Insurance and Buying a New Vehicle: What You Need to Know

If you are in the market for a new car, you have probably spent some time researching your car, comparing the prices at the different car dealerships, and weighing your decision. Sometimes with all the excitement involved in purchasing a car people forget to give any thought to another important decision they will be making soon — choosing a car insurance provider.

Car Keys

Photo by Caitlin Reagan @ Flickr


Shopping for car insurance can be a daunting proposition. Where should you start? How will you know if you’re getting a good deal? It’s natural to feel a bit overwhelmed. There is nothing to worry about. Once you educate yourself, you’ll be more than equipped to negotiate with any insurance company and make sure you and your new car are protected.

Determine How Much Car Insurance You Need To Carry

The first step in shopping for insurance for your new vehicle is to determine exactly how much automobile insurance you require. Your goal is to be sufficiently covered if you are involved in a traffic accident but you do not want to pay any more than you have to. So what kind of insurance coverage do you need? It depends. Typically, automobile insurance requirements vary from state to state. It is very easy to find out your particular state’s requirements by contacting the motor vehicle department or a local insurance company. You can also find this information online. Keep in mind, the bare minimum of car insurance coverage required by law in your state may not fully protect you. The state minimum could put your assets at risk if you file a claim.

Every state in America, excepting New Hampshire and Wisconsin, requires motorists carry liability insurance. The amount of that mandatory coverage varies by state. Some states also compel you to purchase auto insurance that will cover your medical expenses, pain and suffering losses and, in some states, car damage if the other driver is at fault and is either uninsured or underinsured.

In addition to the different types of liability insurance, there is also collision and comprehensive auto insurance coverage to take into account. Collision insurance covers damage to your car resulting from running into anything such as another car, fire hydrant, or sign post. Comprehensive coverage protects your car in the event of theft, fire, falling debris, explosions, or other unforeseen issues.

Review Your Driving Record and Current Insurance Policy

Before you buy insurance for your new car, you should review the following: your driving record, your current coverage and the premiums you’re paying. You can order a driving abstract or driving history from your state’s DMV. If your driving record is spotty but will soon improve, and the points you earned will disappear, you should wait until that time before insurance shopping. A bad driving record will raise the cost of your insurance coverage.

Contact your current car insurance company or review a recent statement. Note the amount of coverage you have and what you pay for it. Also note the yearly and monthly cost of your insurance as many of your quotes will be stated both ways. This will give you a starting point.

Prior to obtaining any sort of car insurance policy, be sure to review your other insurance policies so you don’t end up paying for something you already have or don’t need. If you have a good health insurance plan, you may be able to buy the bare minimum personal injury protection coverage or forego coverage if your state doesn’t demand it.

Uninsured or underinsured motorist coverage might also be a smart choice, even if you have full medical coverage. This insurance can pay for pain and suffering damages that may not be covered by your medical policy. If you are a member of an organization that provides roadside assistance, you won’t need to obtain that from your insurer. The same goes for mechanical breakdown insurance since your new vehicle is still covered under warranty.

Now it’s time to use the telephone and internet to comparison shop!

Get The Best Coverage At The Lowest Price

Locate insurance companies and contact them for their best quote. You will need to provide them some information about yourself and your vehicle. To find potential insurance companies ask friends and coworkers who they use. Write down the names of the companies you see on commercials and in advertisements. Do an internet search for automobile insurance in your zip code. Take all of the names you find and add them to a list. You will narrow the field as you conduct your research and make calls. When you visit the different insurance websites, make note of several things:

  • Annual and monthly rates for the different types of coverage. This enables you to accurately compare the coverage limits.
  • An telephone number to call for questions you don’t get answered online
  • How will it work? When is the payment due? What happens if you make a late payment?
  • Available discounts that pertain to you
  • The insurer’s consumer complaint ratio from your state’s department of insurance website
  • The insurer’s A.M. Best and Standard & Poor’s ratings.

Other suggestions on how to select the best auto insurance for you new car include:

  • Contact local body shops or dealerships you trust and ask which insurance companies they recommend.
  • Get in touch with an insurance agent for more information about a particular company.
  • Refer to J.D. Power and Associates’ consumer satisfaction surveys on auto insurance companies.

Don’t Forget To Look For Discounts

When speaking to the insurance companies’ telephone representatives, ensure you discuss all the options related to discounts. Insurance companies offer discounts for a safe driving record, high credit score, safety equipment (such as, antilock brakes), certain careers and professional affiliations and more. For example, if you belong to a college alumni association or labor union, these groups frequently assist their members with automobile insurance.

Miles Walker is a freelance writer and blogger who usually looks at car insurance quotes over at CarinsuranceComparison.Org. His most recent review looked at the best Maine car insurance.