How to Shop for Car Insurance
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Recent data from the Bureau of Labor Statistics reveals a staggering 18% surge in car insurance rates since July of last year. And some states are seeing steeper increases than others, especially New Mexico, Nevada, and New Jersey. With no end in sight, shopping around for car insurance rates is more important now than ever.
Comparison shopping as you near your policy renewal comes with many benefits. Saving money is the most obvious benefit, but you may also find better-value policies, uncover new discount programs, and fine-tune your coverage.
Get Cheaper Car Insurance Quotes in Minutes
- Comparison shop methodically: Get quotes from multiple insurers for the same coverage types, coverage levels, and deductibles.
- Purchase wisely: Confirm the policy start date, pay for your new coverage, and notify your old insurer to avoid a coverage gap or double paying.
- Shop every six months: Regularly review and update your policy to catch errors — insurers’ offerings change over time — adjust coverage, and secure the best deal.
4 Simple Steps to Shopping for Car Insurance
Getting a new car insurance policy is as easy as four quick steps. Click the links below to jump to each step, or keep reading to learn more.
- Decide how much coverage you need
- Gather your information
- Compare car insurance quotes
- Purchase your auto insurance policy
Step 1: Decide How Much Coverage You Need
Before getting quotes, consider your coverage options, limits, and deductibles. You should consult your current car insurance policy to understand your coverage.
Here are the most common coverage types. You may need all or most of them.
|Coverage Options||What It Covers|
|Bodily injury liability||Medical expenses for others if you’re at fault in an accident|
|Property damage liability||Damages to others’ property caused by your vehicle|
|Collision coverage||Damage to your car if you’re in an accident, regardless of fault|
|Comprehensive coverage||Damage to your car from non-collision events, like theft, vandalism, or natural disasters|
|Medical payments (MedPay)||Medical expenses for you and your passengers, regardless of fault|
|Personal injury protection (PIP)||Medical expenses, lost wages, and more for you and your passengers, regardless of fault|
|Uninsured and underinsured motorist coverage (UI/UM)||Your medical costs and damages if you’re hit by a driver with insufficient or no insurance|
Every state has unique minimum liability insurance requirements. Your lender or leasing company typically has additional requirements you must follow to comply with your loan or lease agreement.
The personal factors below are also important to consider:
- The value of your vehicle
- How many passengers you drive
- How often you drive
- The rate of uninsured drivers where you live
Finally, don’t be afraid to get quotes for different coverage levels from the same insurer. Often, higher coverage limits come with only modest increases to insurance premiums.
Step 2: Gather Your Information
Insurance companies will likely ask for your personal information, vehicle information, and driving history (claims, traffic violations, and car accident history) to provide you with a quote. To purchase your policy, you’ll need to provide the following information:
- Driver’s license number
- Social Security number
- Vehicle identification number (VIN)
- Lender or leasing company
- Current insurance coverage levels
- Estimated annual mileage
- Additional drivers’ names, driving history, and license numbers
- Payment information
To earn some insurance discounts, you may need additional information, such as:
- Military ID (military discount)
- Defensive driving course certificate (defensive driving discount)
- Report card or dean’s list letter (good student discount)
- Proof of homeownership (homeowner discount)
- Proof of membership in certain organizations (affinity discount)
Step 3: Compare Car Insurance Quotes
Here’s how to compare auto insurance quotes step by step to ensure you get the best coverage at the best price.
- Gather multiple quotes from the best car insurance companies (at least three different companies). This makes it more likely you’ll find a low price.
- Standardize your comparison by getting quotes for the same coverage options, limits, and deductibles. This ensures you’re making a direct comparison of each policy.
- Make note of discounts and programs you can benefit from with each company, as these can lower rates or increase the policy value. Common discounts include vehicle safety, multi-policy, telematics, and pay in full.
- Review company reviews and ratings from multiple sources. This will give you a good idea of the level of claims service and customer satisfaction you can expect. Check out sites like ConsumerAffairs, Trustpilot, and the Better Business Bureau for customer opinions and J.D. Power and AM Best for company ratings.
- (Optional) Call each insurer to get an idea of how easy it is to contact them and how friendly and knowledgeable the insurance agents are — bonus points for calling the claims department as well.
- (Optional) Review the insurance company website and mobile app to ensure the technology is user-friendly.
Using an insurance-comparison site can make this process more streamlined — just beware of lead-generation sites that don’t produce actual quotes.
Find Your Best Rates in Minutes
Step 4: Purchase Your Auto Insurance Policy
Once you’ve selected your new insurer, purchasing a new auto policy involves the following essential steps.
- Confirm the effective date of your new policy. It should begin on or before the day your current policy ends (this ensures you don’t have a lapse in coverage).
- Finalize and pay for your new policy, typically done online, over the phone, or in person.
- Notify your current insurer that you’re canceling your policy — you may need to do so in writing.
- Confirm with your old insurer that it has everything needed to cancel your policy.
Following these best practices ensures you don’t go a day without insurance or pay for two policies at the same time.
Why You Should Shop for Car Insurance Every Six Months
There are many reasons to shop at least every six months, but here are the most compelling.
You’re more likely to catch errors
Reviewing your current policy ensures you add all the coverages you need when generating quotes and comparing policies apples-to-apples. You may catch an error during this process, such as missing coverages.
You can review your coverage levels
Even when there are no errors — you may need to adjust your coverage levels. For example, your car may have depreciated to under $5,000 in value, so purchasing additional coverages like comprehensive or collision might be unnecessary.
You can save money
Insurance companies change rates constantly, so the cheapest option today isn’t guaranteed to be the cheapest tomorrow. Comparing rates is the best way to find the lowest car insurance rates from the best companies.
Shopping for Car Insurance FAQs
Shopping for car insurance can be overwhelming, especially for people less familiar with the industry. That’s why we’ve answered some of the most common questions about shopping for policies below.
When should you shop for new car insurance?
It’s a great idea to shop for car insurance every time your policy is up for renewal (typically every six months) or if you’ve experienced any major life changes, like buying a new car, moving, adding a driver to your policy, or significantly altering your driving habits.
How do you find the best car insurance company?
You can find the best car insurance company by reading customer reviews, comparing quotes and policies, and assessing coverage options, services, discounts, and ease of access (e.g., website, mobile app, 24/7 customer service). There are many different ways to evaluate a company, so be sure to center your needs and preferences in the process.
What factors should you consider before buying auto insurance?
You should consider your personal factors, including your budget, driving record, desired coverage, personal preferences, deductible levels, and whether you need additional riders (e.g., gap insurance, rideshare coverage). If you plan to bundle your insurance products, you’ll want to know which policies to bundle.
Which company has the cheapest car insurance rates?
There’s no universal cheap insurer because many factors influence your rates, including your location, age, driving record, and coverage preferences. That’s why you should get several quotes customized to your driving profile.
State Farm, GEICO, and Progressive offer the lowest rates nationally, according to our analysis. But don’t rule out smaller, regional companies. They often offer better rates than large national brands.
- Bureau of Labor Statistics, “Consumer Price Index – September 2023,” Accessed October 16, 2023.
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