Comparison shopping is crucial if you want to save money on car insurance. Here’s why: Insurers look at similar factors, but they have their own “secret sauce” when it comes to setting rates. So two companies can charge wildly different rates for the same driver.
How to compare car insurance quotes
First of all, every car insurance rate quote you receive should be free, whether it’s from Geico, Farmers or a small insurer you’ve never heard of. Some auto insurers require a down payment to start your policy, but a simple quote estimate should always be free. Here’s how to start comparing quotes.
1. Gather your information
To quickly and easily compare car insurance quotes, have the following on hand:
Personal information: The address, date of birth, occupation, driver’s license and marital status of everyone you want included on the policy.
Vehicle information: Mileage, date of purchase and Vehicle Identification Number (VIN) for each car. Or, if you haven’t purchased the car yet, have mileage, make, model and year handy.
Driving history: Include all claims, violations and tickets you’ve had over the past five years, plus any completed driving courses.
Current or previous insurer’s name for anyone on the policy or in your household. Some insurers won’t cover you without some coverage history, and if you want to exclude anyone living with you from the policy, you’ll need to prove they’re covered elsewhere.
2. Choose the right liability car insurance coverage levels
Liability auto insurance protects you from that worst case scenario by providing a cushion between your assets and the amount you’re on the hook for. For this reason, choosing the right auto liability limits is the most important part of your car insurance quote comparison. NerdWallet typically recommends having at least as much liability coverage as your net worth.
Types of liability coverage
But liability coverage levels come in threes — you’ll probably see something like 50/100/50 up to 250/500/250 in typical policies. You can think of these limits like: individual injuries / total injuries / property damage. Insurers are a little more technical, calling them bodily injury liability, total bodily injury liability and physical damage liability.
They come in thousand-dollar increments, so when you choose 100/300/100 limits, you’re choosing:
$100,000 for bodily injuries per person you injure in a crash.
$300,000 total for all bodily injuries you cause in a crash.
$100,000 for damage to any property you cause in a crash, including cars, buildings and objects like mailboxes and lampposts.
Auto insurance quote comparison tip: When choosing liability car insurance coverage, you’ll want to make sure the highest, middle number is equal to or greater than the value of your house and total savings combined.
Understand car insurance requirements in your state
In certain states, you may be required to have a car insurance policy that includes personal injury protection (PIP), medical payments coverage (medpay) or uninsured/underinsured motorist coverages — or two of the three. If you have medpay you don’t need PIP, and vice versa.
Any car insurance comparison tool you look at should have your state’s minimum car insurance requirements pre-loaded into its options. States requiring PIP or medpay are generally referred to as “no-fault” states, meaning that when injuries occur, each driver in a crash makes a claim with their own insurance company to pay for them. Beyond the PIP or medpay limit, the at-fault driver’s liability insurance kicks in to cover the rest.
3. Decide if you need full coverage car insurance
You’ll notice that none of that liability coverage pays for your car or injuries, nor for any injuries your passengers sustain if you cause a wreck. This is why many people — particularly those whose car isn’t yet paid off — want “full coverage” car insurance. This isn’t actually a type of coverage, but instead typically refers to policies that include liability coverage, plus comprehensive and collision coverages.
In other words, you can’t just click a “full coverage” button when comparing insurance quotes online or buy something called a full coverage auto insurance policy. You’ll need to add collision and comprehensive coverage in the amounts you want.
Comprehensive vs. Collision Coverage
Collision insurance pays for:
Comprehensive insurance pays for:
The value of your car if it’s stolen and not recovered, and damage from:
Auto insurance quote comparison tip: Whatever coverage you choose, make sure you compare the quotes for the same type and amount of coverage so you can find the best price.
4. Collect and compare car insurance quotes
You’ll want to get car insurance quotes from at least two or three companies available in your area to be sure you’re getting a good deal. Consider comparing quotes from regional companies as well as the big companies such as Allstate, Progressive and State Farm. While shopping, make certain that each insurance quote includes:
The same levels of liability and uninsured/underinsured motorist protection.
The same deductibles for collision and comprehensive coverages, if you’re buying them.
The same drivers and cars.
All discounts you’re eligible for (most insurers list the discounts they offer on their websites).
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