How to Buy Car Insurance (Step-by-Step Process)
Maybe you just bought a car. Maybe you aren’t happy with your current insurance provider. Or maybe your policy is expiring and you simply want to know your options.
Regardless of the reason, something brought you here, which means you’re probably considering buying auto insurance.
At Berry Insurance, we help people get new policies or adjust their current policies every day, so this is right in our wheelhouse, but if you aren’t familiar with the process, we know how confusing it can be.
That’s why we want to help you understand the process step-by-step below, so when you come to us (or another agent or carrier) you are more informed and confident about the insurance policy you are investing in.
Since we are in Massachusetts, we’re going to specifically look at the MA process, so depending on where you live, some parts may vary.
1. Pick an insurance provider:
You wouldn’t buy a car without doing your research first, right?
Well, you should treat shopping for car insurance the same way. Of course, if you’re reading this, that means you have already started your research, so good for you.
When beginning your research, the first thing you should consider is …
Which type of insurance provider to work with:
First, you’ll want to research the various types of insurance providers (direct writer, captive insurance agent, or independent insurance agent) and weigh the pros and cons of each to decide which option works best for you.
We’ll provide a short description of each to help you get started …
A direct writing insurance company is a company that can give you a quote online or over the phone, but does not work through an intermediary, like an agent. Examples of direct writers for auto insurance are GEICO or Progressive.
If you are looking for an auto policy in a hurry, and don’t want to shop around, then buying direct might be your best bet. You’ll likely remove any potential for back and forth conversations, can do all your shopping either online or over the phone.
Captive Insurance Agent
A captive insurance agent represents only one insurance company and can only offer a quote with that one company. Examples of captive agents are State Farm, AllState, and Farmers Insurance.
If you are looking to work with someone more local, but who represents a nationally known insurance company, then buying through a captive might be the way to go.
Independent Insurance Agent
Independent insurance agents (sometimes referred to also as brokers) represent multiple insurance companies and can provide you with multiple quotes. An example of an independent insurance agent would be us here at Berry Insurance, and many other local insurance agents you see as you drive through your town.
If you want to have multiple quotes or options for your auto insurance, shopping with an independent agent is the way to go. Agents are more likely to spend more time discussing your needs, and providing quote options that provide the coverage you need at a price you can afford.
Once you have an idea of which type of provider you want to use, the next step is to …
Choose a specific provider:
You can begin by searching the internet for specific agents or carriers in your area.
Read reviews for the companies on websites like Google Business or Facebook and ask for their credentials to be sure you are working with a reputable company.
Decide what is most important to you in a provider: Convenience? Hours? Online capabilities? Customer service? Consider what your priorities are and choose an agency or carrier who aligns with those.
2. Provide information to the insurance provider:
Once you have decided who you are going to work with, it’s time to reach out to them to get a quote.
The agent or representative you are working with will ask you for all sorts of information including:
- Date of birth
- Driver’s License number
- Information about other drivers in the household
- Information about any accidents or violations
- Vehicle information/who drives each vehicle
- Loan information about each vehicle
- Information to determine eligibility for discounts
- Questions about coverage/limit/deductible options (which we’ll get into more below)
Often, it will make the most sense to bundle your auto policy with your home or renters policy because it saves money. If this is the case, you would also need to provide information about your home or apartment and possessions.
3. Discuss and choose coverage/limit/deductible options:
Auto insurance policies have various coverages, some required and some optional, all with coverage limits.
Your agent or carrier should go over all the coverages with you, and help you determine which you need, and what their limits and deductibles should be.
|Part 1 – Bodily Injury to Others (aka BI)||Provides medical expenses and lost income to anyone that you injure when at fault in an auto accident in Massachusetts. The coverage has two limits: per person and per accident. In Massachusetts, you are required to have $20,000 per person and $40,000 per accident. You cannot increase (or decrease) this coverage.|
|Part 2 – Personal Injury Protection (aka PIP)||If you are involved in an accident, regardless of fault, PIP coverage will pay for any medical bills and lost wages for you and your passengers. The Massachusetts state set amount for personal injury protection (PIP) coverage is $8,000 per person, but deductibles from $0 to $8,000 may apply. You cannot increase (or decrease) this coverage.|
|Part 3 – Bodily Injury Caused by an Uninsured Auto (aka UM)||If you are involved in an accident with someone that does not have insurance coverage or are involved in a hit-and-run incident, uninsured motorist coverage would pay the claim. The coverage has two limits: per person and per accident. In Massachusetts, you are required to have $20,000 per person and $40,000 per accident. You cannot decrease this coverage, but you can choose higher limits.|
|Part 4 – Damage to Someone Else’s Property (aka Property Damage)||If you are involved in an accident and cause damage to any type of property, this coverage is what will pay the claim. Keep in mind – “property” can be more than just another vehicle. Damage to things like telephone poles, guardrails, structural damages to home or storefronts, fences, stone walls, and even mailboxes are all considered “property.”. In Massachusetts, the state minimum required coverage is $5,000. You cannot decrease this coverage, but you can choose higher limits.|
Optional insurance coverages:
|Part 5 – Optional Bodily Injury to Others (aka OBI)||Provides medical expenses and lost income to anyone that you injure when at fault in an auto accident anywhere in the U.S. The coverage has two limits: per person and per accident. The minimum coverage available is $20,000 per person and $40,000 per accident. You can increase this coverage.|
|Part 6 – Medical Payments (aka Med Pay)||Provides reasonable medical expenses for anyone occupying your vehicle at the time of an accident. The minimum coverage available is $5,000 per person. You can increase this coverage.|
|Part 7 – Collision||Provides coverage for damages to your vehicle as a result of a collision accident, regardless of fault. This coverage is subject to a deductible, which at a minimum is typically $300. You can increase your deductible for additional savings.|
|Part 8 – Limited Collision||Provides *limited* coverage for damages to your vehicle as a result of a collision accident. This coverage is subject to a deductible, which at a minimum is typically $300. You can increase your deductible for additional savings.
* Typically you purchase either Part 7 or Part 8 on your policy, not both. At our agency, we always recommend Part 7 to get the broadest available coverage.
|Part 9 – Comprehensive (aka Comp)||Provides coverage for damages to your vehicle caused from something other than a collision (ex. Flood, fallen objects, hail, pests, or collision with animals). This also includes glass coverage. This coverage is subject to a deductible, which at a minimum is typically $300. Glass repair typically does not have a deductible. You can increase your deductible for additional savings.|
|Part 10 – Substitute Transportation (aka Rental)||Provides coverage for rental charges you incur while your vehicle is being repaired as a result of a collision. The minimum coverage available is $15 per day up to $450. You can increase this coverage.
(Note: This coverage does not reimburse for rental fees for other situations, such as vacation rentals.)
|Part 11 – Towing & Labor||Provides coverage for towing and labor (at the scene) costs associated with your car disablement. Coverage available varies by insurance company. The coverage per disablement typically ranges from $50 to $100.|
|Part 12 – Bodily Injury Caused by an Underinsured Auto (aka UIM)||If you are involved in an accident with someone that does not have enough insurance coverage, underinsured motorist coverage would pay the claim. The coverage has two limits: per person and per accident. In Massachusetts, you are required to have $20,000 per person and $40,000 per accident. You can choose higher limits on this coverage.|
4. Select a payment plan:
Once you have selected all your coverages and limits, your agent or carrier will give you a quote for the cost of the policy.
At this point you will have several options of how to pay available to you including monthly installments, pay in full, or through electronic funds transfer (EFT) or automated clearing house (ACH).
Paying in full or through EFT or ACH could save you money on billing fees.
Most insurance companies require a 20% deposit for a new policy.
And that’s it! You have your new policy. At this point, the only thing you will need to do is be ready to …
5. Renew when term expires:
Most policies have a one-year term, but some are only six months.
When you get your new policy, make sure you know what the term is so you are ready to renew.
Most agents or carriers will call you to review your policy and renew for you, but it is best to also be keeping track yourself.
Ready? Get shopping for car insurance:
After learning about how the car insurance buying process works, we hope you feel a little more equipped to research your options and navigate the process.
We know there is a lot to consider, specifically when it comes to the optional coverage and limits. I mean, how do you know what coverages are actually worth your money and how much of each you should get?
For a more detailed look at this, check out the article How Much Car Insurance Do I Need? (And Why the State Minimum Isn’t Enough).
Of course, we at Berry are also always here if you have any questions.