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When it comes down to it, auto insurance can be one of the most important things you purchase all year. But finding the right policy can feel like a daunting task.
Whether you’re buying your first car or trying to save money on your current policy, it’s important to explore your options.
With a little preparation, you can get a good policy with the amount of financial protection you need at an affordable price.
Our step-by-step guide breaks down everything you need to know before you shop for car insurance, including state minimum requirements, online comparison sites and ways to save money on your policy.
How to Shop for Car Insurance in 5 Steps
Car insurance can be expensive.
The average cost of auto insurance in the US is around $137 per month, according to PolicyGenius, an online insurance marketplace.
Shopping around for car insurance is one of the best ways to save money while ensuring you have the coverage you need.
If you’re getting quotes without the help of an independent agent, it’s helpful to understand some car insurance basics before exploring your coverage options.
Step 1: Understand Car Insurance Terminology
First, let’s cover some car insurance terms you need to know before you begin shopping for quotes.
Premiums: The amount you pay for your insurance coverage — and how often you pay your premium — varies by insurance company. Your car insurance policy will generally accept monthly or even semi-monthly payments, but many offer discounts for paying upfront for the entire policy, which typically lasts six or 12 months.
Deductible: The out-of-pocket amount you must pay before your auto insurance starts paying for damage to your vehicle — not damage you cause to other people’s property. Say you hit a deer, causing $1,000 worth of damage to your vehicle, and your deductible is $500. You must pay the first $500, then your car insurance pays the remaining balance.
Coverage Limits: The maximum your auto insurance…
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