Applying for Car Insurance

Follow these helpful steps when applying for car insurance - 1) learn your state’s minimum requirements, 2) determine how much coverage you need, 3) consider how often you drive, and 4) note your financial status as this can affect your insurance rates. Scroll down for more helpful tips and how to choose the right car insurance company when applying for auto insurance.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 27, 2020

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Things to know...

  • Applying for car insurance involves being aware of a number of different factors
  • Make sure you have the state mandated coverage before looking into other additional coverage
  • Choose your plan based on your individual needs and risk assessment
  • Ask about discounts to save money on your policies

When applying for car insurance, you have a lot to consider to find the best deal. First, you have to consider what types of coverage you need to cover the mandatory requirements to comply with your state insurance regulations.

Then, you need to think about what types of coverage are important to you based on your driving habits and other factors.

In this post, we will share some tips to follow when applying for car insurance so that you will get the best deal for your money and make sure you are covered for those unexpected accidents.

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How to Get Your State Minimum Coverage

United States of America map-1600x1600

One thing you need to do first is to find out what the minimum requirements are in your state. Your state of residence regulates insurance, so it’s important to be familiar with the minimum requirements in your state.

It’s important that you carry the minimum coverage that your state requires to avoid significant fines and other problems that can result in failing to carry the minimums.

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Why do states require minimum insurance coverage?

Some people wonder why states require you to carry minimum coverage for liability. The reason is that, if insurance was not in place, you could be sued for much larger amounts from injured parties if you are found to be at fault in an accident.

Insurance was developed to create a system that would allow everyone to pay for claims by paying monthly premiums.

Then, if you have an accident, everyone else would contribute to paying for your liabilities.

If you do not carry insurance, it puts an added burden on the insurance system due to lawsuits. Insurance is meant to serve as an alternative for lawsuits when there are injuries or property damage due to your negligence.

What about other states?


In addition to knowing the insurance regulations in your state of residence, you should also be familiar with state policies in states that you plan to travel to.

If you have an accident in another state, you will be responsible for the laws governing that state. Even if you are on vacation, you are under the jurisdiction of the state in which the accident occurred.

How to Find the Best Car Insurance

When applying for car insurance, the following tips should help you determine the types of coverage you need.

Consider How Often You Drive

One of the most important factors in determining your personal insurance need is to think about how much you use your vehicle.

If you drive a long distance to work each day or take a lot of out-of-town trips, you may want to increase your liability coverage amounts or add additional coverage to your policy.

Shop and compare companies to see which one can give you the best coverage for the premium you are paying.

Make and Model of Vehicle

The make and model of your vehicle will determine the amount of insurance you may need. If you have a sports car, you will pay more money for collision insurance than if you have a standard vehicle.

Rare or foreign make cars will also cost more to insure.

Also, whether or not you use your vehicle for work may impact your costs.

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Driving Record

Your driving record is a chief factor in determining how much your insurance will cost.

Drivers with a good record may be able to qualify for good driving discounts or other discounts on their premiums, so look around to see what different companies offer.

Personal Liability

The personal liability that you may have due to your situation may differ from others’ liability. You should consider the level of risk that you have based on your driving habits and how many people you have traveling with you on average.

The more people who travel with you, the more your risk or liability to others. You can increase the amount of coverage per person that travels with you if you regularly take people with you in your vehicle.

Personal Financial Status

When applying for auto insurance, consider the amount of insurance you can afford. Never purchase more insurance than you think you can afford without a financial burden.

You should also consider how much coverage you should get to cover expenses that you could not pay yourself in the event of an accident. Insurance covers an accident up to the amounts you have for liability.

But you may want to add collision or comprehensive coverage, as well, to protect your vehicle in the event of property damage to your own vehicle.

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Fault vs. No-Fault States


Another factor that needs to be considered is whether you live in a fault or no-fault state. Fault states require the person who is “at fault” to have their insurance pay for damages.

No-fault states take the perspective that every driver should pay for their damages, whether it was their fault or not.

This type of arrangement results in more lawsuits in states such as Florida and Pennsylvania, where there is a “no-fault” law in place.

In the event of an accident, you would be responsible for your damages or injuries. If the other party decides to sue you for additional liabilities, you would need to have PIP (personal injury protection).

Personal injury protection insurance also covers additional expenses that you may incur as a result of an accident such as medical coverage and lost wages.

What is medical coverage insurance?

Medical coverage insurance is not health insurance. Rather, it is insurance that covers the medical expenses that you incur as a result of an accident.

In a no-fault state, your insurance company will be responsible for paying this, even if the accident is not your fault. Having PIP insurance can help to fill in the gaps for these types of expenses in the event of an accident that causes personal injury or lost wages.

What to Look for in an Auto Insurance Company


When applying for car insurance, there are some specific aspects you may want to consider to find the best deal.

Types of Available Coverage

When comparing car insurance companies and plans, ask about the types of coverage that are available. Some insurance companies offer additional coverage such as roadside assistance, additional liability coverage, and PIP, to name a few.

You do not have to accept all of the extra coverage types, but it’s good to have the option of adding these if you need them later.

Cost of Premiums

The cost of your insurance premiums will be based on your driving record, the make and model of your car, your age, and other factors. But you should compare different policies and insurers to see which one offers you the best deal, given your status and car details.

Never take out a policy that you cannot afford but do a lot of comparison shopping so that you will know which one offers you the most coverage for your money.

Available Discounts

Price is not everything, but you may want to find out if there are any discounts available for your insurance policy before deciding on a plan.

There are discounts available for many companies due to your type of profession, the number of miles you drive yearly, and even your driving record.

Ask an agent to tell you what types of discounts are available when you purchase insurance and take advantage of these discounts when available.

Payment Methods

One of the most important aspects of taking out an insurance policy is knowing you will be able to pay your premiums.

If you let your premiums lapse, you will not be covered for the time that you fail to pay your bill.

Find out what types of payments they take when you sign up and set up automatic payments if available.

Some companies offer a discount for an automatic bank draft.

Claims Record

Insurance does no good if you do not get your claims paid. Check on the claims record of the companies you are considering before signing the paperwork for a policy.

Reputable insurance companies will gladly tell you what their claims policy is and how long it takes to pay a claim. This is important to know before you decide to commit to a particular company.

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What You’ll Need When Applying for Car Insurance


When you decide on a car insurance company, keep in mind that you’ll need to supply some personal information to sign up. Having the following information available when you contact an insurance company will save you a lot of time later.

  • Driver’s License
  • Social Security Number
  • Banking Information
  • Vehicle Information
  • Contact Information

Driver’s License

The most basic requirement of obtaining car insurance is having a driver’s license. This is proof that you are a valid driver in your state of residence and that you are insurable.

Insurance companies also use your driver’s license to run a check on your driving record to help determine your rates. Have your driver’s license number handy when you call a car insurance company.

Social Security Number

Your social security number identifies you in a database where insurers can verify your identity, age, and other relevant information.

As with many other types of personal contracts, your Social Security Number may be requested as means of confirming your identity when speaking to customer service representatives in the future.

Banking Information

If you are going to use an automatic draft to pay for your premiums, you’ll need to provide your bank routing and checking numbers so that insurers can deduct the proper amount each month.

Vehicle Information

Have your vehicle information available when you sign up for car insurance so that your car will be identified on the network in the event of an accident. It also helps to get your claim filed faster when they have this information.

Your VIN (vehicle identification number) is required to sign up for coverage.

Contact Information

Your contact information must be included in your application so that insurance companies will know how to get in touch with you regarding your policy, payments, or claims.

The best way to know you are getting the best deal on car insurance is to compare different companies and policies.

Ask questions about discounts, extra coverage types, and other information that you need to find the policy that is best for you.

Protecting yourself and your family from unforeseen events is what insurance is all about.

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