How to Shop for Car Insurance Quotes

Shopping for car insurance can seem daunting, but knowing just a few simple steps can make the process much easier. A little preparation can go a long way. Whether you’re a first-time car owner, switching insurers, or seeking specialty coverage, you should understand your coverage needs and compare policies.

It’s similar to buying clothing: You should know your size and style preferences before you head to the store so you can quickly narrow your choices and find the best fit. Researching and comparing options allows you to find a policy that fits your needs and budget, just like the perfect pair of jeans.

Car insurance basics 

Learning the basics of car insurance terms is a good idea before looking for coverage. Here are some standard terms you need to know:

• Policy: This is a written agreement that describes what your coverage includes and excludes, as well as details like the deductible and limits that may apply.^[1]

• Premium: This is the amount of money you pay to the insurance company in exchange for coverage, usually in monthly installments.

• Rate: This is the cost of one unit of coverage. Insurance companies calculate premiums by multiplying the rate by the coverage needed.

• Deductible: This is the amount you pay out of pocket before your insurance coverage kicks in. Be sure to choose an amount you can afford to pay if you need to file a claim.

• Coverage: This specifies the amount of financial protection for losses and damages to your vehicle or third-party liabilities. Coverage types and policy limits can vary by state, so make sure you’re familiar with your state’s laws.^[2]

• Claim: This is a request for payment from the insurance company following a covered loss or damage.

See Also: Average Cost of Car Insurance

How to shop for car insurance

To find and purchase car insurance coverage that works for your insurance needs, follow these steps that highlight how to gather necessary information, make coverage decisions, and compare and research auto insurers before finalizing your car insurance purchase.

1. Gather information

2. Consider coverage needs

3. Identify discounts

4. Compare quotes

5. Check out reviews and stability

6. Purchase and finalize

Step 1: Gather information

States regulate insurance, so begin by researching your state’s minimum insurance requirements, which vary from state to state. To determine the coverage you need, you must also consider your personal factors, such as driving history, age, and vehicle type.

Last but not least, you must decide if you’d rather work with a large national insurer or a local or regional provider. Large companies might offer discounts and other perks, while local companies may provide more personalized service and a better understanding of your area.

State minimum requirements

Each state has its own minimum insurance requirements that drivers must purchase to operate a vehicle legally. You can also visit your state government’s website, call your local Department of Motor Vehicles (DMV), or ask your insurance agent.

The minimum required coverage may not fully protect you and your assets, so you may want to consider purchasing additional coverage.

Factors auto insurers consider

Auto insurers consider many factors, such as driving history, vehicle type, age, and location, before giving you a car insurance rate.

• Mileage: Your mileage is the number of miles you drive the vehicle. It also includes your purpose for driving, such as commuting, business, and personal use.

• Vehicle type/condition: Car type, make, model, year, and safety features affect car insurance quotes. Riskier cars with higher repair costs generally have higher car insurance rates.

• Vehicle financials: Insurance companies may view people who own their cars as lower risk than those who lease. Because car owners have a bigger financial investment in their vehicles, insurers may think they have more incentive to keep their vehicles in good condition.

• Location: Insurance companies use location data to assess factors like the amount of traffic, the crime rate, and the area’s weather. All play a role in how much risk the driver poses, and a higher risk status can mean higher premiums. Rates may vary by state, city, and ZIP code.

• Driving history: Driving history indicates how likely a driver is to have an accident. Drivers with a clean record generally get more favorable rates than those with a history of accidents or traffic violations.

• Who drives your vehicle: Having multiple drivers on your policy means more people could possibly be involved in an accident, which increases the risk of a claim and your insurance rates. And each driver’s history affects rates.

• Personal information: Personal information — such as age, credit history, gender, marital status, employment, and education — affect your risk assessment and insurance rates.

Narrow down the desired type of insurer

When learning how to shop for car insurance, it’s essential to know the different types of insurers available. Insurers can be large, well-established companies or smaller, more niche providers. Some insurers work better for some drivers than others, so knowing what to look for is crucial.

When evaluating insurers, consider coverage options, customer satisfaction, financial stability, and pricing factors. You should also compare quotes from multiple providers to ensure you choose the right car insurance policy at the best price.

Step 2: Consider coverage needs

The car insurance coverage you need can vary depending on factors such as the car’s value, your driving habits, and your financial situation. Similar to putting a puzzle together, you must find the right combination to ensure adequate coverage for your vehicle.

Coverage types

Liability coverage

State minimum requirements vary from state to state but usually include bodily injury and property damage liability. Both coverages protect drivers against financial loss. Bodily injury pays costs related to the injury or death of others, while property damage liability covers damages to other people’s property.^[3]

Collision coverage

This covers damages to your vehicle, regardless of fault. If your car has damage from a collision with another vehicle or object, like a fence or building, this coverage helps pay for repairs or replacement.

Comprehensive coverage

This covers damage from non-collision events, such as theft, vandalism, fire, natural disasters, and hitting animals. It also sometimes pays for windshield repair or replacement.

Full coverage

This packages several insurance protections into one convenient policy. Full-coverage insurance provides multiple coverages in one place, all for one price. It often includes liability, comprehensive, collision, uninsured/underinsured motorist, and other insurance coverages your state requires.

Personal injury protection (PIP) coverage

This provides coverage for medical expenses and lost wages if you suffer an injury in a car accident, regardless of fault. It also covers passengers in your car and injured pedestrians if you cause an accident.

Medical payments coverage

This helps pay for medical expenses due to an accident, regardless of fault. It also covers any passengers in your vehicle during the accident.

Gap insurance

This covers the difference between the amount you owe on your car loan and your car’s current value in case you total the car and what you owe exceeds the current value of the car.

Uninsured/underinsured motorist coverage

This reimburses you if an uninsured or underinsured driver causes damage to you or your vehicle. Some auto insurers combine the two policies, but you may purchase them separately.

Add-ons and riders

These provide additional coverage beyond a basic policy. Common add-ons and riders for car insurance policies include rental car reimbursement, roadside assistance, and extra equipment coverage.

Step 3: Identify discounts

Identifying discounts is important when shopping for auto insurance because they can help you secure the lowest rates. Start by reviewing your current policy to see what discounts you already have. Then, contact your insurance company to inquire about additional discounts, such as safe driver, affiliation, multiple policy, and loyalty discounts.^[4]

You can connect with your insurance company by calling its customer service line, visiting its website, or going to a local office. It’s helpful to have your policy information on hand when contacting your insurer, as well as a list of the discounts you’re interested in.

See More: Car Insurance Discount Guide

Step 4: Compare quotes

Comparing quotes from different companies can lead to lower rates on your premium. While some insurance companies offer quotes directly, a comparison-shopping site like Insurify allows you to compare quotes from multiple insurers at once to help you find the cheapest car insurance.

You’ll enter basic information about your car, driving record, and location and answer a few questions to identify discounts. However, avoid lead-generation sites that sell your information. Make sure the site is trustworthy and legitimate to avoid spam and unsolicited calls.

Step 5: Check out reviews and stability

Before choosing an auto insurance company, make sure to research its reputation. Review feedback from customers to help you determine whether the company works well for you. To save time and make a well-informed decision, look to reputable quote-comparison sites to access comprehensive reviews of car insurance companies.

Step 6: Purchase and finalize

You can purchase car insurance directly from an insurance company, through an insurance broker, or by using online quote-comparison tools. Before finalizing your policy, review the details of your insurance coverage, including your policy documents, and make sure everything is accurate.

If you have an existing policy, you’ll need to cancel it. Make sure you select the right start date to avoid a lapse in coverage. When you receive your new insurance cards for proof of coverage, keep a copy in your vehicle.

Learn More: How to Cancel Your Car Insurance

How much does car insurance cost?

It depends. Various factors influence car insurance costs, and each auto insurance company calculates policyholder premiums uniquely. Auto insurers commonly consider a person’s driving record, credit history, age, vehicle type, chosen coverage, and more when determining rates. Your driving history helps insurers decide how much of a risk for future accidents and claims filing you pose.

On average, car insurance costs U.S. drivers $196 per month for liability coverage. Internal data shows that insurers offer rates ranging between $60 and $283 per month for liability coverage. For a full-coverage policy with more protection, drivers pay $295 per month on average. Auto insurers offer full-coverage rates between $75 and $451 per month, according to Insurify internal data.

How much auto insurance do you need?

Exactly how much auto coverage you need entirely depends on your insurance needs, financial situation, vehicle type and condition, leasing requirements, and more. Beyond fulfilling your state’s minimum required liability insurance, you’ll need to decide on an amount of coverage that makes sense for you.

Drivers with a particularly old or low-value vehicle, for example, may want to skip collision coverage and purchase the bare-minimum required liability coverage. Owners of new, expensive, or luxury vehicles will likely want to purchase a more robust full-coverage policy. And, if you financed your car through a loan or lease, your contract may even include a requirement to purchase comprehensive and collision coverage.

Shopping for car insurance FAQs