AutoInsurance.com
January 17, 2023

Shopping for Car Insurance Dos and Don’ts

What to do and not do when renewing your plan or shopping for a new policy.

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Car insurance is a necessary part of everyday life for millions of Americans. Not only is car insurance required in almost every state, but it also helps keep you, your vehicles, and your family safe.

Drivers don’t need to become experts on auto insurance. Still, you should know some auto insurance basics when looking for a new policy or renewing your existing plan. Below are some essential dos and don’ts when shopping for car insurance to help you save money, drive safer, and find the right coverage for your specific needs.

What to Do When Shopping for Car Insurance

Get as Much Coverage as You Need

You’ll need to meet your state’s minimum car insurance requirements to drive legally, but state minimums rarely provide enough coverage to keep you and your vehicles fully protected.

We recommend getting full coverage with the highest liability insurance, comprehensive insurance, and collision insurance limits that you can afford. Beyond that, how much insurance you need depends on several personal factors:

  • How many people drive your car
  • How much your vehicle is currently worth (otherwise known as its actual cash value)
  • Whether you’re using your car for personal or commercial use
  • How often you drive
  • How much you can afford
  • Your local crime rates, weather patterns, accident rates, and other regional factors
  • The percentage of uninsured/underinsured motorists in your area

Talk to your agent, assess your personal needs, and determine the coverage options that meet those needs. Want to learn more? Check out this guide on car insurance coverage.

Ask Your Agent for Discounts

If you don’t ask your agent what car insurance discounts you’re eligible for, you may pay a lot more for your policy than you need to. Because discount types, percentages, and eligibility vary from state to state (even with the same provider), it’s important to ask your local agent to learn about your unique saving opportunities.

Here are some of the most common auto insurance discounts:

  • Bundling or multicar discount
  • Safe driver
  • Homeowners’ or renters’ insurance when you bundle home and auto
  • Safety driver course
  • Student with good grades
  • Taking a defensive driving course
  • Vehicle equipment (seat belt, anti-theft devices, etc.)
  • Military
  • Senior

Make Sure You Can Afford Your Deductibles

Deductibles are a central part of your policy pricing because the higher your deductible is, the lower your monthly premiums will be.

The risk with a high deductible is that if you are in an at-fault accident, you’ll need enough cash or credit to pay the deductible in full before your provider starts contributing to repairs. Deductibles are a balancing act. Keep the following points in mind when finding the sweet spot of affordability:

  • Be realistic. Regardless of how cheap your premiums could be, choose a deductible amount you know you can afford, so long as you can also pay the higher insurance cost.
  • Avoid diminishing returns. Deductible amounts do reach diminishing returns. After a certain dollar amount, increasing your deductible may save you only a few dollars. Continuing to increase your deductible after this point would not be worthwhile.
  • Get low deductibles for low-cost vehicles. The cheaper your vehicle is, the lower your deductible should be. A $1,000 deductible for a vehicle worth $2,000 means you’re splitting the costs with your provider if your vehicle gets totaled. A $1,000 deductible on a $30,000 vehicle, on the other hand, means your provider pays $29,000 if your car gets totaled.
  • Increase your deductible to save. You never know when you might find yourself in an accident, but if you hardly drive your car or don’t think you’re likely to file an insurance claim, increasing your deductible may not be a bad idea.

CheckQUICK TIP:

Not sure what your deductible should be? Most drivers set their policies at $500 or $1,000 ($500 is the average in the U.S.). Talk to your agent about what you can afford and what makes the most sense with your vehicle and plan.1

What Not to Do When Shopping for Car Insurance

Don’t Overpay for Car Insurance

While we recommend getting full coverage with the highest limits you can afford, that doesn’t mean you need every add-on or coverage option. Some forms of optional protection may not make sense for you, such as the following.

  • Gap insurance: If you’re leasing a vehicle and what you owe on the vehicle is less than what the vehicle is worth, you can skip gap insurance (unless your lease requires gap insurance).
  • Roadside assistance: If you already have a AAA membership or similar roadside service, you probably don’t need additional emergency roadside assistance.
  • Uninsured/underinsured motorist coverage: In states like New Jersey or Massachusetts, where the uninsured motorist rate is lower than 5 percent, it may not make sense to prioritize uninsured/underinsured motorist insurance (especially if you’re on a budget).2

CheckFYI:

The average cost of car insurance was $1,070 in 2019. Check out our guide on car insurance costs by state to compare your costs with the average state car insurance rates.3

Don’t Accept Your First Quote

Even with several discounts, solid coverage, and an affordable rate, you don’t want to accept your first quote right away. Typically, auto insurance providers will save your quote for at least 30 days, so you have some time to shop around and make comparisons.

The only way to know whether you’re getting the best coverage at the lowest price is to compare quotes from several providers. Car insurance agents know that savvy customers want to compare quotes, so don’t be afraid to break down your other offers with an agent to see if they can sweeten your policy.

Don’t Lie About Your Driving History to Get a Better Deal

If you’re looking for a new plan or renewing plan, one of the worst things you can do is lie about your driving history or background to get a better deal. Lying about your driving history on an auto insurance application is illegal, a form of insurance fraud, and can lead to legal ramifications.

Car insurance companies have millions and millions of data points that can identify inconsistencies in your application and find out about DUIs, accidents, traffic violations, and other unfortunate aspects of your driving history. Some companies will flat-out reject your application if they think you’re not being honest. If you’re already a customer and they discover you lied about your driving history, they could cancel your policy mid-term.

So whether you’re talking about your current car’s condition, driving history, or a recent accident, tell the truth. The alternative is not worth it.

Citations

  1. How Do Auto Insurance Deductibles Work? American Family Insurance.
    https://www.amfam.com/resources/articles/understanding-insurance/how-do-deductibles-work

  2. Facts + Statistics: Uninsured motorists. Insurance Information Institute. (2022, Oct 25).
    https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists

  3. 2018/2019 Auto Insurance Database Report. National Association of Insurance Commissioners. (2022).
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf