If you’ve considered buying car insurance online, you’ve probably wondered how the auto insurance shopping process works. Is it as easy as booking a flight, or far more complex? The answer depends on who you are and what you need from your car insurance.
Before you start collecting insurance options, learn how buying car insurance online works, from quick quotes to insurance cards. Depending on your situation, you may discover that shopping and comparing your options is more challenging than you’d hoped. However, the benefits in terms of timing and convenience may outweigh the hassles. Here’s what you need to know before buying your car insurance policy online.
How Does Buying Car Insurance Online Work?
Some insurance carriers allow you to purchase auto insurance online. This is known as “direct” insurance, as it’s sold directly to the consumer. Other insurers only allow policies to be sold through insurance agents.
You may decide to request quotes directly from insurers’ websites, or you could use a site that collects multiple auto insurance quotes for you. Multiple-quote sites can vary widely; they may offer real-time quotes or quotes based on estimates, or they may even compare new policies to your current policy.
These price-comparison sites might also generate “leads” or future business for affiliated insurance companies or agents, which could mean you receive emails and calls from one or more insurers. Before submitting personal information, it’s a good idea to investigate a site’s privacy or opt-out policy.
Step 1: Choose Your Desired Coverage
First, decide what types of coverage you need and want so you can accurately compare offerings between insurers. These might include:
- Liability coverage: How much coverage do you want or need if you harm someone else or their property? Remember that liability coverage doesn’t include damage to your own car or property. States set their own minimum liability coverage requirements, but those amounts may not cover all the damage caused by an accident. For example, if you cause $50,000 in bodily injury to a person in an accident, but your insurance only covers $25,000, you’re responsible for the difference.
- Collision and comprehensive: How much coverage do you want or need if your car is damaged or destroyed by weather or an accident?
- Uninsured/underinsured motorist: If an uninsured motorist hits you, how much coverage do you need for any damage to your own car or medical bills? In some states, insurers are required to offer you this coverage with liability, while in others, you’ll pay extra.
- Medical payments or personal injury protection (PIP): If you or your family are injured in an accident, how much coverage would you need to cover medical bills, physical therapy, and even lost wages during your recovery?
- Special coverage: Do you have special, high-value items in your car such as an expensive stereo? Do you want to carry roadside assistance coverage or coverage for driving in Mexico?
- Deductible: This is the amount you’ll pay out of pocket before your insurance kicks in to cover damages. How much are you willing to pay in exchange for a lower premium?
If you financed your vehicle, your auto lender may also have insurance requirements, such as carrying comprehensive and collision coverage. Be sure to ask before starting your online purchase process.
Step 2: Get a Quote
To get an online quote, you’ll need to share some essential information. Be prepared to have the following documents and information on hand:
- Your car’s information: Year, make, model, cost, and vehicle identification number (VIN), along with whether it’s leased or owned outright.
- Vehicle use: Whether you drive for business or personal reasons, as well as the number of miles you drive annually.
- Driver information: Names, marriage status, birthdates, and driver’s license numbers for all drivers in your household. You may also be asked for your Social Security number, credit rating, education level, and field of employment.
- Driving records: All accidents and claims—even those ruled not to be your fault—and how long you’ve been driving.
After you input your information, the insurer will generate a quote for auto coverage. The quote is just an estimate of the rate you might pay, based on what the insurance company assumes about you and your risk. You’ll either be prompted to continue with the purchase online, asked to call an agent, or emailed your quote.
During the quote-generation process, you should be asked questions to help determine whether you qualify for an auto insurance discount, such as if your car has safety features like airbags or a security alarm. Check the quote to ensure these discounts were applied accurately.
Online auto insurance rates may be different than those you’d get from an agent. Agents typically factor in commissions or sales fees, but online purchases may come with their own costs, such as the insurer’s calculation of maintaining the business or call center.
Step 3: Compare Quotes
Some insurer websites allow you to adjust coverages and amounts to see how they affect the quote—for example, removing comprehensive coverage if you drive an older car, or raising the deductible. However, to fully customize your policy, you may need to speak with an agent.
A few states offer rate comparison guides to help consumers make informed insurance purchases. These guides compare rates with and without accidents, with drivers of different ages, and other factors.
When you review your quotes, compare the costs as well as the following:
- Coverage amounts for liability, comprehensive, and collision coverage
- Term; if the policy only lasts for six months, you may need to repeat the online shopping process sooner than you’d like.
- Discounts, including for low mileage, paying in full, requesting a paperless policy, and certain memberships
- Coverage included or available at extra cost, such as accident forgiveness, roadside assistance, pet protection, and identity fraud
Before offering you a final policy rate, the insurance company will review your driving record and claims history, and potentially your credit history. If the insurer discovers a poor driving record that you haven't previously disclosed, the final rate may be much higher than you initially expected or were quoted.
After you pay for your policy and coverage is initiated, you’ll get a temporary insurance coverage card or a digital insurance card.
You may get a better online quote if you bundle your auto insurance with home or renters insurance. Be prepared to compare quotes with varying types of coverage to find the best fit for your needs.
Pros and Cons of Buying Car Insurance Online
Convenient shopping experience
Convenient purchasing experience
Comparisons are time-consuming
Potentially inaccurate quotes
Not suitable for all drivers (or vehicles)
Not all insurers offer online sales
No specific agent to contact
- Reduced pressure: Insurance shopping in person might involve information overload and high-pressure sales tactics. Online shopping allows shoppers to consider their options and read up on coverage.
- Convenient shopping experience: You can shop for auto insurance online at any time of day or night, and can take the time to investigate and compare quotes.
- Convenient purchase experience: Most insurers will email you a quote and allow you to think it over or compare it with others. Some insurance companies allow you to complete the entire process online, while others require you to speak with an agent as the final step.
- Potential discounts: Some insurance companies offer discounts for buying online, or even for requesting an online quote.
- Time-consuming comparisons: Accurate comparisons of quotes and coverages take considerable time, research, and analysis. Differences in deductibles, for example, can significantly affect your quote. One insurer might include roadside assistance or pet coverage, while another charges extra or doesn’t offer the coverage.
- Potentially inaccurate quotes: The online auto insurance quote may not be accurate if you don’t disclose all your personal information, or if the insurer later determines you’re risker than they first thought. For example, an insurer asks for your car’s make, model, and year in the initial request, but doesn’t ask for the VIN—which would reveal the car’s full history, including any accidents.
- Not suitable for all drivers (or vehicles): If you have an unusual situation, online insurance shopping may not be an option. For example, if you’re rejected due to DUI or because you’re considered a high-risk driver, you may need to go through an agent or a state insurance plan. Some insurers don’t offer online quotes for specialty cars, motorcycles, RVs, or households with more than five drivers or cars. If you want to bundle policies (such as car and renters insurance), you may not be able to do so online.
- Not all insurers offer online sales: Some insurers only work through independent agents and don’t offer online quotes. Others allow you to start the process online but ask that you speak with an agent to complete your purchase, which won’t work if you want an all-online experience.
- No specific agent to contact: Online shopping often does not involve a licensed agent, and some consumers appreciate having a specific person to contact when they have insurance-related questions.
Who Should Consider Shopping for Car Insurance Online?
If you have plenty of time, are an avid deal hunter, and understand auto insurance coverage well enough to compare quotes, you might consider shopping for car insurance online. Uncomplicated scenarios (one driver, one average car, no accidents, no plans to bundle insurance, no specialized needs) could be the best fit for online car insurance shopping.
But you might seek out an independent agent, who can offer quotes from multiple carriers and help you narrow down your choices, if any of the following apply:
- You feel confused by the terminology and coverage amounts.
- You have high-net-worth assets to protect (such as a home, yacht, or classic car).
- You want to bundle several types of insurance coverage together.
- You have a unique situation or driving history, and you want a professional to help you interpret your options.
Frequently Asked Questions (FAQs)
What documents do you need to get car insurance online?
You should have the following documents or information handy:
- Driver’s license
- Vehicle Identification Number (VIN) for all household vehicles
- Your driving history
Some online insurance brokers may also request your current insurance declarations page, or request you connect them to your current insurer.
Can I buy car insurance online without a car?
Insurers typically request auto information during the online shopping process. If you want to purchase non-owner insurance, it may be best to contact an agent to help you find the right coverage. Some insurers don’t offer insurance to people without a car.
What is the cheapest online car insurance?
Insurance rates vary based on the driver, vehicle, and state. To find the cheapest online car insurance, you will need to compare rates—but make sure you’re considering the coverage details so you find the best insurance for you, not just the policy that’s cheapest upfront.
Could my rate change after I get a quote?
Yes, if the quote you received was based on inaccurate information or was a simple estimate. If time has elapsed between the quote and when you’re ready to buy auto insurance online, the rate could change. Any change to your driver or consumer record, such as if you cause an accident after requesting the quote, could impact the bottom line, too.