Before You Get Your First Car Insurance Quote

This lesson is general education about U.S. personal finance, not financial, tax or investment advice. Tax rules and limits change every year; check IRS.gov or a qualified professional for your situation.

What you’ll learn

Every U.S. state except New Hampshire requires liability insurance; about half also require uninsured motorist coverage, and no-fault states typically require PIP.
Basic policies combine six coverages, each priced separately, so compare quotes line by line rather than by total price.
Liability limits written as 25/50/25 mean $25,000 per person, $50,000 per accident and $25,000 of property damage coverage; state minimums may not cover a serious crash.
Collision deductibles generally run from $250 to $1,000, and a higher deductible lowers the premium; choose one you could pay from savings.
No state requires collision or comprehensive, but lenders may require both on a financed car; average costs run about $290 and $134 a year.

Your first car insurance quote will ask you to choose among six kinds of coverage, each priced separately, before it shows a price. Work through this checklist first so the quotes you compare are actually for the same product.

Know Your State’s Minimum Requirements First

Confirm liability coverage is required where you live. Every U.S. state except New Hampshire requires drivers to buy liability insurance to drive legally. New Hampshire instead lets drivers show other proof they can pay for damage they cause, such as a bond or deposit.
Check for required extras. About half of all states require uninsured or underinsured motorist coverage. No-fault states, including Florida and New York, require personal injury protection. Maine is the only state that requires medical payments coverage.
Write down your state’s minimum limits. They vary by state, so a relative’s policy from somewhere else is not a template. Start with your state’s numbers, then decide what to add.

The Six Coverage Types on Every Quote

Most basic policies combine the same six coverages, and each is priced on its own, so you can adjust them one at a time.

Bodily injury liability. Pays for injuries or deaths that you or another covered driver cause while driving your car. This is what covers other people’s medical bills when you are at fault.
Property damage liability. Pays to repair or replace property you damage, usually another car, but also fences, utility poles and buildings.
Medical payments or personal injury protection (PIP). Pays medical bills for you and your passengers. At its broadest, PIP can also cover lost wages and funeral costs.
Uninsured and underinsured motorist coverage. Pays your medical bills and car repairs when the at-fault driver has little or no insurance, including after a hit-and-run.
Collision. Pays for damage to your car from hitting another car or an object such as a tree or guardrail, from flipping over, and from potholes. It does not cover mechanical failure or normal wear and tear. Average cost: about $290 a year.
Comprehensive. Pays for theft and damage from events other than collisions, including fire, vandalism, glass breakage, weather and animal strikes. A crash with a deer falls here, not under collision. Average cost: a little over $134 a year.

No state requires collision or comprehensive, but a lender may require both on a financed car. Nearly four out of five drivers buy them anyway.

Liability Limits: Why Cheap Can Cost You

Read the three numbers. Liability limits are often written as shorthand such as 25/50/25: $25,000 of bodily injury coverage per person, $50,000 per accident, and $25,000 of property damage coverage per accident.
Consider limits above the minimum. State minimums may not cover the full cost of a serious crash, and a driver at fault can be sued for a large sum. A common recommendation is to buy more than the minimum to protect savings.
Match limits before comparing prices. Because each coverage is priced separately, two policies with similar totals can carry very different limits.

Try it

The cheapest quote is often the one with the thinnest limits. Compare identical coverage choices before judging prices.

Choosing a Deductible You Can Actually Pay

Know the usual range. Collision deductibles generally run from $250 to $1,000, and the higher the deductible, the lower the premium.
Pick a number you could pay tomorrow. The insurer subtracts the deductible from any repair payout, so the money has to come from somewhere. Our guide to building an emergency fund covers how to set that cash aside.
Do the math on an older car. If your car is worth little, compare the yearly premium plus the deductible against its value. Paying more to insure it than it is worth may not make economic sense.
If you are not at fault, your insurer may recover what it paid from the other driver’s insurer, and if it succeeds, your deductible is reimbursed too.

Information to Have Ready Before You Quote

Car details. Make, model, year, vehicle identification number, and whether you own the car or finance it. Financing changes what coverage you must carry; our walkthrough of financing a first car explains the lender’s role.
Your coverage decisions in writing. Your state’s minimum limits, the liability limits you want, and the deductible you could pay from savings.
Everyone who will drive the car. You and family members listed on the policy are covered when driving other people’s cars with permission, and the insurer will base the price on who drives yours.
Your current policy, if you have one. Most auto policies run six months to a year. Check the renewal date and set any new policy to start without a gap in coverage.
Your other policies. If you rent, check that your belongings are covered too; our explainer on what renters insurance covers is a starting point.
The discount list. Availability varies by state and company, so ask each insurer which discounts apply to you.

Red Flags and Questions Before You Buy

A price far below the others. Check the limits and deductibles line by line before calling it a bargain.
The uninsured motorist waiver. In many states, insurers must offer this coverage and you can sign a waiver to drop or reduce it. It pays your own bills when the other driver cannot.
What “full coverage” includes. Sellers use the phrase loosely, so ask which coverages a policy carries and at what limits.
Optional extras. Policies can carry add-ons such as gap insurance. Ask what each one does before adding it.
The term and renewal date. Confirm whether the policy runs six months or a year so coverage never lapses.

Common questions

Do I have to buy collision and comprehensive coverage?

No state requires either one, but if you finance the car, your lender may require both. For an older car worth little, compare the yearly premium plus the deductible against the car’s value before deciding.

What does 25/50/25 mean on a quote?

It is shorthand for liability limits: $25,000 of bodily injury coverage per person, $50,000 of bodily injury coverage per accident, and $25,000 of property damage coverage per accident.

Can I skip uninsured motorist coverage?

In many states, insurers must offer it and you can sign a waiver to drop or reduce it. It pays your own medical bills and repairs when the at-fault driver has little or no insurance, so read any waiver carefully before signing.

How long does a car insurance policy last?

Most auto policies run six months to a year. Note the renewal date and set any new policy to start without a gap in coverage.