A first-time driver’s guide to understanding auto insurance
Get comfortable with the terms, tradeoffs and choices that matter when buying your first policy.
Get comfortable with the terms, tradeoffs and choices that matter when buying your first policy. The key is to consider your own needs and check the actual policy terms.
Learn the essential language
Your premium is what you pay for a policy. A deductible is what you may owe toward certain covered losses. A coverage limit is the maximum the policy may pay for a particular claim type, subject to terms. An exclusion describes a situation or loss the policy does not cover.
Start with state requirements
Minimum insurance requirements are different across the United States. Use your state's insurance department to understand the rules where you register your car. If you lease or finance your car, your lender may require additional coverage.
Think about what you can afford to lose
The lowest legal limits may leave you exposed in a costly crash. Consider your savings, driving exposure and other financial responsibilities when choosing liability limits. If your vehicle would be difficult to repair or replace out of pocket, explore collision and comprehensive options.
Shop carefully and ask questions
Provide consistent, accurate information on each application. Ask which discounts are available for education, mileage or household policies. Make sure you know when coverage begins and how to access proof of insurance.
For a deeper look, see the National Association of Insurance Commissioners' consumer auto guide ↗. State-specific rules and coverage terms may differ.
Shop with a little more confidence.
Explore available rate-shopping options with a third-party partner. Coverage and prices are not guaranteed.
Explore Your Options ↗A little more road wisdom.
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