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How to Shop for Insurance: 17 Tips for First-Time Car Owners

Posted November 6, 2019 by EasyFinance.com to Insurance 1 0

It can be tough for first-time car owners to find the best insurance for their circumstances. Learn how to shop for insurance with these 17 tips.


Purchasing a new car is exciting, especially if it's your first one! It's also expensive. Car purchases are one of the most significant purchases Americans make.

When you get a new car, the first vital thing you should do is insure it.

Even though about 13% of drivers are uninsured, if you want to protect your pockets, your life, and your new car, make sure you get insurance.

Not everyone knows how to shop for insurance. There are many details to consider when looking for the best plan.

For example, did you know that you can save up to 30% on monthly premiums if you opt for a higher deductible?

However, you should never go for a higher deductible unless you have that money in the bank at all times.

There are many tips and tricks to learn before settling on an insurance policy. Keep reading to uncover 17 tips for first-time car owners!

1. Get Your Information Ready

When you buy a car, it typically comes with a month of insurance, so you do have some time to get your policy.

However, shopping around takes time, so your best bet is to start getting quotes right away. Just make sure you have all your information ready for quick and easy results.

The documentation and personal information you'll need is:

  • Date of birth

  • Driver's license

  • Address

  • Marital status

  • Occupation

  • Driving history

  • Insurance record

The vehicle information you'll need to get your insurance is:

  • Date of purchase

  • The registered vehicle owner (if it's not you)

  • Vehicle Identification Number (VIN)

The 17-digit VIN tracks the history of every vehicle. If you can't provide a VIN, make sure you can at least give the make, model, and year of your car to get a quote. You'll need the VIN to get the car insurance, but not necessarily to get a quote.

You won't need all of the documentation and information listed to get a quote. However, the more information you can provide, the more accurate a quote you'll get. 

If you present any inaccurate information, it'll come out when the provider approves you for insurance, and your premiums will inevitably change.

2. Become Familiar With Your State's Requirements

Most states require drivers to carry property damage and bodily injury liability insurance at the very minimum. Every state has different required liability limits, so make sure you know what they are for your state.

Keep in mind that the minimum may not be enough, and it's essential to make sure you have adequate financial protection.

If you cause an accident and don't have enough collision insurance to cover those repairs, you could end up being held responsible for large sums of money that aren't covered by your insurance policy.

A policy that only covers the bare bones probably won't be enough coverage to pay for severe injuries suffered by other drivers or replace a new car that's been totaled. 

3. Figure Out How Much Coverage You'll Need

The amount of coverage you'll need varies. It's based on things like where you live, your age, your vehicle type, how many miles you drive per week, and your credit score.

Auto insurance policies provide liability coverage, but they also offer additional coverages you should consider adding on to your plan.

4. Get Uninsured Motorist Coverage

Uninsured motorist coverage covers you for damages that are caused by an uninsured motorist. This add-on will also cover you in the case of a hit-and-run accident.

Some states REQUIRE uninsured motorist coverage, so make sure you check with your local insurance agent to find out what the rules of your state are.

5. Get Collision Insurance

Collision insurance covers you for damages to your vehicle anytime it sustains damages as a result of a collision with another car.

6. Get Personal Injury Protection (PIP)

Personal injury protection covers your passengers and you if any injuries are sustained in an accident. It can potentially cover lost wages, medical costs, and even funeral expenses.

7. Get Comprehensive Insurance

Comprehensive insurance covers your car for any damages not related to a collision with another vehicle. For example, if you hit an animal, if your car endures a fire, or if your vehicle is a victim to falling objects or vandalism, a comprehensive insurance add-on protects you.

8. Shop Around for the Best Policy

All insurers don't offer the same coverage and premiums, which is why, when it comes to auto insurance, it's crucial to shop around.

The goal is to find a policy that is both affordable and caters to your circumstances and environment.

Be wary of significantly low quotes as they may be leaving out important add-ons and coverages.

If you get a quote from a smaller insurance company, make sure they have an up-to-date insurance license for the state you live in before you sign the dotted line. 

When you're shopping around for quotes, take note of customer service quality. In the event of an accident or an issue, you want to make sure you have insurance through a company that prides itself on communication and customer service.

9. Think About Your Deductible

What's more relevant to you - lower monthly payments or a lower deductible?

If you're willing to take on risk and have the funds to do so, raise your deductible and save more on your monthly premiums.

If you don't have the deductible amount in your bank account at all times, however, stick with the lower deductible and higher monthly payments. In the event of an accident, your insurance won't kick in to pay for car maintenance until you pay your deductible.

10. Save Where You Can

If your car gets stolen, no one wins. Sometimes when you opt to install anti-theft devices in your car, your insurance company will offer you a discount. 

While these devices cost money upfront, you'll gain peace of mind and a potentially lower monthly payment.

Be a safe driver. Many auto insurers will lower your premiums when you prove you can drive safely. Some offer discounts if you sign up for a defensive driving class. 

The longer you go without getting into an accident and filing a subsequent claim, the more significant discount you can get for being a safe driver.

A lot of insurance companies, like state farm auto insurance, offer discounts to people who drive less than a specific amount of miles.

If you can stay below 8,000 miles per year, for example, your provider could offer you a hefty discount. Just double-check with your insurance company as every insurer has different offers when it comes to mileage.

11. Improve Your Credit

Even car insurance companies factor in credit scores in determining premiums. The higher your credit score is, the better chance you have at lowering your insurance costs.

You can improve your credit by making payments on time, being smart with credit cards, monitoring your credit report for fraud, and maintaining a low credit utilization rate.

12. Use AutoPay and Paperless Billing

The costs of physical products and postage add up. Plus, we are living in an age where the greener you are, the better. Lower your carbon footprint by signing up for paperless billing.

The chances are high that you'll save in the meantime!

Chasing down payments is another cost that insurance companies would rather avoid. When you opt to have your payments automatically withdrawn, most insurance companies will offer a significant discount to your monthly bill.

13. Get Good Grades

If you're a student and a new driver, you can save a lot by being a good student. There are "good student" discounts, which can lower your rate significantly when you do things like maintain a GPA of 3.0 or higher.

14. Bundle Your Policy

Do you need renter's insurance? Most insurance companies offer a big discount if you have multiple policies bundled under the same plan.

If you already have home insurance or renter's insurance, check quotes to see if switching it over to your car insurance policy might be a better deal.

15. Re-Evaluate Your Insurance Needs at the End of Every Policy

Once you've signed up for a particular policy, don't just forget about it for years to come. 

It's a smart idea to check in periodically to determine if that same policy continues to meet your individual needs.

Here are some examples of life changes that might warrant a chance in your policy:

  • You're starting a family

  • You're going off to college

  • Your child is going off to college

  • You're getting divorced or married

  • You're renting an apartment

  • You're buying or selling a house

  • You're becoming self-employed or starting a new job

  • You're retiring

  • You're taking care of an aging parent

  • Your income decreases or increases substantially

If your income increases substantially, take it as an opportunity to raise your deductible, lower your monthly payments, and put that deductible in a savings account.

If you're renting a new apartment, find out if bundling in renter's insurance will save you money.

If you're becoming self-employed and won't be driving as much, check to see if you can lower your rate for lower yearly mileage.

16. Ask Around Before You Decide

In addition to doing your own research by reading about insurance companies and calling for quotes, don't forget to invest some time in good old worth-of-mouth.

Ask anyone you know who's been in an accident who their provider is and how their experience was dealing with their provider.

Talk to people that have had auto insurance for years and ask them what who they've liked or disliked.

If you think you might bundle in the near future, make sure you check with a provider before to see if they offer additions like homeowner's insurance.

17. Find Your Auto Body Shop Ahead of Time

No matter how safely you drive, the average driver still files a claim as a result of an auto collision every 17.9 years. Even though some drivers never get into a fender-bender, others endure more than their fair share of auto accidents.

Either way, when you get into a car accident, especially if it's your first one, things get confusing. It can be hard to know what to do. Plus, if your car needs towing, you'll be one step ahead, knowing where you want the truck to bring your car.

All insurance companies have auto shops they work with, and most of those places do quality work at reasonable prices. But they still have a relationship with your insurance agency. 

Sometimes you're better off finding your own shop.

But if you'd prefer to work with one that has a business relationship with your insurance provider, take a look through their list of preferred providers, find reviews, and pick one that's well suited to you and your vehicle.

That way, you'll at least have peace of mind knowing you have control over where your car goes.

Knowing How to Shop for Insurance Includes Finding a Great Agent

Knowing how to shop for insurance can be a daunting task for first-time car owners. But it doesn't have to be!

Just remember it's your car, your passengers, yourself, and your pockets you're protecting, so it makes sense to take the time to find the best and most affordable plan for your needs.

Once you've settled on an insurance provider, stay in touch with your agent and know the best way to contact them.

When you work with a professional with a tried and true reputation, you'll be able to check in periodically to look for additional discounts and savings. And you can rest assured knowing that agent will get you the best rate.

Are you ready to boost your credit score to try and get an even better rate? Check out our credit score and credit card articles!

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