How to buy car insurance now

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Whether you do it yourself or work with a professional, the steps to purchasing auto insurance are the same:

1. Determine your coverage needs. How many vehicles do you own? Who will lead them? How far will you commute? What is your budget? These questions will help you decide how much auto insurance you need.
2. Go shopping. This means getting quotes from at least three different companies.
3. Compare policies carefully. Make sure you get quotes for the same amount and type of coverage you currently have. Otherwise, you won’t be able to make an accurate comparison.
4. Ask about discounts. You can save up to 25% on your premium if you have a clean driving record, choose to combine your car and home insurance, insure multiple vehicles on the same policy, serve in the military and more.
5. Select and buy your policy If you have an existing auto insurance policy, make sure the new coverage is in effect before canceling the old coverage.
6. Notify your lender. If you have a loan or lease, you must notify the financing institution that you have updated your auto insurance coverage.

Buying car insurance isn’t just a good idea – it’s the law almost everywhere.

“Having auto insurance is essential because it helps cover the costs of damages or injuries caused by accidents, protecting you from significant financial loss and legal liability,” says Dennis Shirshikov, professor of economics at City University of New York/Queens College .

Whether you’re looking for a policy that only meets the minimum coverage laws in your state or you want bumper-to-bumper coverage, you can buy auto insurance online, over the phone, or in person. It comes down to how much work you want to do and whether or not you want someone to guide you through the process.

Whether you purchase a new or used car, you are required by law to have car insurance.

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Ways to buy car insurance

There are three ways you can buy a car insurance policy:

• Do it online. Most insurance company websites allow you to start the application process online and many also allow you to purchase an auto insurance policy.
• Pick up the phone. In most cases, you can request and purchase coverage by calling an insurer’s customer service number. While most carriers offer 24/7 claims service, policy sales are often limited to business hours.
• Find a local agent or broker. Some insurers, such as State Farm, require customers to work with a nearby agent to complete the purchase process. If you’re not sure which insurer to work with, an independent agent who represents multiple carriers can help.

If you purchase coverage directly from an insurer, you must work with a representative online or over the phone. Some companies also employ so-called “captive” agents who represent that insurer exclusively and can provide policyholders with local services.

“Buying directly from an insurer like State Farm means you’re dealing with them for everything,” says former licensed insurance agent RJ Weiss, a certified financial planner and publisher of The Ways to Wealth, a personal finance website.

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A captive agent can only give you quotes and sell you a policy from the carrier they represent.

If you don’t want to research auto insurers or know which carrier best suits your needs, we recommend that you consider working with an independent insurance agent or broker.

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“Going through an agent or broker can provide quotes from different insurers and offers personalized advice. Many agents will also provide customer service throughout the policy,” says Weiss.

What are some common mistakes when buying car insurance?

It’s easy to make mistakes when purchasing auto insurance, especially if it’s your first time getting a policy. Try to avoid these common mistakes:

• Underinsurance. Don’t settle for your state’s minimum insurance requirements. Experts recommend liability insurance for injuries or property damage you cause in an at-fault accident with 50/100/50 coverage levels. This breaks down to $50,000 in personal injury protection and $100,000 per accident, plus $50,000 in property damage liability. You may also want collision insurance, which will cover your vehicle if it’s damaged or totaled in an accident, and comprehensive coverage for damage caused by weather events, theft or hitting an animal.
• Ignoring policy exclusions. Make sure you understand what is and isn’t included in your policy. “For example, many insurance companies exclude business or commercial use of your vehicle,” says Weiss.
• Choosing a French you can’t afford. A deductible is the money you have to pay before collision or comprehensive insurance to repair or replace your vehicle. Deductibles can range from $2,000 or $500 or less; some policies waive the deductible entirely. When you apply for a policy, you choose the amount, and most insurers will let you adjust it later. The higher the deductible, the lower your premium. But make sure you can afford that high payment before agreeing to a higher deductible.

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