How to Purchase Your First Auto Insurance Policy
As a new driver you may have lots of questions about how to purchase your first auto insurance policy. Which company should you choose? What type of coverage do you need?
Step One- Collect your Documentation: Before you start shopping, collect any information that a car insurance agent will need in order to give you a quote. You will need your driver's license, VIN (Vehicle Identification Number) of your vehicle as well as the make and model of your vehicle.
Step Two- Know what's required: If you lease or finance your vehicle, or are planning to, your lender or leaser might have minimum requirements on how much coverage you purchase. Call your lender or lease company and ask what they require and how to forward them your proof of insurance once it's purchased.
Step Three- Get Quotes: The best way to get an idea on pricing is to get quotes from different companies. Our independent agency can very quickly do that for you and it is free.
Step Four- Select a Comfortable Deductible: Your auto insurance deductible is the amount you will pay out of pocket in the event you are involved in an accident where your vehicle or the other vehicle is damaged. While your rate will decrease as you raise your deductible, you want to avoid being locked into a deductible you can't afford in the event of an accident. Think about your monthly income and find a deductible that you would be comfortable paying if you had to pay.
Step Five- Ask for Discounts: New drivers pay high auto insurance rates because of their lack of experience on the road. For this reason, you want to take advantage of any and all discounts you may be eligible for. A good student discount (minimum B average) can save you up to 10% on your vehicle insurance.
Step Six- Stay Organized: After you purchase your policy and receive your documentation, place your insurance card, or a copy of it, in your vehicle. File a copy of your policy where you will be able to find it quickly in case you need to reference it for any reason.
Why do you need my credit history?
Insurance companies use many factors to underwrite an insurance policy. In addition to factors like age, marital status, driving record and type of vehicle, many insurance companies use credit information to evaluate a consumer's financial responsibility.
Insurance companies have found a strong correlation between financial responsibility and insurance losses. The credit information that is reviewed focuses primarily on bill-paying behavior, not credit-worthiness. Using credit information allows assessment of risk more accurately.
Your actual credit report is not seen during the underwriting process. The information will be ordered through an automated system and interpreted by a quoting system in the form of an insurance credit "score." The score will then be used in the underwriting process. When credit information is used as an underwriting tool, the only concern is with the risk grouping into which a consumer falls, which will ultimately influence the consumer's rate.
Will it affect my credit score?
No. The inquiry will appear on your credit report as an insurance inquiry. Insurance inquiries are only reported to you, so they will not be included in credit score calculations by other parties.
No. The inquiry will appear on your credit report as an insurance inquiry. Insurance inquiries are only reported to you, so they will not be included in credit score calculations by other parties.
