How Do You Buy Car Insurance in the U.S.?

Lucy Lazarony
December 28, 2020

Are you on the hunt for new and better car insurance? There is plenty to do. Before you start shopping for car insurance, you’ll want to gather together the information you need to answer the application questions. You’ll be asked your age, and address and your driver’s license number. As far as your car information goes, you’ll be asked the year, make, model and the car’s vehicle identification number (VIN). You’ll also be asked your current or previous auto insurance information. So pull out those old insurance cards, you’ll need the information on them. And finally, you’ll be asked about your driving history. Do you have any tickets or accidents on your record? Be honest now! Have you taken any driving courses? Let the insurance company know. A driving course completion is a plus on your record. Being a good driver with a clean driving record is even better. Good drivers qualify for good driving discounts on their auto insurance. Veterans and students qualify for discounts on car insurance as well. So if you are a member of either of these groups be sure to mention it when you apply for insurance. You deserve that discount.

Check State Requirements

Auto insurance is regulated at the state level and it is a good idea to check out the specific insurance requirements in your state. That way there will be no surprises when you look at your car insurance premium.

State Minimum Liability Limits. For example, what are the state minimum liability limits in your state? If you ever cause a car crash, liability insurance pays for other people’s injuries and property damage up to your liability limit. Most states have minimum liability limits for their drivers in their state. Be sure to check yours.

And you’ll want to add additional liability coverage beyond the state minimum requirements. These state minimum requirements are low and may not protect you fully if you are in a serious accident.

Most experts recommend at least $100,000 bodily injury liability coverage per person and $300,000 bodily injury liability coverage per accident.

The Insurance Information Institute recommends both these amounts as well as $100,000 property damage liability coverage.

Uninsured and Underinsured Motorist Coverage. Uninsured motorist coverage helps you pay for damages caused by a driver who doesn’t have insurance. Underinsured motorist coverage protects you in the event of an accident where the other party is at fault and doesn’t carry enough insurance. Some states require these coverages and for other states these coverages are optional. Check with the insurance department of your state.

Medical Payments or Personal Injury Protection (PIP) Medical payments coverage pays the treatment of injuries to the driver and passenger in the policyholder’s car. PIP is also known as no-fault insurance and this coverage will reimburse you for any hospital or medical expenses and lost wages from an inability to work. PIP will cover these expenses regardless of who is responsible for the accident. Medical payments or PIP is required in some states and optional in others. Check with your state insurance department for details.

Look for Affordable Car Insurance

Lender-Required Insurance Coverage

Are you financing the car you are looking to insure? You’ll need to carry collision insurance and comprehensive insurance for as long as you carry the loan. Your lender requires it. Once the loan is complete, the collision and comprehensive coverage becomes optional and you can choose to carry on with the coverage if you wish.

Just what is collision coverage and comprehensive coverage? Let’s take a look.

Collision insurance is coverage that helps to repair or replace your car if it is damaged in an accident with another vehicle or object such as a fence or a tree.

Comprehensive insurance covers events that aren’t covered by collision insurance. These events include fire, theft and vandalism and damages from weather such as a hailstorm, a windstorm, a hurricane and a tornado.

You don’t get to decide how much collision and comprehensive coverages that you would like to buy, that is determined by the market value of your car and the costs of repairing it. But you do get to choose a deductible. A deductible is the amount you need to pay before your auto insurance company begins to pay for damages to your car or losses.

The higher the deductible amount that you choose the lower your auto insurance premium. So if you can manage $1,000 deductible or higher you will save money on your car insurance premium.

Shopping for the Best Deal

Now that you’ve gathered your important information, learned about the auto insurance requirements in your state and learned about lender-required collision and comprehensive insurance coverages, you’re ready to get out there and shop for car insurance with SmartFinancial. The best way to save money on car insurance is to get quotes from several different insurance companies. And SmartFinancial makes this easy to do. With SmartFinancial’s help you’ll be comparing insurance quotes from insurance companies near you in no time. And because SmartFinancial has access to more than 200 insurance companies you’re bound to find the price and coverage that you want in your car insurance.

Here’s one last, money-saving tip. Rather than sign up for monthly car insurance payments, pay the annual amount or the six-months amount. Auto insurance premiums are lower when you pay once or twice a year. And choosing monthly payments is the most expensive way to pay.

Get a Free Auto Insurance Quote Online Now.

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