How to Shop for Car Insurance


Some of the links included in this article are from our advertisers. Read our Advertiser Disclosure.

You may not know this, but just as with nearly anything else, car insurance rates can fluctuate vastly from provider to provider. But we’ve got tips that can help you learn how to shop for car insurance the smart way.  

With the correct information and the proper tips, you can work to get the best car insurance rates in your area and for your situation. 

How to Get the Best Rates on Car Insurance

Getting the best deal on car insurance is about more than stopping into your local agent and asking. There are different types of auto insurance agents, and each kind of agent can offer you various things. 

And different car insurance companies have distinct rate structure systems. When I was looking to save more money via a specialized, leaner budget, one of the things I learned about was ways to get a better car insurance rate. 

With just a few phone calls, I was able to save hundreds of dollars each year on my auto insurance policy. But before you choose an auto insurance provider, use these tips to ensure you’re getting the best possible car insurance policy and the best rates as well. 

Know the Difference Between Agents 

It’s important to know the difference between the various types of insurance agents. We’ll give you a summary of each type here. 

Captive Agents

Captive insurance agents work for a specific, single company. You’ll often see advertisements in your area for captive agents like Esurance. They are experts on the company they represent.

And they can tell you all you need to know about the car and other insurance policies that the company offers. 

Captive agents typically work on a salary-plus-commission basis. So they get a small base salary. Then they earn a commission on each client. Captive agents are generally more “hands-on” as far as customer service goes too. 

Independent Agents

Independent insurance agents work for multiple insurance companies. Rather than being experts on one insurance company, they know a bit about several insurance companies. 

One benefit of using an independent insurance agent is that you can get policy quotes from more than one company, all while using a single independent agent.

It’s important to note, however, that independent agents often get different commission percentages from the various companies they represent. 

This variance could tempt an agent to push you toward a company that pays out a higher commission percentage. Of course, not all independent insurance agents would do this, but it’s something you should be aware of as a consumer.

Insurance Brokers

Insurance brokers don’t work for insurance companies. The job of an insurance broker is to work for their clients to get the best insurance rates with the best companies. 

Some insurance brokers charge customers a fee to find them the best insurance policy and rate, but not all brokers charge the customer. 

Using an independent insurance broker like Gabi gives you a free way to compare the rates of several major insurance companies, all at the same time. 

Gabi is a professional insurance broker licensed in all 48 contiguous states. And their services are free for people seeking insurance rate quotes. 

Using independent brokers to get insurance rates can be a great way to get unbiased information on multiple insurance companies.

But before you choose the type of insurance professional you want to get your car insurance quotes, it’s important to know what information you’ll need.  

Before Shopping for Car Insurance

There are several pieces of information you’ll need before you call an insurance broker or agent to get price quotes on policies. 

Vehicle Identification Number (VIN) for the Vehicles You Want to Insure

The insurance companies you check with will need the Vehicle Identification Number for all vehicles you want to insure. You can find the Vehicle Identification Number on the lower front driver’s side of your windshield or your vehicle’s title.

Names of All People Covered Under the Policy 

You’ll also need the names of all people covered under your policy. Who in your family or household needs to be covered? Anyone who drives any of your vehicles regularly. 

Birthdate and Driver’s License Numbers for All Drivers on the Policy

The insurance broker or agent will want to know the birthdate and driver’s license numbers for all drivers as well. Have it ready before you call.

This information is essential because the driving records of the drivers on your policy will have an impact on your insurance rates. 

Location of Primary Storage Area of Vehicles Covered

Insurance carriers also base your rates on where your vehicle is most often stored when not in use. This detail is impactful because some areas are at higher risk of theft, accidents, etc.

Also, they may ask you how many miles per year you drive your cars. Vehicles that aren’t driven very many miles may qualify for lower coverage rates. 

Know Your State’s Minimum Coverage Mandates 

All states have minimum auto insurance coverage mandates in place. In other words, they have a minimum amount of money you need to be insured for before you can drive in that state. 

Knowing your state’s minimum coverage mandates is vital so that you can get high enough insurance coverage amounts. It’s also relevant so that you aren’t unknowingly getting more insurance coverage than you want. 

Types of Insurance Coverage

An insurance broker or agent will offer you several types of car insurance protection. Here is some basic information about each of the most common types of car insurance. 

Collision Coverage

Collision coverage is geared toward helping you repair your car in case of an accident. This means if the accident is your fault, you will likely need to use your collision coverage for repair. However, if the accident is your fault and you don’t have collision coverage, you may need to pay out of pocket. 

Personal Injury Protection (PIP)

Personal Injury Protection coverage is only available in some states. This type of coverage may handle medical expenses if you are injured in an accident. It might also cover other accident-related costs, such as loss of income. 

Uninsured/Underinsured Motorist Coverage

This type of insurance coverage is meant to ensure your accident-related expenses are paid for if you are involved in an accident that was not your fault.

You may want this type of coverage for if an at-fault driver doesn’t have enough insurance coverage to pay all of your expenses. 

The types of expenses Uninsured/Underinsured Motorist Coverage will pay varies. This type of coverage may cover repair expenses for your car, and occasionally medical expenses as well.  

Liability Coverage

Liability coverage helps cover another person’s injuries or property damage if you are at fault in an accident. Auto liability coverage is mandatory in almost all U.S. States.

Gap Coverage

Gap coverage is a type of auto insurance that covers any difference between what you owe on your car and what the value is if the vehicle is totaled in an accident or stolen. This type of insurance coverage may be warranted if you owe more on your car than what it’s worth. 

Medical Coverage

Medical coverage is meant to help cover medical bills when you or family members are involved in an accident. Medical coverage is a requirement in some states, but optional in others. 

Roadside Assistance

Roadside assistance coverage is meant to help you if your vehicle breaks down. This type of coverage can provide several benefits, such as: 

  • Free towing to an auto shop
  • Battery jumping
  • Gas delivery if you run out of gas

And so on. Get the details of the roadside assistance coverage a company offers before buying. 

Comprehensive Coverage

Comprehensive auto insurance coverage helps protect your car from expenses due to other types of damage. For instance, it can protect from hail, fire, theft, flood or storm damage that might affect your car. 

Most comprehensive coverage policies include what’s called a “deductible.” A deductible is money you have to pay out of your pocket before you are issued reimbursement for vehicle damage.

For example, let’s say you have damage totaling $4,000 to your car and a $1,000 insurance deductible. In that case, your insurance company would potentially issue you a check for $3,000. 

Most of the time, comprehensive coverage is optional. However, if you lease your car or have an auto loan on it, your loan provider or dealership may require you to carry a comprehensive coverage policy. 

You Decide the Level of Coverage

Another way to save money on insurance is to change your level of coverage. Of course, you need to comply with your state’s mandated insurance coverage limits.

Plus, abide by any insurance coverage requirements a bank has on your auto loan or lease contract. Taking into account those factors, you ultimately decide what types of insurance coverage are best for you.

Here are some things you can consider as you work to decide what levels and types of car insurance coverage you should get. 

You Need to be Comfortable With the Level of Risk You are Taking

Driving always involves risk. And the levels and types of insurance coverage you choose should be based in part on your comfort or risk level. 

Many accidents can be avoided via attentive (offensive and defensive) driving and by obeying the laws and rules of the road. However, some accidents are unavoidable. 

Try to think of the big picture when deciding on the level of insurance coverage you choose. If you’re involved in an accident, you certainly don’t want to have to deal with additional financial issues because you opted not to get enough insurance coverage. 

Keep that in mind as you talk with an insurance agent or broker and decide on the level of auto insurance coverage you want.

Choose Your Deductible Amount Wisely

Another risk factor to take into consideration is your deductible amount. The deductible amount is the amount you’ll pay out of your pocket before insurance coverage kicks in. 

Most insurance companies allow you to choose a deductible amount somewhere between $500 and $2,500. Typically, your auto insurance rates will be higher when you select a lower deductible amount. 

Try to find a balance between saving money by getting lower rates and picking a deductible amount you’re comfortable with. For example, don’t choose the $2,500 deductible option if you’re living paycheck-to-paycheck and have no emergency savings. 

Similarly, you probably don’t need to pay the higher insurance rates that come with a $500 deductible if you have no debt and a large savings balance. 

Take Your Financial Situation Into Account

It’s important to take your financial situation into account before you shop for auto insurance. For example, are you self-insured? 

In other words, do you have enough money in savings and investments that any type of accident or another event would leave you or your family with plenty of money to live on and cover potential extra expenses? 

If you’re self-insured, you could consider only carrying the minimum amount of auto insurance required by your state. 

However, if you have not reached a level of wealth where you consider yourself “self-insured,” you may want to consider additional insurance coverage options. That way, you’re not risking the possibility of putting a painful dent in your finances due to being underinsured. 

Or worse, putting yourself in a situation where you’ve got to borrow money to cover costs due to underinsurance in the event of an accident.  

Balance is key when deciding just how much insurance coverage you need over and above your state mandates. Take all factors into consideration as you choose. 

Summary

Having the correct types and right amounts of car insurance coverage for yourself and your family is important. Plus, you’ll save money by getting the best rates on your car insurance policy.

Making the right choices will help ensure you’re doing everything you can to reach your savings goals.