How to get car insurance for the first time

Car insurance for first-time buyers

Buying car insurance for the first time can be intimidating, but the more you know about insurance, the better equipped you will be to find a great auto insurance policy at the best price.

You have to choose between getting full coverage – including comprehensive and collision coverageCollision coverage helps pay for repairs or replacement of your car if it's damaged in an accident, regardless of who is at fault and is subject to a deductible. -- or just carrying liability coverage. Comprehensive and collision coverage is a good idea unless you have a vehicle that isn’t worth much.

In almost every state, “everybody has to have liability coverage,” says Robert Passmore, vice president of auto and claims policy with the American Property Casualty Insurance Association. New Hampshire is the only state that doesn't require liability protection.

You also need coverage beyond liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people. if you have a car loan.

“If you've got a loan on your vehicle, your lender is going to require you to have those kinds of coverages,” Passmore says.

As a first-time car insurance buyer, here's what to consider when buying your first insurance policy.

Determine the type of coverage you need

Car insurance is required in almost every state, but the type of coverage you need may vary. 

There are several common types of car insurance:

• Collision coverage. Covers damages to your car that result from a collision with another car or object.
• Comprehensive coverage. Covers damage to your car caused by things other than a collision, such as fire, theft, weather damage or contact with animals.
• Liability coverage. Liability coverage is divided into two parts: bodily injury and property damage. Bodily injury liability covers injuries you cause to others. Property damage liability covers damages you cause to someone else’s property.
• Uninsured and underinsured motorist coverage. Uninsured motorist insurance covers damages when an uninsured driver hits you. Underinsured motorist insurance covers you if someone hits you but does not have sufficient insurance coverage.
• Medical payments coverage and personal injury protection. Covers injuries to you and your passengers regardless of fault.

Minimum car insurance requirements vary by state. Ensure you know what you need to carry before shopping.

The less coverage you purchase, the lower your premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. -- but the less protection.

Collect your personal and vehicle details before contacting the insurance company

The next step in getting car insurance for the first time is to gather your personal and vehicle information.

This information includes your driver's license, proof of address, and a copy of your vehicle registration. Make copies of that information to have everything ready before calling an insurance agent or visiting their office.

Compare car insurance quotes

Get quotes from at least three different insurance companies to ensure that you're getting the best deal. Make sure to request coverage at the same level when you get insurance quotes.

Choose an insurance company

It's important to find an insurance company that offers both quality coverage and a reasonable price. You want to consider their coverage options, discounts available, as well as how reputable they are in the industry before choosing one over another. Our list of the best car insurance companies is a good place to start.

Pay your premium

Once you decide what kind of plan is best for your needs, look over all the fine print to know exactly what's covered by this new agreement ahead of making any payments. When you're ready, you can set up your payment plan and pay your first premium. this can be in full or in installments.

What do you need to get car insurance?

The best way to get a great rate on your car insurance is to shop around and gather quotes. But before doing so, make sure you have your information handy. Insurers generally want to know information about your vehicle, including:

• The year, make and model and body style. Sometimes, your car's vehicle information number (VIN) is all that is needed to provide these details.
• The date you purchased the vehicle
• Miles driven
• Information about who owns the vehicle
• The address where the vehicle is garaged
• The name of your prior insurance carrier and the expiration date of your policy if you’re on another policy, such as a parent’s

The insurer also wants to know information about you, such as your full name, date of birth and driver's license number (with state of issue).

Details of your driving history -- including any history of tickets and accidents, or past periods when your license was suspended -- also are essential in securing accurate quotes.

How much is car insurance for first-time drivers?

Car insurance can be costly for first-time drivers, particularly if you’re young whether it's your first car or you're driving your parent's vehicle.

The average car insurance rate for an 18-year-old buying their first solo car insurance policy is $5,249 a year for full coverage. A liability-only policy costs $1,706 a year.

Rates come down a bit after that but are still expensive for several years. For example, at 19, a driver is still paying almost $3,874 annually, on average, for full coverage on their own policy -- more than $2,000 higher than the national average -- $1,785 -- for drivers age 30, according to our data.

Why is car insurance so expensive for first-time drivers?

First-time drivers pay more for car insurance because they are less experienced and therefore more likely to be in an accident.

Car insurance companies base rates on risk. As a new driver, you are at a much higher risk of an accident, which means the company is more likely to have to pay a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing..

How first-time drivers can save on car insurance

While such costs can seem intimidating to new drivers, there are ways to lower the premium. While they take a little effort, the work you put in can yield big savings.

Shop around for better car insurance rates

Shopping around and gathering multiple quotes is the best way to get the right car insurance policy at the best price. Using a search engine such as the one at this site is a quick, convenient way to find out your options.

Get discounts

Looking for discounts is one of the most important tips for getting car insurance. Most auto insurance companies offer an array of discounts that can offer significant policy savings. Some of the most popular include:

• Bundle policies. When you purchase more than one type of policy with an insurance company – for example, both an auto policy and a renters or homeowners policy – it’s typical for the insurer to reward you with lower premiums for all your policies. Bundling is one of the biggest discounts you can get -- often 15% or more off your policy.
• Good student discount. Young drivers who excel in school often can earn a price break on their policy. For example, those who finish in the top 20% of their class might be eligible for this discount.
• Multi-car discount. If you insure more than one car with a single insurer, you might qualify for a substantial discount – perhaps as much as 25%.
• Safe driver discount. Driving for a long period without an accident can earn you a price break.
• Defensive driving course. Enrolling and completing a defensive driving course can knock 5% or 10% off your costs. Completing this type may also help you remove department of motor vehicle points off your driving record, which can lower your costs even further.
• Increase your deductible. Raising your deductible to $500 or $1,000 can save you money on premiums. Typically, the higher you raise your deductible, the more you save. Just make sure you can afford to pay this deductible should you need to make a claim.
• Improve your credit score. A higher credit score results in lower car insurance premiums in most states. It's important to note that insurers use credit-based insurance scores -- not your typical credit score -- when setting rates. These scores are based on information in your credit profile. Also, a handful of states -- including California, Hawaii, Massachusetts and Michigan – limit or don’t allow this practice.
• Usage-based insurance. Your driving habits determine the cost of pay-as-you-drive insurance. As part of this program, your insurer monitors your driving habits electronically, and you get lower rates for good driving behavior, such as not speeding or braking too hard.

Helpful auto insurance tools and calculators

• Car insurance rates by vehicle
• Compare car insurance companies
• Auto insurance coverage calculator
• Speeding ticket calculator
• Traffic ticket calculator
• Used car insurance calculator
• Rideshare earning calculator