Auto Insurance: Compare Rates and Get Car Insurance Quotes

Auto insurance is a critical component of owning a car, a truck or another vehicle. First, it's required by law in most cases. Only Virginia and New Hampshire don't require car insurance as of early 2023, but that could change in the future.

Second, car insurance provides important protection for vehicle owners. In the event of an accident, your insurance policy helps cover losses, including damage to your vehicle. Without insurance, you could be on the hook for some big unplanned expenses—never a good thing for personal finances.

While you might know you need car insurance, the many factors to consider when shopping for a plan can seem daunting. We break down some important considerations below so you can approach auto insurance quotes comparisons with confidence.

What is a Good Credit Score for Car Insurance?

A good credit score is generally considered to be 670 or higher. The higher, the better.

What does credit score have to do with car insurance, and can you get car insurance with bad credit? The answer is that many car insurance providers check your credit as part of the process of considering you as a customer.

Auto insurance companies want to know whether you're a risk as a driver. The greater your risk factor, the more likely you might cost the insurance company money because it has to pay out if you get in an accident. Auto insurers use a variety of factors, including credit scores, to create a risk profile when determining whether to offer you insurance.

If you're too high of a risk, the company won't insure you at all. It's rare for a bad credit score to cause this all on its own. However, if you have bad credit, it could contribute to a poor risk profile, which means the insurance company charges you more for a policy.

If you don't have great credit, don't worry. Just as there are car loans for bad credit, there are options for auto insurance for bad credit. You may also find options for car insurance with no credit check.

What affects Car Insurance Rates?

Whether you're looking for car insurance for bad credit or you have good credit, it's important to understand what else might impact your car insurance rates. In addition to your credit history, the following factors can affect the cost of your car insurance:

• Age. Age is a huge factor in car insurance premium costs. Teenagers will find their insurance is much more expensive than auto insurance for older adults when all other factors are equal. Typically, insurance rates go down a bit as teens and early 20-somethings age, dipping dramatically once they're 25 years old.
• Gender. Auto insurance is slightly more expensive on average for men than women, but the difference is most notable for teenagers and young adults.
• Driving Record Another big factor in how much auto insurance costs is driving history. If you have accidents or traffic violations on your record, especially recently, your insurance is likely to be more expensive because the company considers you a higher-risk driver.
• Vehicle type Some vehicles are more expensive to insure than others. Vehicles that are considered sports cars or have powerful engines are seen as riskier, for example, and that can drive up premiums.
• Amount and Type of coverage Depending on the laws in your state and whether you own your vehicle outright, you can choose full coverage or only liability coverage. You can also choose how much liability coverage you want. More coverage equals increased premiums.

What Kind of Coverage Should I Get?

In most states, you must carry liability coverage on your vehicle. Liability coverage is what pays for someone else's damages and losses if you're at fault in an accident. You can choose how much liability coverage you want—as long as you have at least the minimum coverage required in your state.

TFor example, if your state requires $25,000/$50,000/$25,000 minimum coverage, that's:

• $25,000 of bodily injury coverage per person
• $50,000 of bodily injury total per accident
• $25,000 of property damage coverage per accident

You might choose to purchase more coverage than the minimum. For example, you could purchase coverage with limitations of $100,000/$300,000/$100,000. Increasing your liability limitations increases your premiums, or what the insurance costs.

When deciding on liability coverage, consider your budget and how many personal assets you have. Liability insurance protects your personal assets. If you have minimum coverage and someone experiences losses in an accident that's your fault and their damages exceed those limitations, they might come after you for the extra amount. If you have assets that could be at risk in such a situation, you may want extra coverage to protect them.

Another decision you need to make when purchasing car insurance is whether you want comprehensive and collision coverage. This is coverage that pays for damages to your vehicle if you're at fault in the accident or no one is at fault, such as when hail damages your car.

If you don't own your car outright—when you're still paying a monthly car loan payment—you may be required by the lender to carry comp and collision. If you do own the car outright, you don't have to carry this coverage. Balance whether you can afford to replace the car yourself with your monthly budget for car insurance when deciding whether to purchase comp and collision.

How do I Find the Best Car Insurance?

If you're not sure where you stand with risk factors that might impact your car insurance costs, do a bit of research first. You can start by understanding your credit by viewing your free credit report card. And make sure to look for discounts to get even more savings.