Tips for New Car Insurance Buyers

Tips for New Car Insurance Buyers

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For first-time buyers, shopping for car insurance can be daunting. If you’re facing high rates, aren’t sure which company to go with, or even when to buy a policy, take a deep breath: You’re not alone. The Bankrate Insurance Editorial Team understands the challenges car owners face when buying car insurance for the first time, and here are some car insurance tips to help you get the right policy at the right price.

Tips for Buying Car Insurance
If you’ve never bought car insurance before, the process may not be as complicated as you think. You’ll need to determine your coverage needs, find a provider that offers the best quote for you, and have your policy set up to be effective the same day you bring your new car home. We’ll dive into each step of the process with car insurance tips from our team of experts.

Determine How Much Coverage You Need
The amount of coverage you need can vary based on your age, where you live, the type of car you drive, your mileage, and your personal preferences, but there are some constants. Each state requires that auto insurance policies include liability coverage, and you may also need to purchase other types of coverage depending on your state’s laws. If your car is financed or leased, your lender will likely require you to get comprehensive coverage — that is, comprehensive and collision coverage — to protect their investment (and yours!).

But purchasing the minimum required insurance usually won’t provide you with enough financial protection, especially if you own a high-value vehicle, have significant assets or potential future income, or live in an area with high income rates. Property crime or car accidents. Let’s review the most common types of auto insurance you can add to your policy:

Collision coverage: Covers damage to your car if it collides with another vehicle or object.

Comprehensive coverage: Covers your car against damage not related to a collision with another vehicle or object, such as a collision with an animal, fire, theft, vandalism, or falling objects.
Personal injury protection (PIP): Covers you and your passengers if you’re injured in a car accident, regardless of who’s at fault. PIP can also cover funeral expenses and lost wages.

Uninsured/Underinsured Motorist Coverage: Covers damages caused by uninsured or underinsured drivers. In some states, it can also protect you in the event of a hit-and-run accident. Some states require uninsured motorist coverage.

Gap Insurance: Covers the difference between the insurance amount and the remaining loan balance if your financed car is stolen or declared a total loss and you still owe more than it’s worth.

The purpose of auto insurance is to allow your insurance company to step in to cover your financial liability if you cause an accident, and to repair or replace your car if it suffers more damage than you can handle on your own. Your auto insurance policy should provide enough coverage to comfortably accomplish these goals. If you’re not sure how much coverage you need, talking to an insurance agent or broker can help you decide.

Determine What Factors You Want in an Insurance Company
All insurance companies offer the same basic types of auto insurance coverage, but not all insurance companies are the same. Consider what’s most important to you when deciding which insurance company to work with:

Customer service: If you’re new to insurance, it may be worth working with a company whose representatives have high ratings.

Cost: New car owners often pay more for auto insurance, especially if they’re under 24 or have limited driving experience. Finding an affordable insurance company may be a priority in your search.

Coverage options: Some insurance companies offer unique coverage options





Coverage Options: Some insurance companies offer unique coverage options that may fit your needs (more on that below!). If you need specific extras that aren’t available everywhere, keep that in mind when shopping.

Local Agents: If you prefer to buy insurance through an agent, your choice may be influenced by the insurance companies that local agents work with.

Mobile Tools: If the right car insurance policy for you is one that you can buy and manage through your phone, look for insurance companies that offer highly rated apps.

Research Available Insurance Companies
Researching insurance companies that offer car insurance in your area can help you find the best one for your needs.

Bankrate maintains a list of the best car insurance companies based on detailed analysis by our insurance editorial team, but you can also do your own research. You might want to consider external rankings from organizations like these:

Assess the insurance company’s financial strength and ability to pay claims.

Highlight: Study of customer satisfaction, claims satisfaction, and digital experience of U.S. auto insurers.
Standard & Poor’s: Assesses an insurance company’s overall financial health and ability to pay claims.
The National Association of Insurance Commissioners tracks each insurance company’s customer complaint rate relative to its market share.
In general, you’ll want to find a company with high scores for customer satisfaction and financial strength, and low scores for customer complaints. However, keep in mind that you’ll need to compare these metrics to the rates each insurance company is offering you.

Compare coverage options
As you research insurance companies, you may find companies that offer other valuable add-ons beyond the standard coverage offered by all companies. These additional coverage options, commonly referred to as insurance riders, can allow customers to customize their policy based on their specific needs.

For example, you may be eligible for accident assistance if you go claims-free for a certain period of time, typically three to five years. If you drive for Lyft, Uber, or other rideshare companies, you may want to explore rideshare insurance.

Learn about discounts
One way to save money on your car insurance is to take advantage of discounts. Most car insurance companies offer at least two discounts that can save you a bit on your insurance premium if you qualify.

Some of the best car insurance discounts include:

Bundle discounts: You may be eligible for a discount if you have a car insurance policy and another type of insurance policy, such as homeowners insurance, with the same insurance company.

Car safety discounts: Some insurance companies offer a discount if your car has extra safety features like running lights or curtain airbags.

Safe driving discounts: You may be eligible for a discount if you have been accident- and traffic-free for several consecutive years.

Paperless or paid-in-full discounts: Many insurance companies offer a discount for simple strategies like choosing paperless billing or paying your premium in full.

Great student discounts: If you’re a full-time student in good standing or have one on your policy, you may be eligible for a discount.
Compare quotes from multiple insurance companies
Most insurance experts recommend comparing quotes from multiple insurance companies when shopping for