Two blue cars in a fender bender accident

How to Get the Right Car Insurance

Get the Insurance You Need, and Want

Car insurance – while you might hate paying for something you (hopefully) never need to use, it’s mandatory in most states. The only real choice you have is ensuring that you opt for the right insurance (in terms of company, type, coverage amounts, etc.) so that you’re not being ripped off.

If you think that all auto insurance companies are the same, think again. There are good insurers out there, certainly, but there are also companies that will happily take your money and then leave you in the lurch when you actually need them to uphold their end of the deal.

Not sure how to choose the right insurance? Don’t worry. We’ll cover everything you need to know.

Know the Type of Coverage Required

There are two broad types of auto insurance available – full coverage and liability. While coverage minimums, limits and even coverage areas vary within each type, your first step is to know which one is right for you.

Answering that question is simple. Is your car paid off? If so, then you can get by with liability insurance if you want. If it’s not, then you’re required by your lender to carry full coverage (since you technically don’t own the car, and the lienholder wants their investment protected).

What’s the difference between the two types? Liability policies only pay out if the accident was your fault, and they only cover the other driver. You’re on your own when it comes to repairing your vehicle. Full coverage is the reverse, covering both situations, and also protecting you if the other driver is underinsured or uninsured.

Know what type you need before you start shopping around.

Know Your State Minimum Requirements

Another important step here when learning how to get car insurance is to know the minimum coverage requirements mandated by your state. Each state has specific amounts it requires for things like property damage and bodily injury. These minimums apply to both liability and full coverage policies.

While you’re free to buy more coverage if you like, you MUST have at least this minimum amount. Anything under that is considered “underinsured” and you can find yourself in hot legal water if you’re found at fault in an accident. You can find your state’s minimum coverage amounts through the state-specific DMV website.

Get the Right Car

Sure, you’d love to power down the road in that sports car with the top down and the wind in your hair. Or maybe you crave the rumble of a big V8 and the smell of burning rubber when you take off from a stop. However, that can lead to you paying far more for your auto insurance. Understand that the year, make and model of the car you’re driving will play a very significant role in the amount you have to pay for insurance. In general, newer, more expensive cars will cost more. Sports cars will also cost more. Even “sports car-like” cars may cost more if the insurance company deems them a higher risk.

The best rule here for how to get car insurance is that if you can’t afford to pay a lot for it (or just don’t want the insurance company that deep in your wallet), buy a cheaper, older car and avoid luxury vehicles, sports cars and anything else an insurer might classify as “risky”.

Know Your Credit

“Wait,” you say. “What’s my credit got to do with my driving history?” The answer is simple – nothing. However, that doesn’t stop some auto insurers from basing your rate at least partially on your credit score.

You have two ways around this, since congressional efforts to stamp out the practice have been stymied. You can either choose to improve your credit score, a process that can take months or even years, or you can shop smart and choose an auto insurer that doesn’t use your credit in its evaluation practices. Neither choice is quick, and neither is perfect. You’ll have to put in the legwork either way.

Know How the Insurer Stacks Up

Not all auto insurance companies are created equal, no matter how badly they might want to portray themselves as such. On the road down how to get car insurance, research each auto insurance company you’re considering and choose one with a solid reputation. This can help you avoid a lot of problems down the road, including lowball repair estimates, increased premiums after an accident, and a great deal more.

The Better Business Bureau and Consumer Reports can both be excellent sources of information when vetting insurance companies. The National Association of Insurance Commissioners also maintains a good database of the complaints filed against insurance companies.

Raise Your Deductible

Perhaps the simplest and most widely used tactic to reduce the amount you have to pay for insurance is to choose a higher deductible. The higher the deductible amount, the more you have to shell out of your own pocket before the insurance kicks in. This reduces the risk to the insurer, and they’ll reward you with lower premiums.

Is that the right choice? Maybe, but maybe not. If you’ve gone for years without any accidents, it can make a lot of sense. If you live in a very rural area where traffic is a rarity, or you hardly ever get on the road in the first place, it can also make sense. However, you’ll need to honestly evaluate your driving history before choosing this. If there’s a good chance that you’ll be in an accident, even a minor fender-bender, then choose carefully.

Snag Your Discount

Insurers need to be competitive today, and they do that in many ways, including by offering a range of different discounts. These include everything from electronic monitoring to bundling different policies together. Consider the discounts available to you and choose those that offer the best savings.

In the end, buying car insurance is more complicated than just comparing the bottom line on a couple of policies to determine the lowest cost. You need to do the legwork necessary to make an informed decision, and know the factors that can increase your costs. That's how to get car insurance the right way.