Step-By-Step Checklist for Getting Car Insurance

Quick Answer

When shopping around for insurance, be sure to find a well-tailored offer by considering:

  • Different car insurance types
  • Meeting your coverage requirements
  • Comparing multiple quotes
  • Applying discounts
Young woman smiling and driving her car on a sunny day

When shopping for car insurance, it's important to ensure you find a policy tailored to your individual needs. That means you'll need to know how much coverage you should have, what type of policy best fits your needs and how to get the best price. Follow these four steps to get the car insurance that's right for you.

1. Understand the Different Types of Car Insurance

To better understand car insurance and determine your needs, you'll need to know the different types of coverage. The most important of them include:

  • Liability insurance: This covers damage you cause to other people's property as well as injuries you are responsible for if you get into an accident. Most states require liability insurance but may have different minimum coverage requirements.
  • Comprehensive insurance: This type of insurance covers damage your vehicle suffers when you are not operating it. This includes theft, vandalism, natural disasters, windshield damage or damage caused by animals.
  • Collision insurance: Collision insurance covers damage you cause to your own vehicle when you are involved in an accident or collide with an object.
  • Uninsured and underinsured motorist coverage: This covers you for expenses if you get into an accident caused by an uninsured or underinsured driver. It ensures you don't have to pay medical bills and repair costs out of your own pocket when the other party can't pay.
  • Medical payments/personal injury protection insurance: This covers medical bills and treatment for your passengers and yourself when you're involved in an accident, regardless of who was at fault. It can fill the gaps or limits in other types of coverage.

Additionally, you can look into extra car insurance coverage that goes beyond the basics, such as roadside assistance, rental reimbursement, umbrella insurance and more. These extras can increase your insurance costs but could offer extra protection when you need it.

2. Review Coverage Requirements and Needs

Once you know the different types of car insurance, you'll need to choose the right amount of coverage for your situation. Most states require a minimum amount of liability and uninsured/underinsured driver insurance. That's a good starting point when deciding on coverage. Here are some additional factors to consider:

  • Whether the vehicle is financed, leased or owned outright: If your vehicle is financed or leased, chances are your lienholder or lender will have minimum coverage requirements. They may require full coverage to ensure the vehicle is sufficiently protected. Before buying a new policy, it's worth checking in with your lender or lienholder to confirm what their specific coverage requirements are. If you own your vehicle outright, you'll be able to choose whatever coverage you want as long as it meets your state's minimum requirements.
  • Cost and budget: When determining cost, you'll need to consider your deductible, or out-of-pocket costs, before your policy kicks in as well as your policy's premium, or cost per term. If you are looking for the cheapest option, minimum coverage might be your best bet. But if you go this route, you'll need to ensure you have enough money in your savings or emergency fund to pay for repairs if your vehicle is damaged.
  • Make, model and year of your vehicle: If you are insuring an older, inexpensive vehicle that you own outright, you may choose to forgo comprehensive and collision insurance since the extra annual cost might amount to more than the vehicle's worth. On the other hand, if you have a new or rare vehicle, full coverage might be the right choice.

If you're still not sure how much coverage to get, consider following the 10% rule. If your annual premium exceeds 10% of your maximum payout, then full coverage might not be worth it. So, if your car is worth $5,000 and your deductible is $1,000, the maximum insurance payout if you file a claim is $4,000. If your annual premium exceeds $400 (the 10%), then getting full coverage might not be a good investment.

3. Compare Quotes From Multiple Insurers

An important part of selecting the right coverage is knowing your options. The best way to do this is to get multiple quotes from different insurance companies.

To give you an initial quote, an insurance company will usually require some basic information, such as:

  • Driver details, including your driver's license number
  • Address
  • Year, make, model and vehicle identification number (VIN) of each vehicle you are looking to insure
  • Annual mileage
  • Desired coverages

To do an apples-to-apples comparison, keep all of this information—especially the coverage you desire—uniform.

Shopping around for insurance manually online can be time consuming, as you'll need to provide the same information with each individual carrier. Instead you could compare your options using a service like Experian's car insurance comparison tool. It allows you to get quotes from over 40 respectable insurance companies at once, all in one place, after putting in your information just one time.

Apart from the level of coverage and price of insurance, there are a number of other factors to consider. They can make your experience with the insurance company much more enjoyable, and include:

  • Access to your policy's billing and servicing through an app or an online account
  • A hassle-free and reliable claim handling
  • Local branches
  • 24-hour contact

4. Look for Ways to Save Money

A one-size-fits-all insurance policy does not exist. Certain insurance carriers are more attractive to certain types of customers than others. What might be your best choice is not necessarily the best choice for a family member, friend or colleague.

The same goes for discounts. When shopping around for insurance, taking your potential discounts into consideration is another important factor. Most insurance companies offer discounts to their customers, but discounts differ from one company to another.

Some discounts offered by insurance companies include:

  • Accident-free discount
  • Violation-free discount
  • Defensive driving course discount
  • Good student discount
  • Homeowner discount
  • Multi-vehicle discount
  • Multi-policy discount

If you are eligible for certain discounts, make sure you include them when shopping for insurance.

Consider Improving Your Credit Score

Insurance companies use detailed algorithms when calculating your insurance premium. Although not allowed in all states, one factor insurance companies may take into consideration where it's permitted is your insurance-based credit score. People with higher credit scores are statistically less likely to file a claim or to fall behind on their policy payments, making insurance companies more eager to insure them and.

One quick way you may be able to increase your credit score instantly is by using Experian Boost®ø. This feature rewards you for past on-time payments for bills not typically included on a credit report, such as your phone, utilities, rent and streaming services. When added to your Experian credit report, these payments may instantly increase your FICO® Score powered by Experian data.