How To Compare Car Insurance

Learn how to compare car insurance quotes and providers to choose the best policy for you.


Article QuickTakes:

Knowing how to compare car insurance policies is an important skill if you want to get better coverage for a good deal. Whether you're buying a policy for the first time or switching because you're unhappy with your current insurance carrier, these tips can help you get the right policy for your budget.

What To Look for in a Car Insurance Policy

The right car insurance policy for you will be one that offers the minimum coverage your state and lender require plus the optional coverage you want to carry to reduce your risk. The policy should also offer the coverage you want with deductibles and premiums that fit your budget.

Necessary Coverage

Almost every state requires drivers to carry liability insurance. New Hampshire and Virginia allow drivers to self-insure with proof of financial responsibility.

Among the 48 states that require insurance, most require at least $25,000 per person and $50,000 per accident in bodily injury liability coverage. If you're at fault in an auto accident, this coverage will pay for the medical bills of injured parties. Most states also require at least $10,000 to $25,000 in property damage liability coverage per accident. If you hit another car, someone's home, or a mailbox, this insurance will help pay to repair the damage.

Ten states require drivers to carry uninsured and underinsured motorist bodily injury liability coverage, typically $25,000 per person and $50,000 per accident. If you get hit by a driver who doesn't have enough coverage to pay for your injuries (or who flees the accident scene), your insurance will pay for them, up to your policy limit.

Nice-To-Have Coverage

Additional liability coverage beyond the minimum may be smart to carry as well, since it can protect you from financial ruin.

Consider a severe accident involving just one other person and one other vehicle, or a moderate accident involving multiple vehicles. Depending on what state you're in, if you're at fault and you carry only the minimum liability coverage, the injured parties may be able to seize your assets, place a lien on your home, or garnish your wages. Further, your state may have the right to suspend your driver's license. In advance of situations like this, it may make sense to consider carrying at least 10 times the minimum for better protection.

To protect yourself, you may want to purchase collision coverage. This insurance will pay to repair your own vehicle if you're at fault in an accident. If you're financing or leasing your car, your lender will usually require you to have collision coverage, but it's optional if you own your car free and clear. Whether you have to buy it or not, you'll probably want it. Even a minor accident can cause thousands of dollars in damage and may total your car.

Comprehensive coverage protects you against damage to your vehicle that isn't caused by an accident. If a tree limb crushes your car, a tornado tosses it into the neighbor's yard, or someone steals it, that's where this insurance might be able to help. Again, lenders may require it, but it's optional otherwise.

How To Compare Car Insurance Rates

To compare car insurance rates, you should request the same types and amounts of coverage from each company that you receive a quote. If you don't do this, you won't be comparing identical products, and it will be hard to tell which company offers the best pricing.

However, it's not always easy to make these direct comparisons, especially online. The options you can choose from may vary from one carrier to another, especially when it comes to coverage limits and specialty coverage. That's why you'll need to go beyond comparing rates when choosing your auto insurer.

How To Evaluate Car Insurance Companies

You might be surprised to learn that each insurance company evaluates risk a bit differently. Drivers with certain characteristics may get better rates with some companies than others. For example, drivers of a certain age, drivers with a speeding ticket, or drivers with an accident might pay several hundred more dollars per year with one insurance company than another.

Here are some other factors that set some car insurance companies apart from others:

  • Telematics: Careful, skilled, and experienced drivers who are willing to let their insurer track their acceleration, braking, speed, mileage, and time of day may save money by choosing an insurer who offers this usage-based insurance
  • Guaranteed Asset Protection (GAP) insurance: Not all insurers offer GAP insurance. You might want this coverage if you're leasing a vehicle or purchasing a newer vehicle with a longer loan term.
  • Rideshare insurance: If you drive your personal vehicle part-time for a ridesharing company, you may want additional coverage that picks up what your personal auto insurance and the rideshare company's insurance leave off
  • New car replacement: This option for additional coverage protects you against the rapid depreciation of a new car. If your new car is totaled or stolen in the first year, your policy can give you enough money to purchase another car of the same model year
  • Dedicated agent: Many insurance companies have agents, and you might be able to work with the same one for years, calling them anytime you have a question about your coverage or a claim. Other insurers operate exclusively online and require you to contact customer service for help

Final Considerations

Whether you're buying car insurance for the first time or switching carriers, you have multiple factors to consider before selecting your new policy. Paying close attention to your different options and how each insurer prices the coverage you want can help you get a better policy for less money.

This site is for educational purposes only. The third parties listed are not affiliated with Capital One and are solely responsible for their opinions, products and services. Capital One does not provide, endorse or guarantee any third-party product, service, information or recommendation listed above. The information presented in this article is believed to be accurate at the time of publication, but is subject to change. The images shown are for illustration purposes only and may not be an exact representation of the product. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.
author photo
Amy Fontinelle
I have more than 15 years of experience helping people make informed decisions about their money, whether they’re shopping for an auto loan, refinancing a mortgage, or buying insurance. As a freelance writer specializing in personal finance, I explain the products and strategies that can help (or hurt) people seeking greater financial security. When I’m not reading the fine print or making spreadsheets, I’m blooming spices for a curry or squinting through a viewfinder.