If you drive a car, you need car insurance — and not just because it’s the law in every state except New Hampshire and Virginia.
Fortunately, these days, getting car insurance is usually a simple process. You can buy car insurance online, over the phone, or even in person — but the easiest way to do so is with a few mouse clicks.
5 Steps to Getting Car Insurance
Knowing how to get car insurance for the type of vehicle you have and what your driving habits are is easier when you know your way around the car insurance market. Here’s our step-by-step guide to buying automobile insurance.
1. Figure Out What Type Of Coverage You Need.
The first step in learning how to get insurance on a car? Understanding what car insurance is in the first place and how much coverage you really need.
There’s a veritable dictionary of different auto insurance terms to understand, but one of the most important distinctions is between liability insurance and full insurance coverage.
• Liability insurance is coverage that pays out to another driver if you’re found to be at fault in an accident. Liability insurance is further split into property damage and bodily injury coverage, coverage for vehicular damages and medical expenses, respectively.
• Uninsured/underinsured motorist coverage is another type of liability insurance that pays out in the event of an accident involving another driver who doesn’t have insurance (or much of it).
• Full coverage includes liability insurance but also pays out for damage to your own vehicle, even if you’re at fault. This may include collision coverage, which, as its name implies, pays out in the event of an accident involving another vehicle, and comprehensive coverage, which pays out in the event of non-collision damages, such as fire, falling objects, or glass damage.
• You may also be able to purchase medical payments coverage, which can offset the cost of your medical bills in the event of an accident, personal injury protection insurance, which can help with lost wages and other expenses. These types of coverage kick in regardless of who’s at fault.
Most state laws only require liability insurance — though this varies, as do the minimum policy limits in each state, so be sure to get familiar with your state laws before you go shopping.
Still, full coverage might be a good idea: Even in a minor accident, you might be facing thousands of dollars in repair costs, not to mention random damages like a windshield crack due to a rock kicked up on the highway.
Keep in mind, too, that even full coverage doesn’t mean everything is covered, or coverages are unlimited. How much coverage you decide you want is up to you. It’s worth factoring in the age and value of your vehicle, other coverages you may have that can help, and how high a deductible you could afford to pay out of pocket in the event of an accident. Higher deductibles generally mean lower monthly car premiums — but, of course, you’re on the hook for a larger portion of the expenses if you do need to file a claim.
2. Gather Your Information.
Once you have an idea of what kind of coverage you need, it’s time to get serious about shopping. You’ll need certain information in order to buy an auto insurance policy, so in order to make the transaction go smoothly, it’s a good idea to gather those ahead of time:
• The name and birth date of every driver to be put on the policy.
• The driver’s license number and issuing state of every driver to be put on the policy.
• The driving history (both at-fault and not-at-fault accidents) of every driver to be put on the policy.
• The car’s make, model, and vehicle identification number.
• The car’s current mileage.
• The estimated mileage the car is driven each year, as well as its primary purpose (business or leisure).
• Any car safety features, like car alarms.
• The address the car is kept at most of the time.
• The name and policy number of your current insurance plan, if you have one.
Other information may be required, too, but gathering these details ahead of time should help save you some time.
3. Choose Your Shopping Method.
There are three main ways to purchase car insurance: Directly, through a captive agent, or with an independent broker.
• Buying auto insurance directly (either online or over the phone) from an insurance company means you can get hands-on and do the research yourself. However, getting individual quotes from a variety of different companies can take time.
• Buying auto insurance through a captive agent means you’re working with a representative from a single insurance company, which can be useful if you want a single point of contact who can help walk you through every step of the process. This might also be a good idea if you have more than one insurance policy through the same company because they may offer multi-policy discounts.
• Buying auto insurance through an independent broker can create a bespoke insurance-buying experience where the broker does the footwork of shopping around for the best deal to suit your needs. However, your premiums may include a broker’s fee, pushing them higher.
Each approach has its own drawbacks and benefits, and the best one when deciding how to get auto insurance for you will depend on your preferences.
4. Compare Quotes.
Car insurance is one of those areas of life where you can save a lot of money by shopping around. Of course getting multiple quotes can be time consuming, but given that car insurance premiums can cost more than $100 per month, it might just be worth your time.
Fortunately, these days, there are some great auto insurance comparison websites and apps that can help you see your potential savings by filling out just a single form. (Do be aware that you may start getting phone calls, emails, and letters from insurers eager to acquire your business, however.)
5. Drive Happy — But Check In Regularly.
We’ve all heard the commercials, but it really is true: You may stand to save money by switching your car insurance to a different carrier, so it’s worth checking in at least once a year to make sure you’re happy with your coverage and its cost.
That said, many carriers also offer loyalty discounts to those who stay with their carrier for long periods of time, and your insurer may be able to match a lower offer you get elsewhere. Your car insurance premium may get lower over time if you improve your driving record or your credit history, and you may also be able to score discounts by bundling different types of insurance from the same provider (like renters insurance, homeowners insurance, etc).
Of course, it’s not just monthly costs that are worth checking in on. You may decide you want more or less coverage over time or as your life situation changes, which is another good reason to check in from time to time. Additionally, if you do decide to switch carriers, make sure you’re purchasing a policy of equivalent coverage — otherwise, you’re not saving money on an equivalent product, you’re just buying something cheaper from elsewhere.
Recommended: 5 Steps to Switching Your Car Insurance
Knowing how to buy car insurance might not be exciting, but car insurance is an important financial product that could relieve a financial burden in the case of an accident.
And shopping around doesn’t have to be time-intensive or complicated. SoFi Protect has teamed up with Gabi to offer an easy-to-use auto insurance comparison tool that can help you find the best-priced policy for your specific requirements. Gabi can even help you cancel your old policy — all in just a few minutes.
Photo credit: iStock/LumiNola
Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
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