Buy car insurance

How To Buy Car Insurance
On This Page
What Can Influence Your Rates
What Coverage Do You Need?
Get the Best Rate
Proof of Insurance
Verified As Of: 6/28/2018

Car insurance is one of the necessary evils of modern life. You pay a substantial amount of money each month to the insurance company, and if you are like most people, you have not had an accident or made a claim in years. Yet when you do suddenly find yourself involved in a collision, the insurance premiums you’ve been forking over all these years will finally pay off.

The advent of the Internet has raised the level of competition between insurance companies. Because you can now sit at home in your bathrobe and compare rates and coverage between companies, they are under more pressure to offer competitive deals. So why not leverage the Internet’s potential to help you save time, save money, and find the best auto insurance coverage?

First, let’s be clear about the fact that auto insurance is required by law in most states―it’s not optional. If you drive a car, you must have auto insurance. So you need to find out what the law requires in your jurisdiction when it comes to how much auto insurance coverage you need to maintain. Print out your state’s requirements, and save that information for the next step in the process.

What Can Influence Your Rates
Because insurance prices are all based on statistics, the prices each of us pays varies wildly. Things like the driver’s age, years of driving experience, what neighborhood the car is usually parked in overnight, the make and model of the car, what kind of safety features the car has, and whether or not you have antitheft devices installed―all of these variables will factor into the price you’ll pay for the particular level of coverage you choose.

Before you get too far into shopping for insurance, you might want to order a copy of your driving record. In much the same way that your credit rating determines what kind of interest rate you’ll get when you are applying for financing, your driving record will influence your insurance rate.

When you get your driving record, take a look at it to make sure that it is current and accurate. You would not want an error on your driving record to keep you from getting the best rate possible.

What Coverage Do You Need?
Your state sets forth the minimum liability coverage you must maintain, as mentioned above. But these are just the legal minimums and might not give you the coverage you need. You’ll have to decide what you want to buy beyond these minimums. Keep in mind that you are looking to find the balance between having adequate coverage and overpaying.

According to Consumer Reports, a general guideline for adequate bodily injury liability limits is $100,000 per person and $300,000 per accident, plus $100,000 for property damage. These amounts are what your insurer will pay to someone you are in an accident with. For uninsured motorist coverage, you should get the same amount as for bodily injury liability, as this covers your medical costs when someone who is not insured hits you.

Other Types of Coverage
You can always supplement your policy with specific protections (for a higher premium, of course). For example, many motorists get comprehensive and collision coverage. Comprehensive pays out when your car is damaged or lost due to causes other than an accident, such as vandalism, theft, or weather. Collision coverage will pay to repair your own car if you hit something.

These options typically come with your choice of deductible, usually $250 to $1,000. This is the amount you pay out of pocket before your insurance kicks in; the higher the deductible, the lower the premium you’ll pay for this type of coverage.

Additional options include rental reimbursement coverage, which pays for a rental car while your car is in the shop being repaired. Roadside assistance coverage will pay to have your vehicle towed. Keep in mind that if you already have an auto club membership, you do not need this additional coverage.

Get the Best Rate
The National Association of Insurance Commissioners (NAIC) recommends that you ask your potential insurer about the following discounts:

Good driving record: Many auto insurers offer discounts to drivers who have not made a claim, haven’t been in an accident, or haven’t received a traffic ticket in three years.
Good grades: Young drivers can get discounts for maintaining a B average or better in school.
Driver’s education: Some insurance companies offer a discount for drivers who complete a driver’s education or driver’s safety course.
Multiple policies: Some insurance companies offer discounts if you have two or more policies with them.
Safety equipment: Equipment such as antilock brakes and antitheft devices can get you a discount.
Longtime policy holder: If you have kept your policy with an insurer for several years, ask about a discounted premium.
Higher deductibles: A higher deductible usually means lower premiums.
Gather Quotes
Once you know what kind of coverage your state requires, you will need the following information in front of you in order to get an accuratequote for auto insurance:

The age and gender of the driver(s), the number of drivers in your household, and their driver’s license numbers.
A description of your car: the make, model, year, and vehicle identification number (VIN).
The type of coverage and limits you want.
Where you park your car overnight.
Check References
Now that you have a few comparable quotes and you know which company offers the lowest price for the policy you want, you still need to check out the company itself to find out whether it’s reliable.

You can check with your state’s department of insurance, which should allow you to compare premiums for insurance companies in your state. You can also check on the financial stability of a company and look up the number of consumer complaints it has accumulated. Take a look at Weiss Ratings to get an independent rating of the companies you are considering. J.D. Power and Associates also offers useful consumer reviews of auto insurance companies.

Review Your Policy
Before you sign, be sure to carefully review your new policy to make sure it includes all the coverage you want. Your policy will need to comply with your state’s legal requirements as well as any additional requirements of the company that finances your auto loan.

Proof of Insurance
Most states that require you to have auto insurance also require that you always have proof of your insurance policy in your car or in your wallet at all times. If you are stopped by the police and you are not able to show proof of auto insurance coverage, you could incur serious fines.

Most insurers will issue a handy insurance ID card―one for each vehicle you have insured. Keep this card in your car’s glove box along with the registration, and you’ll never have to worry about forgetting it. You might even need to provide proof of insurance when you register your car; you can use the insurance ID card for this.

For specific insurance coverage requirements in your state, visit our Insurance Center or choose your state below:
What is a no-claims bonus?
A no-claims bonus (NCB), or no-claims discount, is a count of the number of years in which you haven’t made a claim on your car insurance policy.

The amount that its worth varies from insurer to insurer, but a NCB of five years or more, for example, is likely to give you a significant discount on your premium.

How do I build my NCB?
For every year you’re insured without making a claim, you’ll earn another year’s NCB. Some companies offer accelerated policies where you can earn a bonus in 10 months rather than 12.

You can build up an unlimited number of NCB, but most insurers will only use a maximum of five years when working out a discount.

If I make a claim, how is my NCB affected?
If you make a claim on your policy where your insurer pays out, you’ll generally lose some, or all, of your no-claims bonus.

But if you’re hit by another car and it’s agreed that you weren’t at fault, your insurer may be able to reclaim the payout from the other car’s insurer and your NCB may not be affected.

In cases where fault can’t be agreed on, insurers may split the cost of the claims and both drivers’ NCB could be affected. This includes if your car is stolen or damaged by bad weather.

If you pay for a new policy with a reduced NCB and are later found not at fault, you can usually get your NCB reinstated and a refund on the extra premium you paid.

How can I get proof of NCB?
When you decide to change your insurer, you’ll need proof of your NCB in order to transfer it over to the new one.

Your existing insurance provider may include your proof of no claims in the letter they send you before your car insurance is due for renewal – so you may want to hang on to this even if you decide to switch.

When you switch, you may also receive proof of your NCB in the cancelation letter you’ll get from your previous insurer.

However, other insurers may not include it anywhere at all, so in this instance you’ll have to request it by phone, post, or by completing a form on their site.

What is a protected no-claims bonus?
Protecting your NCB allows you to have a certain amount of “at fault” accidents without affecting the bonus. So if you have an accident, the NCB remains intact even if your insurer can’t claim their costs back. Each insurance company has different rules regarding how many claims are allowed.

This won’t necessarily stop your premiums going up after a claim, as insurers use your claims history to calculate premiums, with your NCB discount calculated at the end.

Any remaining NCB you have after the claim may lower your new premium, but there’s no guarantee that it’ll be lower than the previous year.

Protected car

What happens when I change my car or policy? Can I use my bonus on two cars?
No claims bonuses can usually be transferred to another car, but if you switch insurers before the year is up, you won’t get the NCB for that year. You can’t use your no-claims bonus on more than one car.

Insurers should provide proof of your bonus at the end of your policy term. You can pass this on to your next provider when you switch.

Some insurers may provide your proof of no claims in the car insurance renewal letter they send you. If it’s not there, you can call your insurer and ask them to send it.

If you cancel your policy, you have two years to reuse your NCB, otherwise it expires and you start from scratch.

Can named drivers build up NCB?
Named drivers aren’t usually allowed to build up their own NCB, as it’s the main driver’s good driving record that the claim-free history will be supporting.

Letting named drivers earn their own NCB could leave the system open to abuse, as you could build up a no-claims discount without ever getting behind the wheel.

There are some insurers that offer NCB for named drivers, but they can’t guarantee this will be recognised by other insurers. This is, however, becoming more common.

Does NCB apply to work vehicles?
Commercial policies and fleet vehicles don’t typically let you build up NCB, but some insurers will take your experience driving a company car into account when calculating your premium.

If your car is insured for you to use for «social, domestic and pleasure» purposes, as well as with work, then it’s likely you can build NCB. Always check though, as each insurer is different.

How to transfer your company car NCB
If you’ve recently given up your company vehicle, you should be able to use any NCB built up on that car.

But the NCB is only likely to be transferable if you were named on your company’s insurance policy for a particular car and for your use only.

Usually, when changing insurers, you need proof of any NCB you’ve built up from your last provider, but with company policies, many insurers will settle for confirmation from your employer.

Can I transfer NCB from overseas?
It’s worth asking, but most UK insurers don’t allow NCB built overseas to be transferred to a UK car insurance policy due to different driving laws and the administration involved.