How To Get Insurance On A Car? A detailed explanation of the process

Confused about how to get insurance on a car and get a good deal on it? Follow the steps explained in the article to get your insurance and make use of the tips to reduce the cost of insurance for your car.

Thinking of getting a car, and you’ve got the money ready for it? Well done, but do not feel the accomplishment “butterflies” yet! You need money for car insurance, don’t you? Yes! Car insurance is not a choice in the United States: you must have insurance if you own a car and drive it. The law of the land requires it from you, and states have made it mandatory. Where it is not compulsory, you need to prove that you can pay for an accident when you are at fault.

Car insurance is an excellent way of hedging against a bigger, severe financial difficulty by paying small, negligible amounts to insurance companies. Insurance companies offer different kinds of coverage plans which become operational in various situations. If you do not have insurance on your car and you land in an accident, you will have to pay thousands of dollars from your own pocket, all of a sudden for all the different kinds of losses and liabilities.

Insurance keeps you safe from such an outstanding financial responsibility and covers the costs when needed the most.

Insurance is necessary and helps too, but it requires you to pay money nonetheless. While there is no way of getting it all free, some strategies can certainly help lower the cost. Those strategies will be really helpful when you buy a new car and have to manage your expenses.

Below are the steps to go through one by one to get your auto insurance.

Decide how to create a mix of your auto coverage?

Buying auto or car insurance is an absolute necessity when you own a vehicle. However, it’s not as simple as wanting to have it. You will follow a few steps systematically to get the insurance that serves the purpose. It will take a lot of mental work to figure out what exactly matters for auto insurance and what doesn’t.

There are several different coverage plans, and you will have to determine how much of each type your car needs. Liability coverage is generally the most important coverage you would want for your car.

Liability coverage

Liability coverage covers the costs of damage in accidents where either you caused damage to your car or someone else’s property with your car. The definition of this liability explains why it’s a necessary coverage and legally required in most states.

Liability coverage is further divided into two parts:

1- Bodily injury liability (BIL)

2- Property damage liability (PDL)

Liability coverage consists of property damage and bodily injury coverages.

Property damage cover includes damage to someone’s property. This could include damage to vehicles, yard light poles. House yards or other property damaged as a consequence of the accident.

Other things that may be included in the coverage:

  • A rental car while the other person’s car is away for repair.
  • Diminished value of the car after repairs: payment will be made for the difference between the value of the vehicle with damage and without damage

Bodily injury liability covers injuries received by a person because of the accident. The insurance coverage can include:

  • Medical bills
  • Prescriptions
  • Lost wages
  • Pain and suffering

Different states have different laws and requirements regarding how to file a bodily injury claim against you.

Personal injury protection

Usually, when we speak of auto insurance, our mind just registers coverage for damage done to the vehicle, but there are many other things that different types of auto insurance cover. For example, you can have insurance cover for yourself and other passengers in the car in case of an accident.

These bills will be paid for you from personal injury protection.

Uninsured motorist coverage

In this type of coverage, costs of injuries and damages are covered for you if they are caused by someone uninsured or underinsured, meaning the insurance he or she had wasn’t enough to cover the damages completely.

Collision coverage

Collision coverage cushions your vehicle if it lands in an accident. This part of the insurance coverage protects your vehicle regardless of who caused the accident or whose fault it was.

Comprehensive coverage

It covers any damage to the car when it is not in use or is stationary, like damage from falling objects, weather extremities, floods, storms, theft, vandalism, etc.

Gap insurance

If your car is damaged beyond repair, gap insurance pays for the difference between the car’s actual cash value (ACV), including depreciation, and the amount still owed to the lease company. This way, you don’t have to pay for a car that you no longer use or even have in your possession.

There are some additional coverage options, for example roadside assistance, new car replacement coverage, or still others. These additional services will require additional charges.

Fill out an application

After you have decided what types of insurance or, let’s say, what mix of various coverages you want for your vehicle, the next step is to fill out an application. The best thing to do at this stage is to have all the necessary info ready to speed up the process.

  • Names, dates of birth, and driver’s license numbers for all drivers of the household (family)
  • Social Security numbers for all drivers likely to use the car
  • VINs (Vehicle Information Numbers)
  • An address for the one who is applying for insurance
  • the declarations page from your recent car insurance policy

While filling out the application, be very attentive because some questions on the forms may even help you get discounts and leverages. Typically, you will be asked if you have had any accidents or violations on your record, if you’re a full-time student, and if your car has important features like an anti-theft device.

In the process of filling out the application, you’ll decide the limit of the coverage. This is an important step and will impact all the financial aspects of the coverage. It will be very beneficial to have higher coverage limits if you can afford it. You’ll also choose the deductible amounts for the comprehensive and collision coverage.

The application process is the most important while getting a quote for insurance coverages. It demands full attention from you. Decide what you need and what you would like to pay for. When you get a quote online or use a car insurance calculator, optional coverage may sometimes become part of the plan, and you may not want them.

So look very carefully at whether there are any extras riding the wagon.

For example, if you’re a member of AAA and already have roadside assistance, you don’t need to pay extra to add it to your car insurance policy.

Compare auto insurance quotes

While looking to get insurance for your car, It’s good to get quotes from several different companies before settling for one. First, be clear about exactly how much you can pay for the insurance. Ambiguity is a real killer; you may even find yourself in a difficult situation if you are unsure of your limit.

Once you are sure of your limits, look for the company that offers the best, most convenient, and safest deal for the least amount of money. Since you will have to pay monthly premiums, make sure they are within the comfortable limit for your salary.

Life is not just about your car and insurance; hundreds of things need to be done other than car insurance. Having a high premium means a huge trouble with several other necessities.

Think that’s a lot to do: just run the question on google, and you will see many comparisons making all the details explicit for your ease. Enjoy the freedom and ease of the internet and choose the best insurance coverage for your company.

Choose a policy and get insured

Once you’ve compared your quotes and picked a company you feel good about, it’s time to get insured.

When you buy a car insurance policy, you’ll set a start date for it and pay your first premium.

You’ll typically receive proof of coverage and a welcome package from your insurer, with information about accessing your account and ID cards or declarations page.

This is your formal start. You can have peace of mind now when you are out on the road with your new car.

Cancel your old car insurance policy

If you’ve been shopping for car insurance to replace a current policy, wait until after your new coverage is in place before you cancel your old policy. You want to make sure you don’t leave any gaps in your coverage.

To do this, set the cancellation date of your old policy and the effective date of the new one on the same day. Insurance policies begin and end at 12:01 AM on a given date, so you don’t have to worry about having a full day of overlapping insurance.

How much does car insurance cost?

Car insurance costs are not universal according to plans even. Different states will have different rates, rates are different for every driver, various companies have different rates, and eventually, the rates vary from plan to plan.

On average, a person spends $1,190 on car insurance, according to the data gathered in 2018, based on the latest information available from the National Association of Insurance Commissioners (NAIC).

According to the NAIC data, car insurance premiums rose 30% between 2014 and 2018, whereas the number of insured vehicles only rose by 7%.

Data from AAA put the average cost of car insurance for new vehicles in 2020 slightly higher, at $1,202 annually. The fact that these numbers are fairly close together looks like you will have to include $100 or close per month for auto insurance.

How to save on car insurance costs?

Getting discounts on your car insurance is no rocket science. Just a few simple strategies, and you can save a good amount.

Apply for multi-car discounts

This is a good way to earn discounts on your insurance coverage, and the best part is that you do not have to do anything extraordinary. If you get a quote for a single vehicle, you will have to pay more than if you applied for multiple cars or vehicles. Insurance companies can give you flexible terms and a better deal if you bring in more business.

To apply for multiple drivers or vehicles, there are generally a few rules. You can ask your agent if your situation fits the requirements. Generally speaking, if you are applying for multiple drivers, they all must live in the same house/residence and even be related by blood or matrimony. Unrelated people can also apply for multi-car or driver discounts, but they should have shared ownership of the car.

These conditions help secure the insurance company’s position with a particular person.

Beware of teens as your other drivers. In the case of teens, you may have to pay even more because they are young and deemed a liability because of their lack of experience and maturity. There are not many exceptions to the rule of teens being liable; however, if your kid is an above-average student and is in the top 20s in his or her class, you will get a good student discount which lasts pretty long. It stays intact until your child is 25.

Do not underestimate a good student’s discount; they can go anywhere between 1% to 39%. So take a shot and do it properly. Have all documents ready that show that your kid is indeed a good student.

You can earn handsome discounts at some companies when you hit deals with them. If you buy more than one insurance package, you can get good discounts. So do check bundles.

Be a good driver

Let go of the distractions. Drive safe and be attentive while on the road. Make sure you follow the rules religiously. The more mindful you are, the better discounts on your insurance. With a good record, you are deemed safe by the insurance company; this helps you get discounts because the company can trust your judgment.

Take a defensive driving course

Sometimes insurance companies will give you a good deal if you have done a defensive driving course. A defensive course will also hedge against points on the license, which means it can help you twice luring in some discounts from insurance companies. However, do not just take the defensive course blindly because that means time and money. Rather ask your provider if they offer such a discount before you go for the course.

Shop around for better car insurance rates

When it comes to the insurance policy, no one will give you credit for loyalty. If you see prices going up, it’s better to ask for quotes from various places to check if someone is giving better options for less money.

However, do not fall for cheap rates only. Look at the services you are getting for the money you will be paying in premiums. What good is super cheap insurance when it can’t pay in times of need. You can check if someone is authentic enough by running necessary checks online. There are dating sites where you can see how a company is doing.

Big vehicle, big insurance

It may be so exciting to buy a luxury SUV, but you should be ready to pay a massive amount of insurance. Go for a small car, and your insurance will be automatically reduced. Many insurers offer discounts for hybrid vehicle owners. You can serve the planet and get a valuable discount on your insurance with a hybrid car. The choice is yours!

Higher deductible

If you choose to pay a high deductible, your premiums will be smaller. Smaller claims and higher premiums will be a nuisance for you, so it makes sense that you go for higher deductibles.

Save with anti-theft devices

Though you will have to spend some money on anti-theft devices, you will eventually be saving quite a few percent on your annual premiums with an anti-theft device in your car. With these devices in place, your car is safer than most others. Safety always sits well with insurance companies because the liability is low. This means you are a catch for an insurer, and they value that in the form of good discounts.

Always ask your company which devices get discounts and how much. What if the price of the device nullifies the discount? That would be so useless, so ask beforehand.

Drop the unnecessary coverage

Give your plan a thorough reading and see if you need all parts of it. There are chances you will come up with some parts that are quite useless in reality and seem suitable only on paper. For example, you can drop collision and comprehensive coverage if you are driving an exceptionally old car.

Work on your credit

Your credit score is an important factor in the car insurance quotes you get in most states, but some do not consider this factor. California, Hawaii, Massachusetts, and Michigan have no credit concerns when calculating car insurance rates. Insurance companies think differently, though. They claim customers’ credit correlates with their chances of filing claims.

Improve your credit, and you can get lower insurance rates – it’s that simple.

Try local insurance companies

It is our natural instinct to go to bigger companies for insurance. The reason is simple- they spend a huge sum on advertising and media visibility, which establishes strong passive support for these companies in our minds. Because we are used to seeing their ads everywhere and we keep hearing positive stuff about them, our minds are convinced that they’ve got a good deal for us.

 

They spend a massive amount of money to create a soft corner in our hearts for them, and they win because they are so convincing. BUT, do a bit of deconstruction and fall out of the trap for your benefit. Find local insurance companies and get quotes from them. Local insurance companies usually rank higher than insurance tycoons in customer satisfaction.

Switch to Pay-as-You-Go Insurance

If you’re a safe driver who is careful about traffic rules and meticulously follows them, you can use a usage-based insurance program to keep the insurance costs low. If you sign up for such a program, your car is monitored on the go. The insurance will track your driving quality and mileage. The better your behavior, the bigger your chances to get discounts from the insurers. If you drive fewer than 10,000 miles a year, you will be saving a good amount with this program.

Conclusion

Car insurance is a necessary business. You will need it to cover you when things don’t go as planned. Car insurance seems like a straightforward business, but there are quite a few considerations. There are some simple and standard steps to follow to get your car insurance, but you can make use of some ingenious tips to reduce the annual cost of your car insurance. The article explains the steps to follow to get your insurance and strategies to reduce insurance costs.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.