Car Insurance – Step by Step Guidelines on how to Apply
How to Apply for Car Insurance – You can get car insurance by shopping online, calling companies directly or working with an agent or broker. Getting car insurance can be as time-consuming as a phone call to an agent, or as quick as tapping a few links on your phone.
Whichever method you choose, you can boil down the process of shopping for car insurance to these five steps:
Below we’ll guide you through each step of the process.
1. Gather information
Before you start shopping for car insurance, collect this essential information:
- Basic details, such as the name, address and birthdate of every driver on the policy.
- Driver’s license information for everyone on the policy.
- Facts about the car, including the make, model, vehicle identification number, safety features, current odometer reading and annual mileage driven.
- Driving history for all drivers, including accidents, tickets or any other violations.
- Your current insurer, if you have one, and your current coverage limits.
2. Determine your coverage needs
When comparing quotes from multiple insurers, make sure you’re getting the same amount of coverage from each company. Not sure how much you need? Each state has its own minimum car insurance requirements, but you may want broader coverage for your vehicle.
The table below includes some of the most common types of coverage:
Bodily injury and property damage liability
Costs for injuries, deaths or property damage from an accident you caused
Uninsured/under insured motorist coverage
Medical and property damage costs after an accident with a driver who has insufficient insurance or none at all
Repair expenses from traffic-related accidents, regardless of who’s at fault
Repair costs from events outside your control — including weather events, hitting an animal while driving, theft and vandalism
Medical payments coverage
Medical expenses for you and your passengers after an accident, regardless of fault
Personal injury protection insurance
Medical expenses, as well as lost wages, child care, funeral costs and other losses due to an accident, regardless of fault
Still not sure how much coverage to select? See the next section for info on finding an agent to talk you through your options.
3. Choose how to shop for car insurance
Here are the main routes you can take when getting car insurance — and what to know about each one.
Auto insurance direct from the insurer
With direct auto insurance, there’s no need to seek out an agent or broker. Online car insurance quotes from insurers’ websites and third-party comparison sites are popular, but you can also get direct insurance quotes over the phone.
When you get a quote online, you can see all of your policy options and complete the quoting process at your leisure. You enter your own information and won’t have to deal with agents or representatives unless you want to.
Good choice for you if:
- You want a pressure-free shopping experience.
- Convenience is a top priority — you want to get from quote to coverage as quickly as possible.
- You have a basic understanding of how auto insurance works and don’t need a personal relationship with an agent.
- The freedom to arrange and manage your policy on your own is appealing.
- While all direct insurers have representatives to field questions, you may not get responses as detailed as you would from an agent.
- Online car insurance quotes aren’t guaranteed; rather, they’re estimates that may differ from your final price.
- You’ll need to share personal information to get an accurate quote and may get follow-up calls and emails. If that sounds like a hassle, consider creating a separate email account or Google Voice phone number to screen contacts.
Car insurance from a captive agent
Getting car insurance quotes through a “captive” agent was once the customary way to buy coverage. Captive agents work exclusively for a single insurance company and act as your main point of contact from the day you buy your policy. Large insurance companies, such as Allstate, Farmers and State Farm, have exclusive agents in just about every state.
Good choice for you if:
- You don’t quite know what you need, and want someone to guide you through your options.
- You want someone to help you manage multiple policies.
- Furthermore, you want familiarity and a long-lasting relationship with your insurer.
- Captive agents are limited in the prices and policy features they can offer, which could be off-putting for shoppers looking for more options.
- Agents are paid a percentage of your premium as commission, which could incentivize some to offer pricier policies.
- They won’t help you compare their policies to those from other companies.
Car insurance from an independent agent or broker
Unlike captive agents, independent agents and brokers don’t represent a single company. Instead, they work with many providers and can offer you a variety of policies and quotes. Dozens of insurers sell through independent agents, including Travellers, American Family and many smaller companies.
Both agents and brokers earn commissions, but agents represent the insurance companies they contract with, while brokers represent the client who’s buying the policy.
Good choice for you if:
- You want someone who can explain the complex parts of your policy. Independent agents and brokers deal with many insurance companies and may have a greater sense of how certain regulations and contract details vary from one company or state to the next.
- You like the idea of dealing with an agent but want more price and coverage flexibility than captive reps can provide.
- You have a decent understanding of how much coverage you need and can resist unnecessary add-ons or upsells.
- They might not be authorized to sell all types of policies from an insurer, nor are they obligated to sign you up for the cheapest. J.D. Power researchers have found that independent agents tend to do more business with the insurance companies they like best.
- They don’t have access to quotes from companies that use captive agents, so if you want to compare quotes from some of the largest insurers, you’d still have to get those separately.
- Because they work on commission, they might try to sell you on policy features you don’t need.
- Brokers often charge a fee to supplement their commission.
Car insurance from speciality agencies
If you’ve had recent accidents, DUIs, tickets or lapses in coverage, get quotes from high-risk car insurance companies. These insurers specialize in non-standard policies and are more likely to offer coverage to people with spotty records (or no driving records at all).
Some agencies specialize in high-risk coverage from non-standard companies and can help you find one that will accept your application. These agencies tend to be local, so search in your area for reputable agencies with websites that indicate agents can get car insurance for drivers who are commonly denied coverage.
4. Compare companies
We recommend getting quotes from at least three different companies before you make your final decision. When evaluating prices, make sure you’re comparing policies with the same coverage limits and deductibles.
While you may be tempted simply to choose the cheapest option, it’s worth reading reviews and ratings for each insurer before you buy. For example, you can check the website of the National Association of Insurance Commissioners to see how many consumer complaints have been filed against a company you’re considering, or read NerdWallet’s auto insurance reviews.
You might decide it’s worth paying slightly more for a policy from a company with better customer service.
5. Buy your new policy (and cancel your old one)
Once you’ve chosen a company and a policy, you can usually pay all at once or on a regular schedule, such as monthly. (You may get a discount on your policy by paying in full upfront.)
If you’re buying a new car, make sure you have insurance coverage in place before you drive the car off the lot.
If you’re simply changing policies on an existing vehicle, reach out to your former company to cancel the old policy once the new one is in place.
Avoid a lapse in coverage by setting the cancellation date for your old policy for after the start date of the new one. You should receive a refund of any unused premium you paid your former insurer, minus any cancellation fee.