Here’s the Best Way to Shop for Car Insurance

There are plenty of good reasons to start shopping for car insurance. Maybe you just got a new car or perhaps you’re simply not happy with your current provider and think you can save money elsewhere.

In any case, shopping around to find the lowest possible premiums with a great provider doesn’t have to be complicated. You can nail the process in three simple steps, and it doesn’t have to take longer than an hour or two. And then you can rest easy knowing you’ll probably save hundreds, or even thousands, of dollars over the next few years. 

But what does the process look like? How do you determine how much insurance you need? How many quotes should you get, and can you successfully negotiate without FBI training?

Read on to learn how to shop for car insurance the right way.

Erika Taught Me

  • It's important to understand your car insurance needs so you don't pay for coverage you don't need.
  • Gather your documents and get at least five quotes.
  • You can negotiate with insurance companies

1. Determine how much insurance you need 

Do you know how going to the grocery store with an actual shopping list helps you shop quickly, and efficiently and avoid expensive (and high-calorie) distractions? 

Car insurance is the same way. If you start shopping without an exact list of what you need, you may end up buying too much or too little. And unlike buying a donut and forgetting the oat milk, the consequences of having the wrong amount of auto insurance can be severe. You could end up paying way too much for coverage you don’t need or lacking adequate coverage when you need it.

So let’s start by making a shopping list. Here’s a list of the most common types of car insurance coverage, a short description, and quick tips to help you decide how much coverage is enough: 

  • Liability coverage: This covers the other person’s medical bills and property damage after an at-fault accident. It may also cover your legal bills. In general, it’s best to have a little more than your state’s legal minimums to protect yourself in case of a lawsuit.
  • Collision coverage: This covers the cost to repair or replace your vehicle after a collision, regardless of fault. If you’re not the best driver, or if your uninsured motorist protection wouldn’t cover the cost of replacing your car, collision insurance might be a good investment.
  • Comprehensive coverage: This covers the cost to repair or replace your vehicle after a non-collision “incident” like vandalism, theft, or weather damage. It’s a good investment if you live in a dense or high-crime neighborhood, or one prone to severe weather.

If you lease or finance your car, your lender probably already requires you to have “full coverage,” which is liability, collision, and comprehensive bundled together. In this case, the choice of how much to buy is already made for you. 

Related: What is liability insurance?

Other forms of car insurance

These may not be required by law or lender, but may still be a good idea:

  • Uninsured/underinsured motorist (UIM) covers your repair bills and medical bills if another driver hits you but has either no insurance at all or limits that are too low to fully cover your bills. It’s a good idea to have at least some UIM protection since roughly 1 in 8 drivers on American roads is uninsured, according to the Insurance Research Council. 
  • Personal injury protection (PIP) or MedPay covers your and your passengers’ medical bills regardless of who’s at fault. PIP is like “MedPay Platinum” and can also cover lost wages and childcare. PIP is required in some states while MedPay is optional. The latter might be a good idea if you have high health insurance deductibles or uninsured passengers. 
  • Gap insurance kicks in if your car is totaled, and covers the difference between what your insurance pays and what you still owe. Most loans and leases require gap insurance, but if not, you may still want it if your vehicle is likely to depreciate quickly and you put less than 20% down. 
  • Rental reimbursement helps to cover the cost of a rental car or other transportation, like ridesharing, while your car is getting repaired or replaced by insurance. It might be a good idea if the sudden loss of your car could cause a loss of income and you don’t have another car to borrow. 
  • Roadside assistance covers, well, roadside assistance, e.g. tire change, battery jumps, lockout assistance, fluid delivery, and towing. It’s like AAA but offered by your insurance company. But your new car warranty may cover roadside assistance for free, and if not, AAA is often cheaper.

In the end, you may come up with a shopping list like this: 

  • Liability: $50,000 bodily injury per person / $100,000 bodily injury liability per accident / $50,000 property damage liability per accident, otherwise shown as 50/100/50
  • Comprehensive: $1,000 deductible
  • Collision: $500 deductible
  • Uninsured/underinsured motorist (UIM): $50,000 per person/$100,000 per accident
  • PIP: Yes (my state requires it)
  • Gap: Yes (my loan agreement requires it)
  • Rental reimbursement: I’m good, I’ll borrow my roomie’s car
  • Roadside assistance: Nope (already included in my factory warranty benefits)

Related: What is an insurance deductible?

2. Gather your information

You'll need a few things in hand before you start getting car insurance quotes. You'll also be asked for a lot of information such as your name, social security number, address, etc. Some of this you'll know off the top of your head, but some information will be helpful to gather before you begin.

When getting quotes you'll likely need the following:

  • Driver's license number
  • Driving history
  • Claims history
  • Vehicle identification number (VIN)
  • Make and model of your car
  • How many miles are on the car

3. Get at least five quotes online

Like any other for-profit entity, insurance companies want your business. Therefore, most of them have made it extremely quick and easy to get quotes entirely online. We timed ourselves, and even with a break to eat that donut from earlier, it only took us about four minutes to get our first online quote. 

That means that in less than an hour, you could have quotes from all 10 of the largest auto insurance providers in the U.S., according to NAIC rankings

  1. State Farm
  2. Progressive
  3. GEICO
  4. Allstate
  5. USAA
  6. Liberty Mutual
  7. Farmers Insurance
  8. Travelers
  9. American Family Insurance
  10. Nationwide

We encourage getting at least five quotes — ideally, more — because you’ll be shocked at how wide the spread can be. On our sample Mazda Miata, our insurance quotes ranged from $479 for a six-month policy to $1,288. So the more quotes you collect, the more likely you are to find the one that makes you go, “Wow, that’s it?”

Granted, some providers may stop you partway through your online quote process and ask you to call in to complete your quote. This isn’t necessarily a bad thing, and in our experience talking to hundreds of car insurance representatives (anonymously), they tend to be friendly, non-pushy, and highly knowledgeable. 

Plus, hopping on the phone with a provider gives you a chance to explore discounts you may have missed, ask questions about some of the coverage types listed above, and ask what factors may be driving your quoted premiums up or down. 

To illustrate

One provider told us that our premiums were higher than expected because they classified the Miata as a “sports car.” Another provider told us our premiums were lower than expected because it had such low horsepower (which felt like a burn, but in the context of saving money, we let it go). 

Once you’ve dedicated an hour or so to collecting quotes via online quote wizards and phone calls, you’ll have a list of five to 10 possible providers with numbers beside them. 

Now, take a second to look at the difference in price between the first quote you got and the lowest quote you got. That’s how much money you just saved, all by doing an extra hour of due diligence. 

And hey — even if the first quote is the lowest quote you got, at least you can rest easy knowing you got the best possible deal. 

And if you want to save even more money and feel like a personal finance badass, move on to step three. 

4. Negotiate (the super easy way)

When we say “negotiate,” what sort of images spring to mind? 

Maybe it’s a sweaty used car dealer with his feet propped on the desk between you, smugly awaiting your next attempt to shave $500 off the out-the-door price like a tennis pro waiting for a serve. 

Well, we’re here to tell you that negotiating doesn’t have to involve any tense verbal jousting whatsoever. In fact, one of the single most effective ways to negotiate is to simply:

  1. Find the best possible price
  2. Ask the others to beat it
  3. Rinse and repeat

In our experience, this simple tactic works for negotiating the price of cars and car insurance alike. Say, for example, that you get your five to 10 quotes in step 2, but your favorite provider didn’t give you the lowest quote. Rather than wheeling and dealing, simply copy/paste a screenshot of your actual lowest quote, send it to your preferred provider, and kindly ask them to match it. 

To set expectations, this won’t work 100% of the time. Our batting average is about 0.400. Some providers don’t play ball, while others say they can come down some of the way, but can’t match your lowest quote dollar-for-dollar. 

But when it works, it’s glorious and may be the fastest way to save on auto insurance without lowering your total coverage amount. 

Two man holding calculator signing insurance form. Guide to a best way to shop for car insurance.

FAQs

What’s the best way to shop for car insurance? 

Before you shop for car insurance, assess your needs first, come up with a shopping list of coverage levels and deductibles, and then get plenty of insurance quotes to find the best possible price.

Do I have to wait until my six-month policy term is over to switch to a new provider? 

No. You can break up with your provider any time you want. If you paid for six months in advance, they should provide you with a prorated refund based on your remaining policy term (e.g. a 50% refund if you cancel three months in). 

That being said, make sure that your new policy starts within 24 hours of your old policy ending. If you leave a gap in your auto insurance coverage — even for a day — it can raise your premiums.

How can I get the best deal on a car insurance policy? 

You can save on auto insurance premiums by lowering your coverage levels, raising your deductible, shopping for a better rate with a different provider, using a competitor’s quote to negotiate with your current provider, and taking advantage of as many discounts as possible.

What’s the best car insurance “hack”?

Some providers will give you a defensive driving discount after taking a one-hour online course. You can find these courses online by searching “defensive driving course discount in [your state].” Always check with your provider before purchasing to make sure it qualifies for a discount. Courses typically cost about $25 and the discount can range anywhere from 8% to 15% for the next three years, depending on the provider. 

How do I “negotiate” with giant car insurance companies?

Just bring them a lower quote from a competitor and politely ask if they can beat it. If they can, bring your new lowest quote to the original provider and ask them to beat it. Rinse and repeat until you find the lowest possible number. 

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I'm an award-winning lawyer and personal finance expert featured in Inc. Magazine, CNBC, the Today Show, Business Insider and more. My mission is to make personal finance accessible for everyone. As the largest financial influencer in the world, I'm connected to a community of over 20 million followers across TikTok, Instagram, YouTube, Facebook and Twitter. I'm also the host of the podcast Erika Taught Me. You might recognize me from my viral tagline, "I read the fine print so you don't have to!"

I'm a graduate of Georgetown Law, where I founded the Georgetown Law Entrepreneurship Club, and the University of Notre Dame. I discovered my passion for personal finance after realizing I was drowning in over $200,000 of student debt and needed to take action-ultimately paying off my student loans in under 2 years. I then spent years as a corporate lawyer representing Fortune 500 companies, but I quit because I realized I wanted to have an impact; I wanted to help real people and teach them that you can create a financial future for yourself.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.