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Expert tips on buying car insurance for the first time

December 12, 2022, 6:02 PM UTC
Photo illustration of a young woman driving a car.
Experts say first-time buyers can expect to pay somewhere between $150 and $250 for their monthly premium.
Photo illustration by Fortune; Original photo by Getty Images

Buying your first car is an exciting time for new drivers, but the upfront costs aren’t limited to the vehicle’s sticker price. Apart from state registration costs, taxes, and fees, many dealerships will require proof of insurance for your new car before you can drive it off the lot. 

For first-timers, shopping for car insurance and getting the right amount of coverage at the right price can feel daunting. But the process is pretty straightforward—and once it’s all said and done, you’ll have the peace of mind you need to hit the road. 

How to get car insurance for the first time

If you’re a first-time buyer, here are the steps you should follow to get car insurance for the first time: 

Gather your important documents

When purchasing car insurance, you’ll need to have certain documents and personal information in hand to provide the insurance company you’ve selected with everything it needs to give you your policy. 

The agent will need your personal identifying information (PII), such as your full name, date of birth, home address, and driver’s license number. It will also need key information about the vehicle you plan to insure. You’ll need the vehicle’s year, make, and model, as well as the vehicle identification number (VIN), which can be found on the driver’s side door or windshield. The agent will also ask a few more questions to understand the vehicle’s condition and frequency of use, such as current mileage, yearly mileage, and purchase date. 

This information will not only tell your insurance company what kind of coverage will meet your needs, but it will also help determine a fair rate. 

Determine what kind of coverage you’ll need and how much

Once you’ve gathered essential documents, shop around before settling on one insurance company. Many companies offer free quotes online to help put a number on how much you can expect to pay for coverage. 

While your exact rate will vary depending on your driving record, credit history, age, and more, you can expect to pay somewhere between $150 and $250 for your monthly premium. “With a good driving record and a longer insurance history, it is possible the rate could go down in the future,” says David Stuart, founder and president of Southwestern Insurance Group. 

There are different levels of coverage available, and no two policies are the same. But most basic car insurance policies will include the following: 

  • Bodily injury liability: This coverage applies to injuries that you, the designated driver, or the policyholder causes to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
  • Medical payments or personal injury protection (PIP): This covers the cost of medical treatment of injuries to the driver and passengers of the policyholder’s car. PIP can cover medical payments, funeral costs, and more. 
  • Property damage liability: This covers damage that you (or someone driving your car with your permission) may cause to someone else’s property. That includes damage to someone else’s car, but it also covers damage to public property like lampposts, telephone poles, fences, buildings, and more. 
  • Collision coverage: Collision coverage pays for damage to your car as a result of a crash with another car, object, or if your vehicle has flipped over. It also covers damage caused by potholes. 
  • Comprehensive coverage: This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object. Comprehensive covers events such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer. It will also pay to repair your windshield if it is cracked or shattered.
  • Uninsured and underinsured motorist coverage: This coverage reimburses you if you (or a covered driver) is hit by an uninsured driver or a driver who doesn’t have enough coverage to pay for your total loss. This also protects you if you are a victim of a hit-and-run or you are struck by an uninsured or underinsured motorist as a pedestrian. 

Choose a policy that meets your needs  

Once you’ve compared rates and coverage limits from a few different insurers, you’ll want to select the policy that—at the very least—meets your state’s minimum requirements. Although Stuart says that if your budget allows, you may want to spend a little extra on additional coverage. 

While first-time drivers will likely face a higher premium because they’re new to the road and tend to pose a greater risk to insurers, you can still look for discounts to lower your costs by asking about low-mileage discounts or good student discounts, or bundling your insurance policies. 

“Be willing to learn; we have insurance for a reason,” says Stuart. “You can certainly let the agent know that you are price-conscious and want the best deal, but it is even more important that the agent is able to recommend the right coverage for you. The last thing you want is to get the cheapest policy and then find out later you aren’t covered when you need it.”

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