a couple of options for getting quotes:

• Get quotes online. You can get multiple free quotes online through insurance comparison sites. This will allow you to compare quotes from different insurers and find the best auto insurance rates. Make sure you compare apples to apples by entering the same information for each quote.
• Insurance agents. Many insurance agents will be happy to provide you with a quote if you give them basic information about your car and driving history.

Many people appreciate the convenience of getting quotes online, while others prefer to speak to someone in case they have questions.

Compare Auto Insurance Companies Before Buying Auto Insurance 

Once you have quotes from several companies, it’s time to compare them. Look at the coverage options, deductibles, and discounts each company offers. 

Also, consider customer service ratings, which you can find from various sources, like the National Association of Insurance Commissioners (NAIC) and Better Business Bureau (BBB). It may seem like the most affordable option is always the best choice, but doing some extra research can help you make an informed decision. 

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Buy the New Auto Insurance Policy and Cancel Your Old Policy

After finding the right policy for your needs and budget, fill out an application online or over the phone with an agent. Once approved, pay your rates upfront or set up a recurring payment plan (monthly, semi-annually, annually, etc.) that fits your budget.

After you’ve purchased a new policy, it’s time to cancel the old one. You may be charged additional fees if you do not cancel your old policy immediately after purchasing the new one, so don’t put it off too long. 

Contact the insurance company directly by phone or email to request a cancellation. If applicable, provide them with proof of payment for the new auto policy. Before you cancel, you should also find out if you can get a refund for unused premiums. Depending on when you cancel your policy, your current insurer may owe you some money.

Read more: How to Cancel State Farm Auto Insurance

Final Thoughts on How to Get Auto Insurance

Car insurance is a legal requirement in most states. While how much auto insurance you should have varies from state to state, getting car insurance is crucial to owning a vehicle. We hope this step-by-step guide clarifies some things about auto insurance shopping. Remember to take your time when shopping around to find the right policy. 

Do your research, compare quotes from different insurers, read through any policy details before signing up, and look for good customer service reviews.

Read more: Auto Insurance FAQ

Case Studies in Buying Auto Insurance

Case Study 1: Liability Car Insurance

John is a responsible driver who wants to ensure he meets the legal requirements for auto insurance in his state. He decides to purchase liability car insurance with coverage limits that exceed the minimum requirements.

John understands that liability coverage will protect his assets in case of a severe accident where he is at fault. By opting for higher coverage limits, John can have peace of mind knowing that his insurance will adequately protect him in case of an accident.

Case Study 2: Uninsured Motorist Coverage

Emily lives in a state with a high percentage of uninsured drivers. Concerned about potential accidents involving uninsured drivers, she includes uninsured motorist coverage in her auto insurance policy.

This optional coverage will provide her with financial protection in case she is involved in an accident with an uninsured or hit-and-run driver. By adding this coverage, Emily can ensure that her medical and property expenses are covered even if the responsible party lacks insurance.

Case Study 3: Collision and Comprehensive Insurance

Alex has recently purchased a brand-new car and wants to ensure it is adequately protected. He decides to include both collision and comprehensive coverage in his policy. Collision coverage will cover damages caused by collisions with other vehicles or objects, while comprehensive coverage will protect against non-collision-related incidents such as theft or vandalism.

By opting for both types of coverage, Alex can have comprehensive protection for his new car and minimize the financial impact of unexpected events.

Case Study 4: Personal Injury Protection (PIP)

Sarah lives in a state where personal injury protection (PIP) coverage is mandatory. She includes PIP coverage in her auto insurance policy to ensure she and her passengers are adequately protected in case of an accident.

PIP coverage will cover medical expenses and lost wages regardless of who is at fault in the accident. Sarah understands the importance of having this coverage as it provides financial support for necessary medical treatment and helps replace lost income during the recovery process.

Case Study 5: Medical Payments Coverage (MedPay)

Mark wants extra financial protection in case of an accident, regardless of fault. He adds medical payments coverage (MedPay) to his policy to cover medical expenses for him and his passengers.

MedPay will provide coverage for medical costs resulting from an accident, regardless of who caused the collision. Mark recognizes the value of having this additional layer of protection to ensure that medical bills are taken care of, alleviating potential financial burdens.

Case Study 6: Optional Coverage Types

Lisa explores additional optional coverage types and decides to add rental reimbursement coverage to her policy. This coverage will cover the cost of renting a vehicle while Lisa’s car is being repaired or replaced after an accident. By including rental reimbursement coverage, Lisa can avoid the inconvenience and financial burden of being without a vehicle during the repair process.

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