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How do I get auto insurance quotes? Do I have to pay for them? What is the secret to getting the best car insurance rates? This article is for people new to car insurance or for people who haven’t had it in a long time.
Can I Get Car Insurance Online?
Yes! In fact, getting car insurance online may be the best way to get it. Like retail companies, insurance companies save money when you buy online. Then they can pass those savings on to you.
Shopping for insurance online saves you from most high-pressure sales tactics. Also, it will allow you to check multiple places for quotes in relatively short amount of time. This can be far less challenging than driving around town to different agents.
People used to pick their insurance by visiting a family friend who sold insurance. Although you are welcome to try that method, it may not be the best way to get quotes.
Usually apps and websites are the best options. They can also take less time than driving to offices or calling several agents. Because of that, I always recommend looking online first.
Are Car Insurance Quotes Cheaper Online?
They can be cheaper online! Because someone clicking on a website is almost free to the company, many insurers will give you a discount for buying online. You can use this to your advantage. Even just saving $20 a month can mean an extra $240 a year!
Getting car insurance quotes online as has the advantage of saving time. Instead of driving around town or making many phone calls, you can just visit a few websites. You can even shop for rates while watching TV.
Between saving time and saving money, online auto insurance quotes are the right way to go!
How To Get Auto Insurance Quotes
There are multiple ways to get quotes online. Generally, the best way is to visit each company’s website and fill out the form for a quote. Although this is time consuming, it is worth it. Saving even a few dollars a month can really add up over time.
If you must, you can call several insurance agents in your area. However, most only represent one insurance company. The agents who represent more than one company may be even worse.
Since insurance sales agents represent the company, they may not put you first. They usually put their commissions first. If you talk to them, double check the rates they quote you.
There are websites that will compare rates for you. But should you use them?
I would recommend always double checking with the carrier’s website before you pay your premium. For example, if you find that Progressive has the lowest rate on a comparison site, go to Progressive.com and see what they quote you. Read to learn more about them below.
Should I Use A Comparison Site?
Comparison sites promise several quotes from multiple insurance companies. However, the insurance companies have to compensate the website owners if you sign up. This makes their costs go up. As their costs rise, so do their prices. Sometimes you may get a cheaper rate on the company’s website.
However, these sites are a good place to start. They can give you a good idea of the cheapest carriers in your area. From there, you can go to those companies’ websites and get a quote there. You may be surprised at the price difference.
When I worked at an insurance agency, I found out that some of the policies we wrote were higher than if you bought directly from their website. At first, that angered me. I didn’t want to give people a bad deal.
However, it started to make sense when I thought about it from the company’s perspective. If they have to pay a commission for a policy, they have to make up that cost. However, if you type in their website, they may not have to pay a commission at all.
Does It Matter Which Insurance Company I Chose?
Short answer is no, not really. The biggest differences are in the customer service and certain extras. For example, some carriers include roadside at no cost. However, the coverage options are virtually the same across companies. Usually, the coverage should be the exact same.
So when you find a cheaper rate from a company you don’t know, go ahead and sign up with them. You really have nothing to lose.
Can Auto Insurance Rates Change?
Yes! Auto insurance rates can change every day. In fact, nothing stops them from changing every minute. My rule of thumb is to expect about the same rates for a week.
It may vary a bit but usually doesn’t change too much during that time. Of course, there are no guarantees. So it may actually be a good idea to jump on a good deal when you see one.
However, it can be horrible to rush on a high rate. This is why I recommend getting at least 10 car insurance quotes before making a decision.
Generally, I see very little change in rates over a few days. If your choice is to go with the first company you chose or risk rates going up, do the later. You probably will save more money in the long run.
Don’t be too afraid of rate increases. It is also good to know that you can change policies whenever you would like. If you paid your premium but found a better rate, you can sign up with the new company. Then the old company will prorate your payment and refund you the rest.
Which Rates Are The Best?
The cheapest rates are usually the best! The name of the company does not matter. So chose the lowest rates. The coverages you buy are mandated by law. If you’re in an accident, any insurance company has to cover you. They can’t deny your claim to keep your money. They must actually pay all their requirements.
You must ensure you have enough coverage to meet your needs. For example, most financed cars will require full coverage insurance. If you are a homeowner, you will want higher liability limits. I would recommend at least 100/300 liability coverage for homeowners.
What Coverages Do I Need?
What coverages do I need to legally drive? That actually depends on your state. Each state gets to set the law that determines how much coverage you have to have, at a minimum.
However, most drivers would benefit from other coverages. Depending on your situation, you may even require a few extra coverages.
What Is Liability Coverage?
Liability coverage is for accidents where you are at fault. It coverages damage to the other vehicle and the medical bills for the other people. Each car insurance policy has a limit on how much it will pay out. This often will prevent you from having to pay to fix another person’s car.
Liability is essential coverage. This is primarily what every state requires. Most car insurance companies cannot sell you a policy without liability coverage built in. Florida would be a clear exception. They require property damage coverage instead as they are a no-fault state.
What Is Collision Coverage?
Collision coverage, as the name suggests, is for when you are in a collision accident. You can use it to have your car repaired if the other driver’s insurance doesn’t pay for it. This allows you to get your car back. If your car is totaled, they will write a check for the value of your vehicle, minus your deductible.
While they will cover the cost of your repairs, you will be responsible for your deductible.
What Is Comprehensive Coverage?
Comprehensive, also know as other than collision, will cover damages to your vehicle when it’s not in a collision accident. If hail rains down and damages your car, it’s a comprehensive claim. If a deer runs into your car and smashes the front of your car, it should be covered by comprehensive coverage.
What Is Full Coverage?
Full coverage is liability with comprehensive and collision coverage. In fact, it is very uncommon to have either collision or comprehensive separately. Full coverage is usually what drivers need.
In fact, if you have a car payment, you’re probably going to need full coverage.
If your car is newer, you probably want full coverage. If you live in an area with crazy drivers, get full coverage.
What Is Uninsured Motorist Insurance?
What happens if some hits your car and they don’t have insurance? Or what if you have a hit-in-run?
Uninsured motorist insurance will cover you in those situations. Everything from mystery door dings to having your car totaled while it’s parked on the road should be covered.
What Is Underinsured Motorist Insurance?
What if the other driver only has the state minimum and you have a nice car? While, you might be able to recover damages above the state minimum. This would make driving a $100,000 car much riskier in most states.
This is where underinsured motorist coverage comes in. They will pay the difference in your expenses and what the other insurance company pays.
What Is Medical Payment (MedPay) Coverage?
Medical Payment Coverage that helps pay the medical bills for you and your passengers. It will help with those bills no matter who has fault in an accident. It’s available in non no-fault states. It can help you with:
- Health Insurance Copayment and Deductible
- Doctor Visits Costs
- Surgery and Imaging Costs
- Ambulance and EMT Costs
The coverage is usually optional. It can be a good idea if you are worried about having to pay for those services yourself.
What Is Personal Injury Protection Insurance?
Personal injury protection covers your medical bills. In some states, your insurance pays your medical bills. This can actually lead to lower rates in some circumstances.
Here are a few states that require personal injury protection:
- New Jersey
- New York
- North Dakota
What Are The Differences Between Medical Payments and Personal Injury Protection?
Personal Injury Protection is required in states where it is offered, called no-fault states. But Medical Payments are always optional in states where is it offered.
Personal injury protection can also help cover lost wages and child care.
What Is Gap Insurance?
If you buy all your cars in cash, don’t worry about Gap. Gap insurance covers the difference between the value of your vehicle and what you owe on it. If your car is totaled and was worth $10,000 but you owe $12,000, gap would cover that difference.
As most people are underwater in their vehicle, I would recommend considering gap.
What Is Towing And Labor Insurance?
This is an optional coverage. It usually is used to tow your car if you can’t drive it. Sometimes this is after a car accident but it can be used if you need your car towed to a shop.
In addition to towing, it may cover tire changes, gas, oil and water delivery, battery and lockout services. These can be an absolute lifesaver when you are stranded someone.
What Is Rental Reimbursement Insurance?
As the name suggests, rental reimbursement insurance will cover the cost of transportation expenses. If your car is in the shop after an accident, it will cover the cost of the rental. It may also cover public transportation fare. If you have to take a taxi, it may cover that too.
Of course, this only applies after a car accident. It is an option coverage you can add to you policy. No policy should require it.
The coverage on each policy has limits. It usually is somewhere around $20-50 a day. There may also be a limit on how many days they will pay for. After that, you will have to pay out-of-pocket. However, there usually is no deductible for rental reimbursement insurance.
What Is Classic Car Insurance?
You may think you would need the same insurance for a classic car. You would be wrong! Classic car insurance can give you a great value while better protecting your class car.
Normally, car insurance only covers the actual cash value of your car. Kelly Blue Book can give you an idea of that. However, you’re classic car may be worth a lot more money!
For example, they may think a 1992 Ford Mustang is only worth $1,000. But you know it would cost at least $10,000 to replace it. Classic car insurance covers the value you specify or appraised value. In my experience, they often have some of the cheapest rates.
Your car may be a classic car as long as it is at least 19 years old. You may also need to drive fewer than 7,500 miles a year to qualify. It will have the same types of coverage as other policies. Because these policies are some of the cheapest, it is worth it to have a separate policy for your classic car.
For example, your household may have a red 1992 Mercedes 500SL, a 2018 Honda Civic and a 2020 Ford Focus. You would want to put the Mercedes on one policy with the other two on a regular car insurance policy.
That way, you can save money but still be fully covered.
What Is New Car Replacement Coverage?
Are you worried about needing a new car? Unfortunately, even with full coverage, usually the insurance company will only pay you what your car was worth before the accident. This may not be enough to replace the vehicle you drive.
Let’s say you buy a brand new $25,000 car. If you get in an accident after owning it for 3 years, it may only be worth $7,000. If that’s the case, you may not even be able to replace it with a comparable car. New Car Replacement Coverage will help you get a new car after an accident. It is an optional car insurance coverage.
With some carriers, if your car is two years old or older, they will full replace your car with a new one. This is great for new car buyers. If having a reliable vehicle is worth buying a new car every few years to you, this is probably a coverage you would want to add to your car insurance plan.
What Is Ride-sharing Coverage?
Do I need new car insurance if I am doing ride sharing, such as Uber or Lyft?
Since ride sharing is business use, most personal car insurance policies won’t cover you. However, the most common rideshare companies do offer protection while you are actually driving the customer. This creates a confusing situation.
To remedy that, several car insurance carriers have made policy coverage options just for ride sharing. These will cover the gap between your personal use of the vehicle and the coverage Uber and Lyft provide for their drivers. This way, you will be covered at all times.
If you drive for Uber or Lyft even occasionally, you should have ride sharing coverage on your policy.
What Is Sound System And Accessory Coverage?
If you spend a bunch of money on tricking out your car, you may want this coverage. It will let you insure all the audio or special equipment you added to your vehicle.
If you would cry over having to replace your sound system, you’ll want this coverage. If you are one of those people who look like they belong on Pimp My Ride, you probably have spent extra money on your sound system and other accessories.
Do I Need Car Insurance With A Driver’s Permit?
In most states, no. The insurance company of the driver will cover a driver with a learners permit. This is one reason why some parents do not let their high school kid get their license.
Unfortunately, young drivers usually have much higher insurance rates than more experienced drivers. For this reason, it may be a good idea to have your child get their permit as young as they can but wait to get a license. This way, they can build up a bit of a driving history before having to pay for insurance.
How Do I Get Car Insurance Without A License?
Again, if you have a permit, you shouldn’t need your own car insurance policy. Some people need car insurance without having a license. Usually, they need an SR-22 or FR-44 Policy. However, that usually is only for people with suspended licenses (see below).
However, you can actually buy a car without license. If that is the case, you probably won’t need insurance until you get a license.
Just as a reminder, there are policies that are SR-22 and FR-44 only policies. They are usually rare but they don’t cover damage to your car. You also usually can’t legally drive with them unless added to a normal car insurance policy. Always make sure you have the right policy for your needs.
Can I Get Car Insurance With A Suspended License?
Yes! You can get SR-22 insurance with a suspended license. Usually, this is actually required by your state to get your license reinstated. Most car insurance carrier will do SR-22 policies. They usually end up being rather cheap since you won’t be driving or insuring a vehicle.
Some people with alcohol or drug-related DUIs may need an FR-44 certificate. Basically, this is when a car insurance company sends a form to the DMV every month so there is a record of you having car insurance. If at all possible, I would recommend doing a paid-in-full option. That way, there won’t be any reason to worry if a premium payment is delayed or bounces.
How Can I Get Cheap Car Insurance For A Teenager?
Car insurance for teenagers can be tricky! Since they don’t have much or any of a driving history, it is likely that they will have higher rates. Of course, this can vary based on geography and on the driver.
Generally, young male drivers have higher rates than young female drivers. This trend continues on through the mid-twenties or so. Unfortunately, there really isn’t a way around it.
After a few years of clean driving, their rates will go down. One tip is to have them attend drivers education. Usually, this will lower their rates in states where it isn’t required.
Several insurance companies will also give them a discount for having good grades. This can also help lower the cost.
However, whatever you do, don’t make your teenager get their own policy! Some parents think they are teaching their children to be responsible by making them pay for their own insurance. While there is nothing wrong with having them work, there is a better method.
Put your teenager on your policy as an additional driver. As he or she may end up driving your vehicle, this should work out. If they need to pay for insurance, have them pay the difference in your rate after adding them. This way, it will be cheaper overall and it won’t destroy your budget.
When I worked as an insurance agent, I saw too many parents make that mistake. They thought their 16 year-old kid needed to be the named insured on a policy. This makes everything more complicated and expensive.
Step One: Shop For Quotes
You’ll want to get as many quotes as you quickly can. I would start with two comparison sites and then go from there. Unfortunately, car insurance quotes are a qualification process. They usually take time. Using a comparison website can speed up the process.
After you have found the cheapest 2-3 rates, go to those companies’ websites and get quotes there. See if they are the same as from the comparison site. Then choose the cheapest.
Step Two: Select The Coverage You Need
This actually goes along with Step One. If you don’t know what you need, read the information above about full coverage and liability. Those paragraphs will give you a pretty good ideal of what you’ll need.
You don’t want to overpay but being underinsured could cost you heavily. Make sure you have a basic understanding of each common coverage option.
Step Three: Pay Your Premium
Most insurance policies last for either 6 or 12 months. However, most default to a monthly payment. Sometimes there is a discount for paying the policy in full. Sometimes it doesn’t matter. If you can save a couple dollars and you’re in a position for it, pay it in full. If there is no discount, just do the monthly payment.
After you have figured out the cheapest carrier for the coverage you need, picked a payment option, go ahead and pay that first premium. After you do that, they will bond your policy making it effective. If you got in an accident even two minutes after that, you would be covered.
Step Four: Print Out Your Insurance Card
You’ll want proof of insurance in your vehicles as soon as possible. You don’t want to be pulled over without your card. You don’t want to have an accident without insurance information. So make sure you have the cards handy. Usually the best spot is in the glovebox next to your car registration.
Naturally, car insurance is a necessary evil. No one likes paying for it but they love piece-of-mind and being taken care of when they’re in an accident. When you’re in an accident, it is great to know that you will be okay.
Please take the time to learn about each coverage. This will help you get what you need without paying for things you’ll never use. For example, most people won’t need sound system and accessory protection in the vehicle. However, if you have Forgiato rims and a couple subwoofers, you probably will want that to be protected.
If you want to learn more about car insurance, be sure to look around at a few more posts. If you can’t find an answer you’re looking for, please comment it down below!
Adam is a license Property and Casualty Insurance Agent for over two years in 25 States. He has worked with 10 different insurances companies. His interests include marketing, insurance, sales, and personal finance.