Insurance Estimate for Your New Car: How to Get it Accurate

Insurance Estimate for Your New Car – Buying a new car is an exciting and rewarding experience, but it also comes with some additional costs that you need to consider. One of these costs is car insurance, which can vary widely depending on the vehicle you choose, your personal information, and the coverage you need.

In this article, we will explain how to get an accurate insurance estimate for your new car, so you can budget accordingly and avoid any unpleasant surprises.

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Why do you need car insurance?

Car insurance is a legal requirement in most states, and it protects you from financial losses in case of an accident or theft. Car insurance can cover the following:

Liability

This pays for the damages and injuries you cause to other people or their property in an at-fault accident. Liability coverage is mandatory in most states, and it has two components: bodily injury liability and property damage liability. Each state has a minimum amount of liability coverage that you must carry, but you can choose higher limits if you want more protection.

Collision

This pays for the repairs or replacement of your own car if it is damaged in an accident with another vehicle or object. Collision coverage is optional, but it is usually required by lenders if you finance or lease your new car.

Comprehensive

This pays for the repairs or replacement of your own car if it is damaged by something other than a collision, such as fire, vandalism, flood, hail, or theft. Comprehensive coverage is also optional, but it may be required by lenders as well.

Uninsured/underinsured motorist

This pays for your damages and injuries if you are involved in an accident with a driver who has no insurance or does not enough insurance to cover your losses. Uninsured/underinsured motorist coverage is optional in some states, but mandatory in others.

Medical payments/personal injury protection

This pays for your medical expenses and lost wages if you or your passengers are injured in an accident, regardless of who is at fault. Medical payments/personal injury protection coverage is optional in some states, but mandatory in others.

How to estimate car insurance costs

There are several ways to estimate car insurance costs before buying a new car. Here are some of the most common methods:

Use online car insurance calculators

Many car insurance companies and websites offer online tools that allow you to enter some basic information about yourself and the car you want to buy, and get an estimate of how much your car insurance will cost. For example, you can use NerdWallet’s car insurance estimator to see how much full coverage may cost in your area. Online car insurance calculators are easy and convenient to use, but they may not be very accurate, as they do not take into account all the factors that affect your car insurance rate.

Get quotes from several insurers

The best way to get an accurate insurance estimate for your new car is to get quotes from several insurers. You can do this online, by phone, or by visiting an agent. You will need to provide more detailed information about yourself and the car you want to buy, such as your age, driving record, location, vehicle make and model, mileage, safety features, etc. You will also need to choose the coverage types and limits that you want. Getting quotes from several insurers will allow you to compare prices and find the best deal for your new car.

Use an online car insurance comparison tool

Another way to get an accurate insurance estimate for your new car is to use an online car insurance comparison tool. This is a service that aggregates quotes from multiple insurers based on your information and preferences. You can use GEICO’s coverage calculator to find out how much coverage you need and get personalized quotes from different insurers. Online car insurance comparison tools are fast and convenient to use, but they may not include all the insurers in your area or all the discounts that you may qualify for.

Factors that affect the cost of car insurance

The cost of car insurance depends on many factors, some of which are related to the car you buy, and some of which are related to you as a driver. Here are some of the most important factors that affect the cost of car insurance:

The car you buy

The type of car you buy has a significant impact on your car insurance rate. Some cars are more expensive to insure than others because they are more likely to be stolen, vandalized, or involved in accidents; they have higher repair or replacement costs; or they have lower safety ratings. For example, sports cars, luxury cars, electric cars, and SUVs tend to have higher insurance rates than sedans, hatchbacks, hybrids, and minivans.

Your personal information

Your personal information also affects your car insurance rate. Some of the factors that insurers consider are your age, gender, marital status, credit score, occupation, education, and homeownership. For example, young drivers, male drivers, single drivers, drivers with poor credit, drivers with high-risk occupations, and drivers who rent their homes tend to have higher insurance rates than older drivers, female drivers, married drivers, drivers with good credit, drivers with low-risk occupations, and drivers who own their homes.

Your driving record

Your driving record is one of the most important factors that affect your car insurance rate. Insurers look at your history of accidents, tickets, claims, and violations to determine how risky you are as a driver. The more incidents you have on your record, the higher your insurance rate will be. For example, drivers who have been involved in at-fault accidents, received speeding tickets, filed claims, or been convicted of DUIs tend to have higher insurance rates than drivers who have clean records.

Your location

Your location also affects your car insurance rate. Insurers consider the state, city, and neighborhood where you live and drive to determine how likely you are to encounter traffic, crime, weather, or natural disasters that could damage your car or cause an accident. The more risky your location is, the higher your insurance rate will be. For example, drivers who live and drive in urban areas, high-crime areas, or areas prone to floods or earthquakes tend to have higher insurance rates than drivers who live and drive in rural areas, low-crime areas, or areas with mild weather.

Your coverage

Your coverage is another factor that affects your car insurance rate. The more coverage you choose, the higher your insurance rate will be. This includes the types of coverage that you select (such as liability, collision, comprehensive, etc.), the limits of coverage that you choose (such as $50,000/$100,000 for bodily injury liability), and the deductibles that you set (such as $500 for collision). You should choose the coverage that meets your needs and budget, but also consider the minimum requirements of your state and lender.

How much car insurance do you need?

The amount of car insurance that you need depends on several factors, such as your state’s laws, your lender’s requirements, your personal assets and income, and your risk tolerance. Here are some general guidelines to help you decide how much car insurance you need:

Liability coverage

You should always carry at least the minimum amount of liability coverage that your state requires. However, this may not be enough to protect you from lawsuits if you cause a serious accident that results in high medical bills or property damage. To avoid this scenario, you should consider carrying higher limits of liability coverage that match your net worth or income. A common recommendation is to carry $100,000 per person $300,000 per accident for bodily injury liability and $50,000 for property damage liability.

Collision and comprehensive coverage

You should carry collision and comprehensive coverage if your car is new or valuable. These coverages will pay for the repairs or replacement of your car if it is damaged or stolen. However, if your car is old or has a low market value, you may want to skip these coverages or drop them when they are no longer worth the cost. A common rule of thumb is to drop collision and comprehensive coverage when the annual premium exceeds 10% of the car’s value.

Uninsured/underinsured motorist coverage

You should carry uninsured/underinsured motorist coverage if you want to protect yourself from drivers who have no insurance or do not have enough insurance to cover your losses. This coverage is especially important if you live in a state with a high percentage of uninsured drivers or if you have high medical expenses or income that could be affected by an accident.

Medical payments/personal injury protection coverage

You should carry medical payments/personal injury protection coverage if you want to cover your medical expenses and lost wages if you or your passengers are injured in an accident. This coverage is especially important if you do not have health insurance or if you have a high deductible or co-pay on your health plan.

Why some cars cost more to insure

Some cars cost more to insure than others because they pose a higher risk for insurers. Insurers use various data and statistics to determine how likely a car is to be involved in an accident or theft; how expensive it is to repair or replace; and how safe it is for the driver and passengers. Some of the factors that insurers consider are:

• Vehicle make and model: Some vehicle makes and models are more popular among thieves than others; some have higher repair costs than others; and some have better safety ratings than others. For example,
  • According to the National Insurance Crime Bureau (NICB), the most stolen vehicles in 2020 were the Ford F-Series pickup truck; the Honda Civic; the Chevrolet Silverado pickup truck; the Honda Accord; the Toyota Camry; the Nissan Altima; the GMC Sierra pickup truck; and the Toyota Corolla. These vehicles are more likely to be stolen than others because they are common, easy to break into or have high demand for parts. Therefore, they have higher insurance rates than less stolen vehicles. – According to CarMD, the most expensive vehicles to repair in 2020 were the BMW 5 Series; the Mercedes-Benz E-Class; the Audi A4; the BMW X5; the Land Rover Range Rover Sport; and the Audi Q5. These vehicles are more expensive to repair than others because they have complex or rare parts, require specialized tools or technicians, or have high labor costs. Therefore, they have higher insurance rates than less expensive vehicles. – According to the Insurance Institute for Highway Safety (IIHS), the safest vehicles in 2020 were the Honda Insight; the Mazda 3 sedan and hatchback; the Subaru Crosstrek Hybrid; the Mazda CX-5; the Mazda CX-9; and the Subaru Ascent. These vehicles are safer than others because they have advanced features such as automatic emergency braking, lane-keeping assist, blind spot monitoring, or rear cross-traffic alert. Therefore, they have lower insurance rates than less safe vehicles.

• Vehicle age and value: The age and value of a vehicle also affect its insurance rate. Generally, newer and more valuable vehicles cost more to insure than older and less valuable vehicles. This is because newer and more valuable vehicles have higher repair or replacement costs in case of an accident or theft. However, some older and less valuable vehicles may also have higher insurance rates if they have poor safety ratings, low reliability, or high theft rates.
• Vehicle performance: The performance of a vehicle also affects its insurance rate. Generally, vehicles that have higher horsepower, speed, or acceleration cost more to insure than vehicles that have lower performance. This is because high-performance vehicles are more likely to be involved in accidents, cause more damage, or attract more attention from thieves or law enforcement. However, some low-performance vehicles may also have higher insurance rates if they have poor handling, braking, or visibility.
• Vehicle usage: The usage of a vehicle also affects its insurance rate. Generally, vehicles that are driven more frequently, longer distances, or in riskier situations cost more to insure than vehicles that are driven less often, shorter distances, or in safer situations. This is because more usage increases the chances of an accident, wear and tear, or theft. For example, vehicles that are used for commuting, business, or ridesharing tend to have higher insurance rates than vehicles that are used for leisure, pleasure, or personal errands.