What Do You Need to Get Car Insurance?

What Do You Need to Get Car Insurance? article image.

When you're shopping around for car insurance, having the right information ready before you go online or call an insurance agent can help make the process as painless as possible. Insurance companies' requirements may differ slightly, but insurers are likely to need some information about the vehicles you want to insure and the people who'll be driving them before they're able to provide a quote. Here's what you need to know to be prepared.

What Information Do I Need to Provide to Get Car Insurance?

Whether you shop for car insurance online or contact an insurance agent, having all the necessary information handy will help speed up the process. In addition to the basics such as your name, address, and age, you'll want to have the following at the ready:

  • Vehicle information: Know the make, model, year and vehicle identification number (VIN) for every vehicle you want to insure. Also list any anti-theft or safety features, such as anti-lock brakes or car alarms, on each vehicle.
  • Average annual mileage: Be prepared with a rough estimate of how many miles each vehicle you're insuring is driven each year.
  • Driver information: You'll need driver's license information for yourself and anyone else in your household who'll be covered on the policy.
  • Driving record: Before issuing a policy, the insurance company will check the record of each driver you want to insure. When you're getting a quote, it helps to know if each driver has had any accidents or moving violations within the past five years or so.
  • Discount verifications: If you're trying to get a discount, you'll need to prove you qualify. For example, if you want to get a discount through AARP, have your membership information ready. If your teenager qualifies for a discount because they have good grades, have their GPA at hand.
  • Current insurance: Unless you're a new driver and it's the first time you're applying for car insurance, insurers will need proof of prior insurance coverage. If you have an existing auto policy, have it handy. You can also refer to your current policy to estimate the amount of coverage and deductible you might want.
  • Credit and bank information: Be prepared with your payment information. Setting up automatic credit card payments or bank withdrawals is a good way to ensure you never miss a car insurance payment.

How to Choose the Right Car Insurance Policy

There's a lot to consider when choosing a car insurance policy. By considering your coverage needs, your budget and the deductible you can handle, you can find the right blend of coverage and savings.

There are four main types of auto insurance coverage:

  1. Liability insurance covers the cost of injury to others and damage to their property if you're at fault in an accident.
  2. Collision insurance pays to repair or replace your car when you're at fault in a collision with another vehicle, animal or object.
  3. Comprehensive insurance pays for damage to your car not caused by collisions. This may include damage from wind, fire, hail, theft, vandalism and more.
  4. Uninsured/underinsured motorist insurance covers damage to your car and injuries to you and your passengers if an uninsured or underinsured driver causes an accident.

Most car insurance companies offer additional coverage for things like medical payments, lost wages, roadside assistance, rental car reimbursement, windshield glass coverage, driving for a ride-hailing service and more.

States typically require drivers to buy a minimum amount of liability coverage. If your car is leased or financed, the lender or lessor will require a certain amount of collision and comprehensive coverage. Aside from these obligations, however, the amount of coverage you buy is really up to you. Beyond the required minimums, deciding how much car insurance you need comes down to your risk tolerance and your financial assets. There are three main factors to consider:

  1. Your assets: If you're found at fault in a lawsuit after a car accident, it could cost hundreds of thousands of dollars, putting your home, investments or other property at risk. Higher liability insurance limits, combined with an umbrella insurance policy, can help protect these assets.
  2. Your financial resources: Your deductible is a big factor in the cost of car insurance; the higher it is, the lower your premiums will generally be. If you could easily pay $1,500 out of pocket to cover repairs, raising your deductible to $1,500 will help reduce your costs. If you'd be hard put to come up with even $500 on short notice, however, a lower deductible can help provide the coverage you need at a price you can afford.
  3. Your vehicle: How much would it cost to replace your car? You'll need more comprehensive and collision coverage for a brand-new Porsche than for a 15-year-old Honda Civic. And if your car is only worth a few thousand dollars, collision or comprehensive coverage might not be worth the cost.

How Much Does Car Insurance Cost?

Several factors determine how much your car insurance premium costs. Some are within your control; others aren't. Here's what will factor into your premium prices:

  • Coverage and deductibles: As you increase your level of coverage, you'll also generally increase what you pay. The deductible amount you choose can also affect your premiums; higher deductibles can mean lower premiums.
  • Location: Both your state and your ZIP code affect your insurance costs. Those who live in some areas (such as crowded urban areas) are more prone to accidents and more likely to be a victim of theft than those who live elsewhere; this higher risk is reflected in your premiums.
  • Demographics: Insurance companies may consider your marital status, age, occupation, and whether you own a home when determining how risky you are to insure.
  • Vehicle and usage: Certain vehicles cost more to repair or are more likely to be stolen; if your car falls into these categories, you'll likely pay higher rates for insurance. Cars with safety features or anti-theft devices, in contrast, can qualify you for lower rates. Your annual mileage also is a factor. If you drive a lot, insurers may see you as more likely to get into an accident, which can mean higher premiums.
  • Driving record: A poor driving record (especially if you have citations for speeding, intoxicated driving or other risky behavior) or accidents (especially if you were at fault) will cause your insurance rates to rise.
  • Insurance and claims history: You might pay more for insurance if you've had a gap in coverage (that is, a period where you didn't have auto insurance) or have filed a lot of insurance claims, even if you weren't at fault.

Does your credit score affect your auto insurance rates? To some degree, yes. In most states, insurance companies issuing auto policies use specialized credit scores that have been shown to predict risk. Insurers also check your credit score to see if you pay your bills on time and have the financial resources to pay the premiums.

How to Save Money on Car Insurance

No one wants to pay more than necessary for car insurance. Fortunately, there are several ways to save on your premiums.

  • Increase your deductible. Your deductible is the amount you have to pay towards a claim before your insurance coverage kicks in. Raising your deductible will lower your premiums; just make sure you can afford to pay the deductible.
  • Avoid unnecessary coverage. Car insurance sometimes comes with "extras," such as roadside assistance services or rental car reimbursement, that you may not need. Dropping this coverage can save you some money. If you have an older car, bear in mind that collision and comprehensive coverage payouts are limited to the value of the vehicle. Consider reducing or dropping this coverage and putting the money you save into a new-car savings fund instead.
  • Maintain a clean driving record. Avoiding accidents and traffic tickets can help you qualify for lower premiums. Some insurers also charge less for teens or seniors who complete defensive driving courses.
  • Consider a usage-based policy. Some insurers sell mileage-based insurance policies that lower your premiums if your annual mileage stays below a certain level. Others use mobile apps to track driving behavior, such as speeding or rapid braking, and offer discounts if you demonstrate consistent safe driving.
  • Ask about affiliation or multi-policy discounts. Having multiple policies (such as home and auto insurance) with the same insurer typically qualifies you for a discount. You may also qualify for discounts based on your employer or memberships in organizations such as AARP. Check with your employer and membership organizations to see if they offer discounts on car insurance.
  • Compare quotes from different insurers. It always pays to shop around. If you already have insurance, start by asking your current insurer what you can do to lower your costs. If you're not satisfied with your options there, go online to compare quotes from other insurance providers for the same level of coverage.

Before making a decision about car insurance, be sure to check customer satisfaction ratings in your region for the auto insurance companies you're considering. Saving money on premiums is just part of the picture—you also want swift, helpful service if you ever have a claim.

Smart Car Insurance Choices

Armed with the information you need to get an accurate quote, you'll be ready to start shopping for auto insurance and make the best choice for your needs. Since a poor credit score could mean you'll pay more for car insurance, it never hurts to check your credit score before you start getting quotes. If it's poor or fair, there are things you can do to improve your score quickly—and possibly lower your auto insurance premiums.