Cash News
In the past, your options for buying car insurance were fairly limited. You could schedule an in-person appointment at a local insurance company or contact an independent insurance agent to help you find the best policy. But the car insurance landscape has changed significantly as more insurers have made it easy and quick to buy car insurance online.
Getting car insurance quotes and obtaining an auto insurance policy online is convenient — and it might also save you money. Read on to learn more about how buying a policy online impacts pricing, where to buy insurance online, and how to get the best car insurance.
Does buying car insurance online really save money?
Answer: maybe. You can comparison shop when you look for car insurance coverage online, getting quotes from several providers to find the best car insurance rates for your profile. Buying online could also be cheaper because you won’t pay agent commissions or other fees as you might when obtaining an auto policy in person.
However, you could also miss out on potential savings by not working with a knowledgeable insurance agent in person.
Where to buy insurance online
You generally have two options to buy car insurance online: getting a policy through an individual insurer’s website or shopping on an insurance comparison site. Each option has its pros and cons. For instance, getting quotes from individual insurers is generally more time-consuming — and potentially frustrating — than using an insurance comparison site.
While a comparison site may save you time, you may only be able to get a quote from a small selection of insurance companies instead of an exhaustive list. That’s because many comparison sites have business relationships in place with select insurers. When you buy a policy from one of their partners, the comparison site gets paid.
How to buy car insurance online, step by step
1. Assess your insurance needs
Before you buy a new policy, first think about what type of auto insurance coverage you need. Start by learning about your state’s minimum requirements for car insurance. Liability insurance is mandatory in nearly every U.S. state, though requirements vary. For instance, drivers in Texas are required to get bodily injury liability and property damage liability coverage. But those in North Dakota must also carry uninsured/underinsured motorist coverage and personal injury protection.
Beyond your state’s minimum insurance requirements, you’ll also want to consider your own needs and risk preferences. If you drive a new car or if you’re particularly risk-averse, you may want full coverage that includes liability, collision and comprehensive coverage. A full coverage policy offers greater protection than minimum coverage, but your car insurance costs will be higher with full coverage. Some lenders may require full coverage if you’ve financed your car, or gap coverage to cover the difference between what you owe on the car and what it’s worth. If you’ve leased your car, that may trigger other coverage requirements.
If you’re a delivery driver for food delivery or car-sharing apps, you need extra insurance.
Read more: How much car insurance do you need?
2. Gather necessary information
Once you understand your state’s requirements and your insurance needs, it’s time to gather the necessary information to get an auto insurance quote. Car insurance companies typically request personal information, such as your name, address and driver’s license number. You’ll also need to provide information about your car, including its year, make, model, vehicle identification number, and your driving history, like recent at-fault accidents, DUIs, or speeding tickets.
Several personal factors can affect what you pay for insurance, including your age, gender, marital status, credit history, and zip code.
3. Research and compare
The next step is obtaining and comparing online car insurance quotes, either with an online comparison tool or through individual insurer sites. Many popular insurers offer an online quote option, including GEICO, Nationwide, Progressive, USAA, and others. Getting quotes from multiple insurers for the same coverage levels can offer valuable insight into the premiums you might pay, as costs vary by company.
If you use a comparison site (most of them also have a mobile app), they’ll do the comparing for you and show you apples-to-apples policy options.
4. Customize your policy
From here, you can select coverage options and customize your policy online. For instance, you could choose a larger deductible to lower your monthly premiums or set your coverage limits higher if doing so will provide you peace of mind.
You can consider optional add-ons to increase your coverage, such as medical payments, accident forgiveness, auto glass coverage, or roadside assistance.
Be sure to research car insurance discounts that can help reduce your insurance rates. Common discounts include:
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Bundling discount, for obtaining renters or home insurance from the same company
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Safe driving discount
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Multi-vehicle discount
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Good grades discount, usually a B average
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Low mileage discount, often for driving a maximum of 7,500 miles per year
5. Read the fine print
After customizing your policy to meet your needs, be sure to read the fine print before moving forward. Review terms and conditions and understand what’s covered versus any potential exclusions. Doing so will help you avoid any unexpected surprises if an incident occurs and your car is damaged or stolen. If anything in the fine print is surprising or concerning, speak with an insurance agent to discuss it before finalizing your policy. Once you’re comfortable moving forward, you’ll need proof of insurance and ID cards — which you can either print out or save to your phone.
When and why you might prefer to buy from an agent
If buying insurance online doesn’t seem like the best option for you, you can work with an independent broker or captive agent to get a policy. Independent brokers can offer quotes from many insurance companies, while captive agents work for one insurance company. A captive agent may be the right choice if you know exactly which insurer you want to work with.
As mentioned, you may need to pay sales commissions or other fees when you work with an insurance broker or agent. But you’ll also benefit from personalized service if you have questions about your auto policy or are seeking specific add-ons. Additionally, you may get access to little-known car insurance discounts when you work with a knowledgeable broker or agent.
Additional considerations for finding the best cheap car insurance
Obtaining car insurance isn’t a one-and-done task. Your car insurance needs may change over time, so it’s important to understand how to update your policy if needed. If your driving record has improved after taking a safe driving course, for example, you could qualify for a better auto insurance rate. Most insurers let you update your policy whenever you want rather than wait until your next renewal. You’ll generally need to speak with an insurance agent if you need to increase your level of coverage, add a driver to your policy or make other changes.
Because your car insurance needs can change, reviewing your policy periodically makes sense. Car insurance policies are generally in effect for six or 12 months, renewing automatically at the end of that period. Your insurer should contact you before your policy’s renewal date, providing an ideal opportunity to review your coverage details – or obtain free quotes and switch to a new policy.