Car Insurance for First-timers
Updated January 1, 1 . AmFam Team
Were you previously insured by your parents’ auto insurance policy? Or maybe you just bought your first car! Either way, you’re going to need car insurance to keep your vehicle protected from the unexpected.
At American Family Insurance, we think it’s important you’re informed about your policy in order to feel confident in your coverage.
Instead of thinking of insurance as just the cards in your glove box, we’ve highlighted some must-know information to get you savvy about your first car insurance policy.
What Does an Auto Policy Include?
Your car insurance policy is the legal document that tells you all the specifics about your coverage. It includes:
- How much coverage is provided
- Who and what is covered
- Limitations and exclusions of your coverages
- Coverage begin and end date
- How much you pay for coverage (known as your premium)
- How to file a claim
How to Choose Auto Insurance Coverage
When purchasing car insurance, you’ll have to decide the type of coverage you want for your vehicle. Each type of car insurance coverage is designed to financially protect you for different situations — coverages span from protecting you, your passengers, other people, damage to others’ property (like their car) and damage to your vehicle.
Your insurance agent can help you decide which coverages are best for you, so don’t hesitate to ask questions to ensure you understand how you’re protected. Take a look at common car insurance coverages to better understand your options.
It’s also a good idea to take the time to evaluate your insurance needs periodically. You may need more or less auto coverage depending on certain life changes. For instance:
- Did you just get married?
- Did you start a family?
- Did you buy a house or a new car?
- Did you retire?
Big life changes like these are great times to review your policy to make sure your needs are being properly met when buying car insurance.
Is Car Insurance Required By Law?
Did you know that almost every single state legally requires you to carry car insurance? Though your state probably requires a minimum amount of liability insurance, keep in mind, the legal requirements they set are typically not enough to cover serious damages to a vehicle or more severe injuries. So you’ll want to research how much coverage you may want on top of the state requirements.
Wondering what coverage amounts to choose? Your agent will help you find coverage suited for your unique lifestyle, but in the meantime, here are some tips to get you started:
- Make sure you at least have the minimum liability requirements for your state. According to dmv.org (Opens in a new tab), if you’re caught driving without insurance, your driver’s license and/or vehicle registration could be suspended, you could receive a ticket, face increased insurance premiums in the future and have to pay some hefty fines.
- Opt for comprehensive and collision coverage if you still owe money on your vehicle or if you wouldn’t be able to replace it without it being a huge financial burden. If you lease or have a loan on a car, you’ll typically be required to have collision and comprehensive coverage.
- According to the Insurance Information Institute (III), it’s recommended to carry $100,000 per person of bodily injury liability coverage, and $300,000 per accident. Collisions that cause injuries to others can result in big medical bills. With the right policy, you’ll have coverage for medical payments.
You’re also required to have proof of insurance in your vehicle at all times. If you were to get pulled over, you’d be asked to provide proof of insurance, and if you don’t have that information on hand, you could receive a ticket — on top of the ticket for which you were originally pulled over!
Many insurance companies have apps that you can download on your smartphone for quick access to your insurance cards.
At American Family Insurance, you can download the MyAmFam (Opens in a new tab) app and have your insurance information at your fingertips.
We make it easier than ever to protect your dreams on the go. From roadside assistance to real-time payment status, the newly enhanced MyAmFam app is packed with features! It’s never been more convenient to keep up with your home, auto and umbrella insurance.
You can also sign up for My Account (Opens in a new tab), which lets you easily access your policy, insurance cards, make payments, file and review claims and manage your bills. You’ll also find easy access to your insurance card.
How to Pay for Car Insurance
When you purchase car insurance for the first time, there’s a lot you need to know. You’ll make periodic payments known as your premium. A premium is the amount you pay for coverage under the contract in order to stay insured. Typically, you can choose to make monthly payments or opt to pay bi-annually. Many times, companies offer a discount for those who choose to pay in full (bi-annual), so be sure to ask your agent if you’re eligible.
If you don’t make your payment by the payment due date, your policy will lapse. This means that the benefits stated in your policy are no longer active. Thankfully, insurers usually offer a grace period in which you have additional time (typically 10-14 days) to pay your premium. Once the payment is made, your policy goes back into effect. And you’ll be covered once again. This is known as reinstatement.
Want to make sure you never miss a payment? You can sign up with My Account to automatically have your premium deducted (Opens in a new tab) on your due date.
What Is a Deductible?
"Deductible" is a common term you’ll hear as you learn about car insurance.
A deductible is the amount you’ll pay out of pocket for repairs before your insurance company steps in to cover the rest. You’ll choose a deductible amount when purchasing your car insurance and that’ll be the agreed upon amount you’ll pay in the event of an accident.
Do you always have to pay a deductible? Nope! In fact, you’ll typically only have to pay a deductible if you have comprehensive or collision insurance. Here’s some more info about deductibles, including some specific instances you might run into when paying one.
Why Do You Need Roadside Assistance Coverage?
When the unexpected happens, like a flat tire or a dead battery, our Emergency Roadside Assistance is there for you and ready to help. It’s an additional, inexpensive coverage on your policy that’ll help get you back on the road.
If you need a tow or if you accidentally locked your keys in the car, we’re just a phone call away. Find out more about our 24/7 Emergency Roadside Assistance and learn how this coverage can give you peace of mind.
How to Save Money on Car Insurance
There are a lot of great ways to save on your auto insurance plan. Here’s a list of ways to decrease your auto insurance premium and save some cash:
Know your credit history. Work on improving your credit score in the months before purchasing your own policy. Boosting your score can help you qualify for lower rates with your car insurance company.
Select the right deductible. Insurance premiums are based in part by your deductible. If you select a higher deductible, you may see a decrease in your premium.
Ask your insurance company about discounts. Many companies offer discounts for simple efforts, like paying your bill in full, bundling your policies or for having a good driving record. Be sure to ask your agent about all the discounts you qualify for with American Family Insurance.
Getting a Car Insurance Quote
Ready to take the plunge and get your first car insurance policy? With American Family Insurance, we’re 100% focused on helping you protect what matters most. You’ll get:
- A local insurance agent who knows you and how best to support you.
- A claims specialist ready to step in and keep things running smoothly.
- A convenient and easy-to-use online option for submitting your claim.
- 24/7 phone support to keep your claim moving.
Get a personalized insurance quote conveniently online, or connect with your American Family Insurance agent (Opens in a new tab) — they’re ready to help customize your car coverages to fit your unique needs.
