HomeRenters InsuranceHow To Shop for Car Insurance in 5 Steps (2023)

How To Shop for Car Insurance in 5 Steps (2023)

Step 1: Gather Your Information

The first step is to gather the information you’ll need to get a quote. Most insurance companies ask for the same things, which include your:

  • Personal information: Your name, birth date, address and years at that address
  • Vehicle details: Your car’s vehicle identification number (VIN), make, model, year, mileage and safety features
  • Driving history: Your driving record from the past three to five years, including any tickets and at-fault accidents
  • Current insurance information: The company you’re insured with at the moment and any coverage levels and birth dates of people listed on the policy
  • Additional information: Your driver’s license numbers and the names of any other household members excluded from your policy

You may need to gather some of this information from other people or physically locate your car’s VIN. Doing this ahead of time can make it much easier to shop for car insurance.

Step 2: Decide What Coverage You Need

Figure out what type and amount of coverage you need. Each state requires a basic level of bodily injury and property damage liability coverage that compensates other drivers when you cause an accident.

In most states, you won’t be able to get less coverage than that, but you could increase your liability coverage amounts (which we recommend). Here’s a basic list of different coverage types that may be available to you:

  • Liability insurance: Covers medical bills and repair costs for other drivers when you cause an accident.
  • Collision insurance: Covers damage to your car in an accident, no matter who was at fault.
  • Comprehensive insurance: Covers environmental damage, vandalism and theft.
  • Underinsured/uninsured motorist coverage: Covers your injuries and property damages when another driver without enough insurance causes an accident.
  • Medical payments coverage (MedPay): Covers your medical bills after an accident.
  • Personal injury protection (PIP insurance): Covers your medical bills, lost wages and death benefits. This coverage is often required in no-fault states.

Consider Lender Requirements

If you have an auto loan, your lender will require you to carry full-coverage insurance on the vehicle. In fact, your car insurance policy will list the lender as a lienholder so the lender is compensated in the case of a total loss.

Full-coverage insurance includes liability coverage plus comprehensive and collision coverage. Consult your loan documentation or reach out to your lender to see what insurance is required if you want to make a change in coverage. Otherwise, keep everything the same as your current policy and give the lender’s name and address to your new insurer.

Gap Insurance

You may also want to have gap insurance if you owe more than your car is worth. Gap insurance pays the difference between the value of your car and what you owe on the loan in the event of a total loss.

Roadside Assistance

Most car insurance companies also offer roadside assistance as an add-on. Depending on the company, this can cover:

  • Towing services
  • Winchings
  • Fuel deliveries
  • Spare tire changes
  • Battery jump-starts
  • Lockout services

If your car is under factory warranty, you may have roadside assistance from the manufacturer. Extended warranty plans often come with roadside assistance as well.

Step 3: Choose How To Get a Quote

There are multiple ways to get car insurance quotes, each with its own pros and cons.

Contact an Insurance Company’s Agent

One of the simplest ways of shopping for car insurance is to get a quote from an agent at an insurance company. Also called captive agents, these representatives only work for a single company like Geico or Allstate. They won’t compare other options for you, but they’ll know the ins and outs of their company’s coverage options.

Use an Insurance Broker or Independent Insurance Agent

Independent agents and brokers both work with multiple insurance companies, which means they can help you comparison shop. An insurance agency in your town might offer coverage from Geico, Progressive and State Farm along with a few local options. However, brokers and independent agents make more money if you buy more coverage, so they have the incentive to sell you more.

Get a Quote From a Company’s Website

You can also go to company websites and get auto insurance quotes online (unless a company only operates through agents).

Use an Online Comparison Tool

Using an online quote comparison tool is an easy and fast way to get prices from many companies at once. Similar to using a company’s website, special situations like rideshare insurance or classic car insurance may require an agent’s help.

Quote Tip: Be Truthful

Always give correct information when filling out a car insurance quote. Car insurance companies can change your rate or even cancel your coverage if they discover something important was missing from the quote, like specific details of your driving history.

Step 4: Compare Car Insurance Quotes

Once you’ve decided how you want to get a quote, the next step is to compare your car insurance quotes. Whether you use a broker, a comparison tool or a handful of individual company websites, you’ll find the best rates this way. You can also see which companies offer the best discounts for your situation.

Find the Right Car Insurance Discounts

Most car insurance companies offer a variety of discounts that can help you save money. Comparison shopping is important because different companies offer different discounts. For example, State Farm offers a discount of up to 25% for good students, while Geico’s good student discount is up to 15%. Some companies don’t offer good student discounts at all.

Below are some common car insurance discounts you’ll find when shopping around.

  • Multi-car
  • Multi-policy or bundling
  • Teen driver
  • Driver education
  • Defensive driving course
  • Good student
  • Student-away-at-school
  • Military
  • Safety features

Consider Which Companies Offer Usage-Based Insurance

Some companies also offer telematics insurance programs that reward good drivers with discounts. These programs use an app, plug-in device or both to track things like your average speed, mileage, acceleration, cornering, braking and late-night driving.

Examples include:

If you don’t drive much, you can also find pay-per-mile insurance from a few companies. With a pay-per-mile program, your bill will usually have a base monthly or daily rate plus a rate for every mile you drive. You could save a significant amount if you work from home or only drive occasionally. Examples of pay-per-mile programs include:

  • Allstate Milewise®
  • Nationwide SmartMiles®
  • Metromile

Step 5: Purchase a Policy

The last step in shopping for car insurance is to purchase your policy. Many car insurance companies offer same-day coverage as long as you sign up and make the first payment. You can also choose to pay for the policy in full up front.

Avoid a Lapse in Coverage

When switching car insurance companies, overlap your old and new policies by at least a full day. In other words, don’t cancel your current coverage until the new coverage kicks in. You can do this by scheduling the cancellation in advance. A lapse in coverage of even a single day can make you riskier to car insurance companies and increase your insurance premiums.

How Much Does Car Insurance Cost?

Auto insurance policy costs vary widely depending on the driver and company. In this section, we’ll look at full coverage and state minimum average costs.

Average Full-Coverage Car Insurance Cost

According to our rate averages, 35-year-old drivers with good driving histories pay $1,730 per year or $144 per month on average for full-coverage car insurance. Below, you can see 10 popular car insurance companies ranked according to annual cost averages.

Average Minimum-Coverage Car Insurance Cost

Minimum coverage is the cheapest option for car insurance. According to our averages, good drivers pay about $635 per year or $53 per month on average for minimum-liability coverage.

How To Save on Car Insurance

Car insurance rates are based on a variety of factors, but there are a few things you can do to find cheaper quotes. As you shop for car insurance, consider the following:

  • Avoid hard credit checks: Most states allow car insurers to use credit scores in determining rates. If possible, try to avoid anything that would bring your score down.
  • Set a higher deductible: You can lower car insurance costs by raising your deductible. Be sure you can afford to pay if you were to get into an accident, though.
  • Lower your coverage limits: If you can get by with less coverage, you can save some money on car insurance. You could also get minimum coverage if you own your car outright.
  • Bundle policies: Most companies offer discounts for bundling more than one vehicle or type of policy together, such as auto with homeowners or renters insurance.
  • Compare multiple providers: You may find one company charges hundreds less than another. You won’t know you have the cheapest car insurance until you compare more than one provider.
  • Shop often: To be sure you have the best option, shop for car insurance each time your policy is up for renewal.

How To Shop for Car Insurance: Conclusion

There are multiple ways to shop for car insurance, but the best thing to do is to compare multiple companies at once. Gather your information, choose what types of coverage you need, decide how you want to get a quote and then compare car insurance quotes to find the best option for you.

Top Auto Insurance Recommendations

You may have dozens of car insurance companies available to you, but not all offer the best coverage, service or rates. State Farm and Geico are among our top picks for excellent cheap car insurance.

State Farm: Editor’s Choice

State Farm is our top recommendation for its affordable average rates, good selection of discounts and many coverage options. The company’s average rates are about 15% cheaper than the national average and it offers numerous ways for students and good drivers to get lower rates. State Farm also has an A++ financial strength rating from AM Best.

Read more: State Farm insurance review

Geico: Affordable for Most Drivers

Geico’s average rates are about 24% cheaper than the national average, which earns it a spot among our top picks. Notable discounts include a 22% good driver discount, a 15% military discount and a 25% multi-vehicle discount.

Read more: Geico insurance review

How To Shop for Car Insurance: FAQ

Below are frequently asked questions about how to shop for car insurance.

Our Methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

In this article, we selected companies with high overall ratings and cost ratings. The cost ratings were informed by auto insurance rate estimates generated by Quadrant Information Services and discount opportunities.

*Data accurate at time of publication.

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