How to Get New Car Insurance
Acquiring car insurance for a new vehicle is a crucial step for every car owner. Not only is it a legal requirement in most places, but car insurance also provides financial protection against accidents, theft, and other unexpected events. This guide will walk you through the process of obtaining new car insurance, from understanding your coverage needs to finalizing your new auto insurance policy.
Understanding Car Insurance Basics
Before
diving into the process, it’s essential to understand the basics of car
insurance. Car insurance policies are made up of several different types of
coverage, each offering protection against different risks:
1. Liability
Insurance: Covers damages you cause
to others in an accident, including bodily injury and property damage.
2. Collision
Insurance: Covers damage to your
vehicle resulting from a collision with another vehicle or object.
3. Comprehensive
Insurance: Covers
non-collision-related damage to your vehicle, such as theft, vandalism, or
natural disasters.
4. Personal Injury
Protection (PIP): Covers medical
expenses for you and your passengers regardless of who is at fault.
5.
Uninsured/Underinsured Motorist Coverage: Provides protection if you’re involved in an accident
with a driver who has insufficient or no insurance.
Assess Your Insurance Needs
The first
step in obtaining new car insurance is to assess your individual needs.
Consider the following factors:
- Vehicle Type: Newer, more expensive vehicles typically require higher
levels of coverage.
- Driving Habits: If you drive frequently or in high-risk areas, you may
need more comprehensive coverage.
- Budget: Determine how much you can afford to spend on premiums
and deductibles.
- Legal Requirements: Check the minimum insurance requirements in your state
or country.
Gather
Necessary Information
When
shopping for car insurance, you’ll need to provide certain information to get
accurate quotes. This includes:
- Personal Information: Name, address, date of birth, and driver’s license
number.
- Vehicle
Information: Make, model, year, VIN
(Vehicle Identification Number), and mileage.
- Driving History: Details of any accidents, violations, or claims in the
past few years.
- Insurance History: Information about your previous insurance coverage, if
applicable.
Compare
Quotes from Multiple Insurers
Shopping
around and comparing quotes from different insurers is crucial to finding the
best rate. Follow these steps:
1. Research Insurers: Look for reputable insurance companies with good
customer reviews and financial stability.
2. Get Quotes: Use online comparison tools to check new car insurance or
contact insurance agents to get quotes from multiple insurers and get the cheap
car insurance.
3. Compare Coverage: Ensure that you’re comparing similar levels of coverage
and deductibles from the quotes got from the insurance companies and pick the
better car insurance.
4. Check Discounts: Ask about any available discounts for your new auto
insurance, such as multi-policy, good driver, or student discounts.
Choose
the Right Coverage Options
After
comparing quotes, choose the coverage options that best suit your needs.
Consider the following:
Liability Limits: Choose liability limits that provide adequate protection
without overextending your budget.
Comprehensive and
Collision: Decide if these coverages
are necessary based on the value and condition of your vehicle.
Deductibles: Select a deductible amount that you can comfortably
afford in the event of a claim.
Additional Coverages: Consider add-ons like roadside assistance, rental car
reimbursement, and gap insurance.
Understand
the Policy Terms
Before
finalizing your insurance policy, make sure you understand the terms and
conditions. Pay attention to:
Exclusions: Know what is not covered by your policy.
Claims Process: Familiarize yourself with how to file a claim and the
timeframe for doing so.
Payment Terms: Understand your payment options and schedule, including
any fees for monthly payments.
Purchase
Your Policy
Once
you’ve chosen the right policy, it’s time to purchase your insurance. Follow
these steps:
1. Review the Insurance
Quote: Ensure that all the
details are correct and that you understand the coverage.
2. Contact the
Insurer: Reach out to the
insurance company to finalize the purchase. You can buy the new car insurance
by online, over the phone, or in person.
3. Make the Payment: Pay the initial premium to activate your coverage. Some
insurers may offer discounts for paying in full upfront.
4. Receive Proof of
Insurance: Get your insurance ID
card or proof of insurance document. Keep this in your vehicle as proof of
coverage.
Cancel
Your Old Policy (If Applicable)
If you’re
switching from an old policy to a new one, don’t forget to cancel your old
insurance policy. Here’s how:
1. Contact Your Old
Insurer: Notify your previous
insurance company that you want to cancel your policy. Provide them with the
effective date of your new coverage.
2. Request a Refund: If you’ve paid for coverage beyond your cancellation
date, ask for a prorated refund.
3. Confirm
Cancellation: Get written confirmation
of the policy cancellation to avoid any future disputes.
Tips for Lowering Your Car Insurance Premium
Getting
the best deal on your car insurance involves more than just shopping around.
Here are some additional tips to lower your premiums:
1. Maintain a Clean
Driving Record: Avoid accidents and
traffic violations to keep your rates low.
2. Bundle Policies: Combine your auto insurance with other policies, such as
home or renters insurance, to get a multi-policy discount.
3. Increase Your
Deductible: Opting for a higher
deductible can lower your premium, but make sure you can afford the
out-of-pocket cost in the event of a claim.
4. Take Advantage of
Discounts: Ask about discounts for
things like good driving habits, completing a defensive driving course, or
having safety features in your vehicle.
5. Review Your
Coverage Regularly: Reassess your
insurance needs periodically and make adjustments to your policy as necessary.
Standard
Types of Required New Car Insurance
When you
purchase a new car, there are several types of insurance coverages that you may
need to include in your policy. Here's an overview of the standard coverages:
1. Bodily Injury
Liability Insurance: Required
by most states, this coverage pays for injuries you cause to other people in an
accident.
2. Property Damage
Liability Insurance: Also
required by most states, this coverage pays for damage you cause to other
people's property.
3. Uninsured Motorist
Bodily Injury Coverage: Required
by 20 states, this protects you if you're injured in an accident caused by an
uninsured driver.
4. Underinsured
Motorist Bodily Injury Coverage: Required
in 12 states, this covers your medical expenses if the at-fault driver doesn't
have sufficient insurance.
5. Personal Injury
Protection (PIP): Required by 15
states, PIP covers medical expenses, lost wages, and other costs regardless of
who is at fault.
6. Medical Payments
(MedPay): Required or must be
offered in 10 states, this covers medical expenses for you and your passengers,
regardless of fault.
7. Collision Coverage:
Required by lenders, this covers the
cost of repairing or replacing your car if it's damaged in an accident.
8. Comprehensive
Coverage: Also required by lenders,
this covers damage to your car from non-collision events, such as theft, fire,
or natural disasters.
No state
mandates coverage specifically for damages your car may sustain. However, if
you have a lease or loan on your new car, your lender will require you to have
both collision and comprehensive insurance to ensure you can cover the repairs
or replacement of your vehicle in the event of an accident or other damage.
How Much
Does New Car Insurance Cost?
For a
good driver with full coverage, the average cost of insuring a new car is
approximately $2,150 per year.
|
Company |
Average Insurance
Cost Per Year |
Average Insurance
Cost Per Month |
|
Allstate |
$3,000 |
$250 |
|
American Family |
$2,176 |
$181 |
|
Auto-Owners |
$1,628 |
$136 |
|
Erie |
$2,144 |
$179 |
|
Farmers |
$2,381 |
$198 |
|
Geico |
$1,716 |
$143 |
|
Nationwide |
$2,041 |
$170 |
|
Progressive |
$2,157 |
$180 |
|
Safe Auto |
$2,647 |
$221 |
|
State Farm |
$1,959 |
$163 |
|
Travelers |
$1,852 |
$154 |
|
USAA* |
$1,412 |
$118 |
|
Westfield |
$1,759 |
$147 |
New Car Insurance FAQ
Do I Need Car Insurance Before I Buy a New
Car?
Yes, you’ll
need car insurance to drive a new car off the dealer’s lot. Car insurance is
legally required in all states except New Hampshire, South Carolina, and
Virginia, but even in those states, it's smart to have insurance when you buy a
vehicle. Additionally, if you have a car loan or lease, your lender or leasing
company will likely require you to carry collision and comprehensive insurance.
Can I Buy a Car and New Car Insurance on the
Same Day?
Yes, you
can typically buy car insurance and a new vehicle on the same day. Often, you
can purchase a new car insurance policy in less than an hour. Once you submit
your payment, you can usually download a proof of insurance card on your mobile
device or print it out. However, to find good coverage at a reasonable price,
it’s recommended to research and shop around ahead of time.
Do I Need Full Coverage Car Insurance for a
New Vehicle?
"Full
coverage car insurance" typically refers to a policy that includes
liability insurance, collision insurance, and comprehensive insurance.
Depending on your state laws and whether you have a car loan or lease, you may
need all three types of coverage for your new car. However, these three
coverage types alone might not be sufficient for your needs. Consider
additional coverages like uninsured motorist coverage and rental reimbursement
insurance. It’s a good idea to speak with your insurance agent to decide how
much car insurance you need.
How Soon After Buying a Car Do You Need
Insurance?
You need
car insurance immediately when you buy a car in most states to legally drive on
public roadways. If you have an existing auto policy, most car insurance
companies provide a grace period, typically lasting between seven to 30 days,
during which your car is covered before you must update your policy with the
new vehicle’s information.
Which Insurance Is Best for a New Car?
A full
coverage car insurance policy is usually the best for a new car because it
includes liability insurance as required by your state and comprehensive and collision
coverage that cover your car. Collision insurance pays for repair or total loss
of your car from damages sustained in an accident, while comprehensive
insurance covers incidents like theft, fire, vandalism, falling objects, severe
weather, floods, or striking an animal. To find the best price for your new car
insurance policy, compare car insurance quotes from multiple insurers.
Common Mistakes to Avoid
Avoid
these common mistakes when getting new car insurance:
1. Not
Shopping Around: Failing to compare car insurance quotes from multiple insurers
can lead to higher premiums.
2.
Choosing the Minimum Coverage: While it might save money upfront, the minimum
coverage may not provide adequate protection.
3.
Overlooking Discounts: Not asking about available discounts can result in
missed savings opportunities.
4. Not
Reading the Fine Print: Failing to understand the policy terms and exclusions
can lead to surprises during a claim.
5.
Delaying Coverage: Waiting too long to purchase insurance can leave you without
coverage and potentially result in legal penalties.
Conclusion
Getting
new car insurance is a critical step in protecting yourself and your vehicle.
By understanding your needs, gathering the necessary information, comparing
quotes, and choosing the right coverage, you can secure a policy that offers
both protection and value. Remember to review your policy regularly and make
adjustments as your circumstances change. With the right approach, you can
navigate the car insurance landscape confidently and find the best coverage for
your needs.
Acquiring
new car insurance doesn't have to be a daunting task. By following this
comprehensive guide, you can make informed decisions that ensure you get the
best new car insurance coverage at the most competitive price. Start by
understanding your auto insurance needs, gather the necessary information, and
compare quotes from multiple insurers. Choose the right coverage options,
understand the car insurance policy terms, and complete the purchase
confidently. With careful planning and attention to detail, you can protect
your new vehicle and enjoy peace of mind on the road.