UPDATED: Mar 13, 2020
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Buying car insurance for the first time is easy. In fact, you can buy your first car insurance policy within 5 minutes of reading this article. Today, we’re explaining everything you need to know when buying car insurance for the first time.
How Car Insurance Works
If you drive a vehicle in the United States, then that vehicle needs to have a basic minimum level of insurance. By law, states require you to have liability insurance on your vehicle. This insurance covers damage you inflict to other vehicles and drivers on the road. Liability insurance is one of three main types of car insurance:
Liability Insurance: Liability insurance is legally required in most states. It includes property damage liability coverage (which covers damage to other vehicles and property) and bodily injury liability coverage (which covers damage to other people, including their medical expenses). If you are at-fault in an accident, then your liability coverage will be used to cover the medical expenses, car repair costs, and other expenses incurred by the party who was not at-fault.
Collision Insurance: Collision insurance is optional in all states. Collision insurance will cover the cost of repairing your own vehicle after an accident. If you get into a collision with another vehicle, then the cost of repairing your vehicle to its pre-incident condition will be covered under your collision insurance.
Comprehensive Insurance: Comprehensive coverage covers your vehicle in non-accident situations. You use your comprehensive coverage when making a claim for hail damage, for example, or when a tree falls on your car. If you want your car to be protected against most unexpected situations, then you need comprehensive coverage.
Different states have different insurance requirements. Only one state, New Hampshire, does not technically require drivers to have liability insurance. All other states require property damage liability insurance and bodily injury liability insurance. Some states also require you to have additional coverage – like medical payments coverage, which covers medical expenses regardless of who is at fault.
Which Kind of Car Insurance Do I Need?
Generally, it’s in your best interest to have full coverage auto insurance on your vehicle when buying insurance for the first time. Full coverage car insurance includes all three insurance categories listed above: liability, collision, and comprehensive coverage.
If you have an older vehicle, however, then you may want to save money on insurance premiums by dropping collision or comprehensive coverage. If your car is only worth $3,000 or less, for example, then it may not be worth repairing after an accident.
Ultimately, it’s up to you to decide how much car insurance you want to have on your vehicle. Some drivers are comfortable with just basic liability insurance. Other drivers will always maintain full coverage auto insurance.
Make your own decision on car insurance by asking yourself the following questions:
- If something happens to my vehicle, can I afford to pay for car repairs or vehicle replacement out of pocket?
- How much risk am I willing to take? What are the chances of me getting involved in an accident?
- How much can I afford to spend on car insurance? How high can my premiums be?
Based on your budget and risk aversion, you can decide on the best car insurance policy for your unique needs.
How to Compare Car Insurance Quotes
When comparing car insurance quotes online, you might see the quote expressed as a series of three numbers. They might look like this:
These numbers all mean something:
- The first number is your bodily injury liability coverage per person
- The second number is your bodily injury liability coverage per accident
- The third number is your property damage liability coverage per accident
Bodily injury liability coverage covers medical expenses for other drivers, passengers, and pedestrians injured in an at-fault accident. The insurance policy will cover a certain amount of medical expenses for each person involved in an accident up to a certain limit per accident.
Property damage liability coverage, meanwhile, is the amount of money your insurance company will spend repairing damage to other property in an at-fault collision. If you collided with an SUV and it’s going to cost $20,000 to repair the SUV to pre-loss condition, then your insurance company will cover repairs up to the limits of your policy.
Different states have different laws regarding the minimum level of car insurance. Some drivers choose to buy the minimum required level of car insurance. Other drivers only feel comfortable with $1 million of coverage or more. Again, it’s up to you to decide how much risk you’re willing to absorb and how high you want your premiums to be.
How to Find the Best Car Insurance Online in Minutes
Fortunately, the internet has made it easier than ever to compare car insurance quotes online. Today, you can find car insurance quotes online in minutes from dozens of different providers in your area.
To buy insurance for the first time, all you need to do is follow these steps:
Step 1) Enter your ZIP code into our online car insurance comparison form
Step 2) Enter basic information about yourself and the vehicle you wish to insure
Step 3) View offers from local insurance companies serving your area
Step 4) Click on offers from each insurance company for further information
Step 5) Choose the quote that works best for your budget, lifestyle, and needs
Step 6) Receive your car insurance coverage as soon as today
That’s it! Getting car insurance online is easier today than it has ever been before. Within minutes, you can receive a customized quote from a car insurance company.
The insurance providers featured on our car insurance comparison website include smaller, local providers as well as larger, nationwide providers. Sometimes, the bigger guys beat the smaller guys in terms of pricing and coverage. In other cases, a local provider is able to undercut its larger competition. We strive to provide a full spectrum of quotes from across the car insurance industry, allowing you to easily pick the policy that matches best with your unique needs.
Other Tips When Buying Car Insurance for the First Time
Compare, Compare, Compare: America’s car insurance industry is very competitive. Don’t be afraid to request customized, exact quotes from multiple insurance providers before you finally choose one.
Be Skeptical of Particularly Low Quotes: Some companies are known for providing good, cheap car insurance. Other companies are known for their low-quality cheap car insurance policies. If you see an estimate that is particularly low, then there’s probably a reason. Research the company. Read the policy thoroughly. Make sure you understand any policy restrictions and other potential issues.
Take Advantage of Insurance Discounts: USAA offers discounted auto insurance to military personnel, veterans, and their families. In many states, USAA is the best option for qualifying customers. Other companies provide discounts for government employees. Some auto insurance have discounts for bundling multiple insurance policies together. Research discounts before you buy. A 15% discount on car insurance from one company can make a huge difference.
Understand New Drivers Pay More: If you’re a new driver buying car insurance for the first time, then you may pay higher rates for car insurance – even if you’re not a teenager. Insurance companies use your insured driving history to determine your risk. If you are buying car insurance for the first time, then the insurance industry has no claims history for you. You might be the best driver in the world – or the worst. Until you build some insurance history, however, your car insurance premiums will be higher than normal.
Compare Car Insurance Quotes for New Drivers Today
Ultimately, buying car insurance online today is easier than ever thanks to online car insurance comparison websites. You can compare quotes online today just by entering your ZIP code. Then, request a customized, precise quote from each specific provider to make sure you’re getting the best car insurance based on your budget, lifestyle, and needs – even if you’re buying car insurance for the first time.