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If you own a vehicle and you are licensed to drive, you will always have a need for car insurance.

Buying car insurance for the first time can be intimidating, but it is essential to know what types of coverage options you can buy before you compare quotes and select the best car insurance quotation.

You can either learn when you need to file a claim, or set aside time to learn about car insurance before you even have a need for it. The ideal decision would be to learn at least the basics prior to getting price quotes so that you can build a truly protective policy that will help you during difficult times.

If you do not know the next thing about car insurance quotations, terms or requirements, now is the time to learn everything that you need to know.

This basic guide to car insurance quotations will prepare you to shop in the insurance marketplace so that you look like a seasoned consumer and feel like one as well. Read on, and get answers to the basic questions that you may have never even thought of asking.

Once you've finished, enter your zip code above for FREE car insurance quotes!

What is a car insurance quotation?

There are not typically Insurance 101 courses offered when you are attending high school, even though a majority of high school students will become licensed drivers sometime during their student career.

If you have never even talked to an insurance agent or requested policy information online, it is understandable that you do not know what a quotation is.

A quotation, which is more often called a quote in the industry, is a personalized price estimate that shows you what your rate could be if you purchased insurance through the carrier.

How do car insurance quotes differ from car insurance declarations pages?

Some may use the terms quotes, policies, and declarations pages interchangeably, but each of these terms are something entirely different.

A quote is a price estimate that lays out how much you could potentially pay for coverage if you are forthcoming with your information, all of the information is accurate, and the policy was issued with the current rates.

A declarations page, which is often mistakenly called the policy, is a document that lists all of the pertinent information about your vehicle, your household, and the listed drivers.

While this document is a policy document, the actual policy is the booklet that lists policy definitions, exclusions, and what is covered.

Why can quotes change once you submit your application for coverage?

It is easy to assume that when an agent or computer system gives you a quote that the quote will be honored for the entire term of the policy. Unfortunately, when agents and representatives give prospective clients quotes, they are not verifying or underwriting the information that you provide.

It is not until you decide to go with the company that the application is gathered and submitted to the underwriting department.

When the application is underwritten, the underwriter assigned to the file will run motor vehicle reports, credit reports, claims history reports, and prior insurance reports to see if you were honest and forthcoming.

If they find claims, violations, gaps in coverage or a poor credit-based score that does not match what was used during the quote, the rate could go up.

Rates that increase during underwriting before the policy is issued are called misquotes. This is common when clients are not prepared to give the information they are asked for. Misquotes are allowed but it is illegal for an agent to intentionally misquote you just to get your business.

Review your quotations in detail before you fill out an application and check your records and reports as you are filling out an application to prevent errors.

How many quotes should you get before you buy a policy?

There is not a distinct number of quotes that you should need to get before you decide that you are happy with what a carrier has to offer.

While there is no hard fast rule that says you must get three or five quotes, most industry experts recommend that you compare the premiums through several companies first. This is called comparison shopping and is vital when you want a value-priced plan.

Buying insurance is not at all like buying some consumer good at a retail store where prices are only a fraction of a cent different.

When you buy insurance, that company has set their own rates and could charge double what others charge for the same exact plan. By being proactive and choosing to be a wise consumer, you can identify which company has the best pricing for your risk class.

If you jump at the first quote you request, you never know how the company compares to the top-name insurers serving your zip code.

How often do you need to compare car insurance quotes?

You do not need to request car insurance quotes year-round in hopes of finding a sale on supplemental coverage options.

There are specific times and scenarios when it is best to start quoting prices in the marketplace. Obviously, the most common reason to start getting quotes is when you are buying a new car.

It is actually wise to request quotes before you even decide which car you want to buy so that you know that you can afford the insurance expense.

The next reason would be when your current insurance policy is coming up for a term renewal where the rates will be recalculated.

It is very common for companies to raise their rates while your rates are locked in which can affect your renewal invoice. If you have had a violation or claim within the term period, the renewal is when the surcharges will be added for up to 36 months.

Some companies may even non-renew your plan if you are considered to be too high of a risk. This creates a need to find a company that will offer competitive rates in your new risk class.

There are even times when you are not car shopping or preparing for a renewal that getting quotes is a good idea. If you simply are not happy with your rates, you can retrieve quotes at any time during your term and switch.

When you move or your marital status changes, you also need to get quotes with companies licensed in your state of residence.

What do I need to know about car insurance coverage options?

As you complete an auto insurance quote form, you will be asked to select how much coverage you want to carry. All policies will include liability coverage, but most other coverage options are considered optional in a majority of states.

Here is a basic description of how each coverage protects you, your family, your property or your assets:

  • Bodily Injury Liability - Provides coverage to pay for third-party medical expenses when you are negligent for a collision. It will also pay for funeral expenses and pain and suffering if you are taken to court.
  • Property Damage LiabilityProvides coverage that will pay for the repair or the replacement of any real property that you do not yourself own but that is damaged in an at-fault accident. The limit will apply to the entire incident and not to a single item that is damaged.
  • Medical Payments - The coverage will pay for the treatment and medical bills when the driver or passengers are injured in a covered car. It does not matter who is at-fault for the accident and no deductible applies.
  • Uninsured Motorist ProtectionProvides protection when you are in an accident with a driver who has chosen not to purchase liability insurance. It will pay for your medical treatment and will also kick in if the other party does not have enough liability insurance to pay for your treatment following a collision.
  • Comprehensive - Provides coverage to repair or replace your car if totaled because of a fire, theft, or vandalism. This coverage is subject to a deductible and the valuation of the vehicle will always be based on the fair market value.
  • Collision - Provides coverage for the listed vehicle when it is damaged in a collision with another object. Like comprehensive, there is a deductible that generally must be paid when you are at-fault for the damage.

Now that you know more about car insurance quotes and coverage options, it is time to start comparing quotes.

To ensure your quotes are accurate, know your driver license number, dates of tickets or accidents, the VIN of the vehicles, how they are used, and how long all drivers in the home have been licensed.

Once you are ready, visit an online rate comparison tool and start entering the details. When you are finished, you will be directed to a page that shows you how much various companies will charge you for coverage.

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