How To Get Car Insurance

‍What does car insurance do?

Car insurance has a couple of purposes. Depending on what you get, the biggest intent is to protect you from paying excessive medical coverage or vehicle damage coverage in the event of an accident. Vehicle fixes and medical care after a vehicle collision can be quite expensive. While some people don't like to pay for vehicle insurance, it can help if you get into a collision that requires medical care and seriously damages your car.

Insurance is not limited to just accidents, though. The coverage can include a rental car in the event your vehicle is in the shop and roadside assistance. Part of the purpose of roadside assistance is to potentially move the vehicle out of the way to prevent further problems.

What do I need to get car insurance?

Let's start with a basic list of the items and information you'll need to sign up for car insurance:

Driver's license

This almost goes without saying! Most car insurance companies will require your driver's license number in order to sign up for a policy. It's said that some car insurance companies will allow you to sign up without a license, but we haven't seen that – and it sounds like a bad idea considering the risk involved.

A driver's license provides a significant amount of information about your driving history – more specifically about reported accidents and traffic violation tickets. Insurance companies see data here as a risk – they could also reward you with lower rates if you have nothing on your record.

Your social security

Your social security number gives car insurance providers a glimpse into some other history, including criminal, credit (will you pay on time), and insurance claims history tied to other accounts. Simple put: People who have made claims before or been in insurance involved accidents are at a higher risk of doing it again.

Vehicle information

Another factor that goes into your rates and eligibility for car insurance is the vehicle itself. The car insurance company will want a few pieces of information, including the VIN number, which in itself should provide some info about the existence of safety features within the vehicle, as well as anti-theft devices. You'll also want to estimate how many miles you drive per year.

One thing you'll want to note, especially if you are a young driver: The vehicle you drive does matter to the car insurance company. You'll pay less when driving a basic economy sedan than you will a rear-wheel-drive sports car simply because the chances of getting into an accident in a faster car are much higher – and more expensive to fix. This is why we suggest considering how much a vehicle will cost to insure before giving your full consideration for a vehicle that may be impractical.

Bank info

This is more so for payment. Some auto insurance providers will give you a small discount for scheduling autopay simply because they won't have to pursue you via letters, phone calls, and other communications.

How do I get auto insurance?

Now that we know what you'll need to get started let's talk about the methods for getting auto insurance. We'll discuss advantages and disadvantages of each.

Online

It's quite that you can buy just about anything online. Car insurance is certainly available through online channels, including companies that are online only.

Advantages

Convenient

Convenience is king! With online car insurance buying, you can get quotes and buy insurance online 24/7. No need to make an appointment or use much more than the information needed and your smartphone or a computer. The process is normally just a few steps with the inclusion of your driver's license and VIN number. Most tech savvy people can complete a car insurance setup in just a few minutes.

Comparable

There are websites out there that compare your potential cost of auto insurance across multiple auto insurance companies. This is done in an effort to save you money and the time of filling out multiple forms for the purpose. Most auto insurance companies are likely to give fairly similar offers for a first-time sign-up – but saving a few dollars per month is totally worth it.

No Pressure

Since auto insurance online can be bought at your own pace, you won't experience the pressure of a person pushing you along. On the other hand, some auto insurance companies will probably pursue you via text, phone, and email if you don't complete their sign-up!

Potential discounts

Some insurance companies prefer you sign up online and will give you a small discount for using their website or app to sign up. This is in lieu of contacting a real person.

Disadvantages

No humans

If you want some guidance or just want to get help from something besides a chatbot, this might not be the best route for you. Some people prefer a little help signing up – especially for the first time.

Not for all vehicles

Some vehicles, like RVs, motorcycles, and even higher-risk drivers, can't sign up online. Part of the reason is that they involved higher-risk vehicles or multiple passengers.

Confusion

Insurance involves a fair amount of confusing terminology and numbers. Deductibles, liability, medical costs, etc. You'll also have the option of signing up for roadside assistance or rental coverage. There are so many options with car insurance – and so many numbers you won't end up wanting a person – or even an outside website to explain what you are really getting.

In-person

Insurance companies do indeed have officers, whether they are in your hometown or the agents work remote.

Advantages

More widely available than you might think

While the day of walking into an insurance office are still around – especially in small strip malls, a local insurance agent probably has more methods of contact than you think. Calling an insurance agent is also often welcome – or even setting up a plan via email or text.

Get the right coverage

One of the biggest disadvantages of online shopping is a lack of understanding of what the coverage numbers mean. A agent provides what can be a big advantage in being able to explain what coverage amounts mean – and asking some questions to see what you need.

Local experience

Agents can typically be found near you. They are usually well versed in the surrounding area, and what you'll need to get by in regards to auto insurance based on climate and traffic.

Disadvantages

Time

An agent doing a thorough job of getting you setup can take more time to get the whole plan initiated. Depending on how you contact them, it might also take up to days longer to get a plan complete. They are human and have priorities, including sleep, too.

Potentially limited options

While this varies widely, some insurance agents work for one company. Others work for multiple insurance carriers. Those that work for multiple insurance carriers might be more beneficial because they are offer more options.

Commission

Insurance agents work on commission. While we are not saying they will, there exists potential that an insurance agent might sway you toward a particular company because they earn more money when you sign up there.

At a dealership

Dealerships have a department they often call “F&I” which literally stands for finance and insurance. In most states, you are legally required to have car insurance on a vehicle to drive it off the lot. For first time car buyers or people thinking about switching, it can be done at the dealership.

Advantages

Convenience

If you didn't take the time to research car insurance before buying your car – or are not happy with your existing insurance, it can be a good time to do it while you have someone to help you. The finance manager should be well equipped to do everything for you since they should already have your VIN number, driver's license and other needed info.

Get help

While an auto dealer is probably not the first place you should go for help with auto claims, they should be available to help you in the event of a problem, since they sold the product.

Disadvantages

Price

Auto dealers work on commission, too. The price might be a bit higher at the dealership, though the same is true of buying auto insurance through an agent. Any time a human helps, the cost has the potential to go up.

Limited options

Like an agent, a car dealership tends to have select partners. They won't carry every available car insurance option because there are many, many options. This means that you might not find the best rate available simply because they won't explore all possible companies.

How do I get ID cards?

You can still get paper, physical ID cards. In the last couple of decades, smartphones have found their ways into the pocket of most Americans – and along with that, apps that carry your insurance info without paper.

If you want physical cards mailed to you, most insurance companies will oblige.

Can I be added to someone else's plan?

Most people who are just started driving as teenagers will almost need to be on a parent or guardians plan to keep the price of insurance affordable – and even then it can be high.

Luckily, you can be added to a family members plan easily with the same ways we mentioned above. The difference is that you will be limited only to the company they have for a carrier. We certainly encourage you to research other plans if you think you can find a better deal.

Note that if you are a first time driver, or are under 25, your best bet is to stick with the plan with your parents/guardians. Insurance rates are rather high for young drivers because they are at a higher risk of having a problem on the road, and going onto your own insurance plan can make that monthly payment higher still.

Does where I buy from determine who I call for help?

In the event you get into an accident or otherwise need help with something your plan – including changing vehicles, you want to know who to call.

If you buy online, you can contact the company over the phone or through the app. If you did buy through an insurance agent, you have the option to call the agent – though their own customer service might be faster to respond to you than the individual who sold the insurance.

Do I need insurance to buy a car?

Yes, in most states, a dealership cannot legally sign the paperwork for a vehicle purchase without proof of insurance.

In the case of private transactions outside of a dealership, things might get a little more complicated, and loopholes exist. If you are using a loan to purchase the vehicle, the lending company will likely ask to ensure the vehicle is covered by insurance – because at least for now, they actually own the vehicle – not you.

Is it easy to switch car insurance?

Let's say that after signing up for auto insurance, you are unhappy with the company, the price, or something else that drives you to switch companies. Canceling should be fairly easy and can be done via the company's website or through your agent.

Are there eligibilities for discounts?

Some car insurance companies offer small discounts if they can install some level of vehicle speed and brake traction to your vehicle. This is to examine your driving behaviors and reward you for driving in a less risky manner.

It's also possible to find a discount by getting good grades in high school or college. Insurance companies seem to have drawn a connection between good driving habits and good grades. You might also find a break in your rates by being a veteran, though in many cases, an armed forces veteran can use USAA insurance.