How to Buy Auto Insurance

Before you buy, (1) gather your paperwork, (2) determine the coverage you need, and (3) compare quotes to lower your auto insurance rates by up to 20%.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
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UPDATED: Apr 23, 2020

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Things to Remember...
  • Before you purchase auto insurance, you need to make sure you gather all necessary paperwork
  • You also need to figure out what types of insurance and how high of a deductible you need
  • Save money by comparing several different insurance policies from a variety of providers

Get organized. That’s the most beneficial tip to get going on buying auto insurance.

Start by collecting information:

  • Dig out your driver’s license
  • Find your most recent insurance policy paperwork
  • Locate your car information such as VIN, year, make and model
  • Note any types of big changes since your last policy renewal

Is Junior about to get his license? Are you newly divorced or just getting hitched? Kids moving out or returning?

If you are considering buying a new car, moving, adding, or dropping drivers, keep the information you are about to collect handy.

Changes such as the ones listed above may provide additional leverage with pricing and force changes to your auto insurance policy.

Enter your ZIP code into the FREE tool at the top of this page to compare policies.

Gather Policy Paperwork

Break down the information collection even further by category. Start with your own paperwork.

Policies let you know the following:

  • How much insurance you bought
  • Your VIN number
  • Your driver’s license information
  • How much your policy cost

However, policies will not tell you:

  • What changes you must make
  • If your insurance carrier can financially pay claims
  • If your insurance carrier is efficient with claims processing
  • If it’s time to drop collision insurance

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What’s the Point?

This information is all a part of your insurance toolbox and will help you save money and tailor your insurance to suit your changing needs.

The next step is getting out there and finding out what’s new in insurance land.

Plug in the information that’s on your policies, including that of new drivers and new cards or addresses. Delete old information such as former spouses and kids who have left the nest.

Easy enough. Now, go ahead and compare prices. Quotes are quick and free.

Quotes for too many companies with too many variables for your coverage is a tough spot to find yourself. Be clear about what you need.

Determining Insurance Coverage and Deductibles

If you buy all the coverage at the amounts your company suggests, you might be over-buying coverage.

Do not buy from a place of fear, but, also, do not let yourself be underinsured.

  • Buy at least the state minimum
  • Choose deductibles you can afford to pay over and over within a year
  • Buy bodily and property liability coverage according to your asset holdings
  • Be honest about how much you drive

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How to Save Money

Let’s face it, the reason you are shopping around for coverage is to save money. Otherwise, you would just have hit the “renew” button on your present carrier’s email. Right?

Now that you know how much coverage to buy, and who and what you need to cover, you are in a great place to start shopping competitively.

Return to the online quote systems and compare insurance policies once again. It’s always the fastest way to find free quotes and gather information about what’s available.

Once you receive quotes, research the insurance companies that are supplying insurance quotes.

One might offer a great face of customer service when they are trying to sell you a policy. Yet, when it comes time to make a claim, the carrier may be slow to pay, resist paying on legitimate claims or just not have the money to pay to you.

The way around this situation is to use the power of the Internet. Read customer reviews. They are readily available and are a treasure trove of great information about recent issues.

Likewise, check out the financial picture for your potential and present insurance carrier. The point is for your insurance supplier to pay out on claims in a timely manner.

If they are slow to pay it can indicate financial difficulties. Check out the big rating agencies, such as A.M. Best and Moody’s. These two companies rate the creditworthiness of companies.

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Mind Your Credit

Another savvy move to make before going on a car insurance shopping adventure is to check your own credit.

Federal law requires Equifax, Experian and TransUnion to give you your credit report free once a year at annualcreditreport.com.

It does not count as a ding to your credit when you go through this process to check your own credit. When potential employers and companies check your credit it can adversely impact your own credit score and FICO score.

When your score drops, lending rates, utilities, and insurance even can cost more. Be wise and check your credit all at one time.

If you contact 10 insurance carriers for service, all 10 might pull your credit report. Because it’s occurring within a set 30-day window, those credit checks all count as one credit review, not as 10.

Delete Inaccuracies

If your insurance rates are high and you do not know why, simply ask. It could be that you missed some credit card payments or that your short sale was misreported to the credit bureaus.

If you see your report before shopping for insurance, you buy yourself time to correct that information.

Just dispute and shop for car insurance. The items in question will be listed as “in dispute” and will not impact your credit as much.

How to Save

Now that you have debugged your system and located the financially stable and responsible insurance carriers, you are ready to save some money while shopping for coverage.

Your list of good providers might be down to three or five.

  • Take safe driving classes to save big on coverage for a few years
  • Park your car in a garage overnight
  • Buy renter’s, homeowner’s, boater’s insurance all from one carrier to cut insurance costs even more
  • Announce your child’s great report card to your insurance carrier for a discount

Free Auto Insurance Comparison

Enter your zip code below to view companies that have cheap auto insurance rates.

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Sticking with the Old Standby?

Before you say, “I’ll just use the same carrier I always have,” realize they might be taking you for a ride.

Some carriers will reward your commitment to being their customer with rate drops, accident forgiveness, etc. Others will increase your rates quietly over the years, even though you can save hundreds just by shopping around with other carriers.

Take the time to shop for insurance coverage by gathering necessary information.

Do your homework and make sure you have the best carrier for your needs. Be sure to compare auto insurance policies by using the FREE tool at the top of this page.

FREE Auto Insurance Comparison

Compare quotes from the top auto insurance companies and save!

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