Are you in the market for a new auto insurance policy? Are you looking for how to buy car insurance? Get the maximum protection for your investment at the best possible price.
Read on for your guide to how to buy car insurance.
Step 1: Choose a way to purchase your policy
You can choose to buy a policy directly from an insurance company or through an independent insurance broker.
If you already have homeowners or renters insurance, you likely also have the option of purchasing an auto policy through your current insurer. Choosing to bundle policies may give you a discount of as much as 15% off the usual cost of the policy.
When you’re working with insurance companies, contact each one individually to get your quotes. This is the best approach if you’re only choosing between two insurance companies or between several policies from the same company.
Additionally, if you’re open to purchasing a policy from any company, you’re best off using an independent broker. You only need to fill out one application and the broker will do the research for you. They will pull up several quotes for you to compare and consider.
Step 2: Decide how much coverage you need
When choosing a policy, you can opt for maximum coverage, the minimum required by state law, or any amount in between.
Here are the primary categories of auto insurance coverage:
Liability coverage. This includes coverage for bodily injuries, property damages or auto damages to another motorist if you’re at fault.
Comprehensive coverage. This will pay for any damage and losses to your car that were not caused by another vehicle. This includes damage from inclement weather, theft, floods and more.
Personal injury protection. This covers medical bills for you and your passengers in the event of an accident.
Collision insurance. This covers the damages to your car if it’s involved in an accident.
Uninsured/underinsured motorist protection. This pays for damages caused by another motorist who does not have sufficient insurance coverage.
Gap insurance. This coverage is exclusively for financed or leased cars. It pays the difference between what you owe and what the car is valued at if there were a total loss of the vehicle. Money Federal Credit Union offers GAP coverage for autos financed with us. The coverage can be added at anytime during the loan, but typically not recommended after 18 months in.
There are several coverage add-ons you may be interested in as well, including roadside assistance, rental car insurance, and rideshare insurance for those employed by companies like Uber or Lyft.
Step 3: Determine your risk
Ask yourself these questions to assess your risk of being in an accident or of your vehicle incurring damages:
How many hours do you drive each week? If you drive an excessive amount, you may want to opt for more coverage.
Are you financing or leasing your car? If you are, consider gap insurance, which you typically get from where you finance your loan
Do you drive in high-traffic areas and/or park in an area that has lots of break-ins? Both factors increase your car’s risk of damage and are reasons for increased coverage.
Do you spend many hours driving for business-related reasons? If so, you may need a commercial policy.
Will any of your children be driving your car? If you have a teenager who will be using your car, it’s a good idea to increase your coverage cap.
Step 4: Be prepared to fill out an application(s)
No matter how you choose to apply for car insurance, be prepared to supply the following information:
The year, make and model of your car
Your driving history
Your marital status
Your employment status, details and history
The names and birthdates of everyone who drives your vehicle
The ownership history of your car
Step 5: Get your quotes
You should get your quotes within a few hours of submitting your application, and sometimes as quickly as within a few minutes.
Your quotes will include several options for the deductible and the premium amounts. In general, a higher deductible, which means paying more out of pocket when you file a claim, will give you a lower premium. While this option might mean there’s more money in your wallet each month, it can spell catastrophe for your finances. If your vehicle is stolen or in an accident you may have unexpected bills. Your best option is to take the middle road. Find a plan that offers the maximum deductible you can afford along with the lowest premiums.
Step 6: See if you qualify for a discount
Before signing on a quote, check if you qualify for a discount. Any of the following factors may make you eligible for a cheaper plan:
Your vehicle has safety features or an alarm system.
You’re a military veteran.
You’re a full-time student with a decent academic record.
You have an excellent driving record.
You’ve completed a defensive driving or safety course.
Members of Money Federal Credit Union receive exclusive auto insurance discounts through our partner, Liberty Mutual
Step 7: Choose your policy
Once you have all the you compared several plans, you’re ready to choose a car insurance policy that best suits your needs.
Once you’ve made a decision, be sure to pay your premiums in a timely manner. Additionally, keep your insurance identification card in your vehicle at all times. If you are involved in an accident or your car is stolen, contact your insurance provider ASAP. It’s also a good idea to shop for a cheaper policy once a year.
We hope that helped you figure out how to buy car insurance.