Know the terms you'll see and how to interpret them on a car insurance quote so you can compare and save.
The Top Line
- You must have car insurance in all states to protect other drivers and yourself.
- Liability is a bare minimum, but comprehensive insurance is necessary for cars that are not yet fully owned.
- Car insurance quotes are based on a number of factors, some of which you can control.
If you’re in the process of applying for car insurance and getting quotes from multiple companies, then you might be wondering about the basics of car insurance quotes and how they work. If you can gain a deeper understanding of car insurance quotes, then you can better position yourself to receive a better quote when it’s time to apply for car insurance. When it comes time to price out car insurance, the more knowledge you have, the better.
We’re going to give you the basics of car insurance quotes and what you need to know when applying for and comparing car insurance. Armed with our knowledge and tips, you could save hundreds of dollars on car insurance.
What is Car Insurance?
Before you get too far into the weeds about the car insurance quoting process, you might want to know more about car insurance. Car insurance covers your car, yourself, others’ vehicles, and others while you are on the road, depending on the type of insurance that you get. There are a few different types of car insurance, but you’ll mainly need to know the three most common—liability, collision, and comprehensive.
Liability insurance is insurance that is required. This type of insurance covers the vehicles of others and others themselves, as well. If you cause an accident, liability insurance would compensate others for their losses. It does not, however, cover you or your vehicle generally.
Collision insurance protects your vehicle if you are driving it and are in a collision. It is usually required if you have a loan on your car.
Comprehensive insurance is another type of insurance that many lenders require that you carry if you have a loan on your car. It covers your vehicle if it is damaged when you’re not driving it such as if it is stolen or vandalized.
Full coverage consists of collision and comprehensive insurance.
What Is a Car Insurance Quote?
When you are going through the process of getting car insurance, you will likely fill out the information on the site of your choice to start the application process. Based on the information that you input, the car insurance company of your choice will provide you with a car insurance quote. A quote is designed to tell you how much car insurance from that company would cost. The total cost is called a premium. This is the amount that you would pay to have the insurance.
Premiums can be paid on an annual, bi-annual, or monthly basis. All three of these options are not always the same price, so you should calculate the total you will be paying for each payment schedule.
When you receive your car insurance quote, it is likely that you receive a couple of different options. You might get an option with a lower price that offers less coverage and an option that has the opposite cost and coverage. This allows you some flexibility.
Where to Get a Car Insurance Quote
There are a lot of ways to get a car insurance quote. You can go directly through the company that you think you want to work with by going to their site and filling out a car insurance quote form, which most companies make very easy to access from their website. Alternatively, you can see a lot of different quotes at once to help you price compare and see all of your options. If you want to go this route, then you need only find a car insurance price quote tool that will allow you to compare options from several different companies.
Another option that you have is to work with someone known as an “insurance broker”. This is a person that does the price shopping for you, in exchange for a cut from whatever option you end up choosing. Generally, you do not have to worry about paying for a car insurance quote. They are free to request and many companies are happy to provide you with a quote just on the off-chance that you end up choosing them for your insurance needs.
What Information Do You Need to Provide?
You might be wondering what kind of information you will have to provide to get a car insurance quote. You will have to provide a number of details about yourself in order to get an accurate car insurance quote. These include things like your address, your current auto insurance policy if any, your name, date of birth, marital status, gender, and information about your vehicle and residence.
As for your car, you will need to provide information such as the year, make, and model, your VIN, whether you own or lease your vehicle, and how long you have had the vehicle. With these details, you should be able to use a number of tools to get an instant quote from many different companies.
What is Covered Under a Car Insurance Policy
When you receive your quote, you might be overwhelmed. Don’t worry, it’s actually quite easy. Here are the various sections that you will find within your quote.
Bodily Injury Liability
This will cover the medical bills of anyone that is injured by you in an accident.
Property Damage Liability
This type of coverage will cover property damage to other vehicles when you are involved in an accident.
Personal Injury Protection
If you have been injured in an accident, this insurance will help to cover medical expenses and bills.
Sometimes, other motorists do not have insurance or do not have enough insurance. This type of coverage will pay for medical and property damage for you if you are involved in an accident with a driver who doesn’t have enough insurance.
This coverage will cover damage to your vehicle that occurs while you are not driving it such as if it is stolen or vandalized.
Collision compensates you for damage done to your car when there is a car-on-car collision.
Next to each of these sections, your quote will give you the amount that you are covered for each of them. You will see these numbers fluctuate as you tinker with details or adjust the policy to meet your needs.