When should I get car insurance?

In almost every state, you are required to get car insurance before driving any vehicle. Use the free tool below to compare car insurance rates from different companies and decide which plan works best for you.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jun 29, 2020

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Here's what you need to know...

  • In almost every state in the U.S., you are required to have car insurance or proof of financial responsibility
  • Liability insurance is the minimum required insurance, but you may want to purchase additional coverage
  • You can purchase car insurance online, over the phone, or in an actual insurance company’s local office

Perhaps you are already aware of the laws in your state requiring you to carry auto insurance on any registered vehicle that you own, but maybe you aren’t.

You must buy car insurance before you get into any car to drive.

If you purchase your vehicle from a car lot, you will not be allowed to finish your transaction until you have car insurance in place. Additionally, if you finance your vehicle, you will be unable to get final approval for your loan until you provide proof of insurance.

If you make the purchase and drive away in the vehicle without buying car insurance, then you are breaking the law, even if you are just driving the vehicle home!

If you have insurance on another vehicle, then that insurance policy should cover you driving your newly purchased vehicle until you register the vehicle.

These days there is no excuse for not having car insurance as soon as you need it. You can add a vehicle to an existing policy with one phone call. You can buy brand new insurance in less than 20 minutes by using a quote tool to find a low priced insurance option.

Enter your zip code to compare online car insurance rates now!

What Kind of Insurance to Buy


If you live in a state that requires you to have insurance before you get your driver’s license, then you want to purchase liability only insurance, as this is the most affordable option.

You don’t need to purchase higher levels of liability insurance if you don’t have a car! Buy the lowest that your state requires and don’t make any changes to your insurance until you actually have a car to drive.

If the car you buy is a fixer upper or simply an older vehicle, then you can get away with liability only insurance or whatever your state’s minimums happen to be.

You may want to consider purchasing a little more than the basic liability to ensure that you have enough insurance to cover a severe accident, but that is the most you need to think about.

If, however, the car you purchase is a newer one and has a high market value, then you will want to consider collision coverage. Interestingly, many people think that when they purchase comprehensive insurance that they have collision coverage.

The truth is that collision and comprehensive are two different types of coverage.

If you have a limited budget and a high-value car, then you can skip the comprehensive and buy liability and collision coverage only.

  • Liability insurance – protects other drivers from accidents that you cause
  • Collision insurance – pays for the damages to your vehicle in an accident that you cause, a hit and run accident, or a single car accident
  • Comprehensive insurance – covers the cost of theft, vandalism or damage to your vehicle due to acts of nature.

If you are buying your vehicle from a car lot, then you need to figure in the cost of full insurance coverage into your budget.

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How Much Insurance to Buy

First of all, you have to purchase the amount of insurance required by your state. In most

In most states, you will have to buy a certain amount of liability insurance.

In no-fault states, you will probably have to purchase underinsured/uninsured motorist coverage as well as medical coverage.

In no-fault states it doesn’t matter who causes an accident; your personal insurance will cover the cost of an accident.

If you have serious injuries, you can make a claim with the other person’s insurance company to cover the cost of injuries your own insurance doesn’t cover.

When it comes to comprehensive and collision coverage, you only need to carry enough coverage to cover the Kelly Blue Book value of your vehicle.

Where to Buy Insurance


You can purchase car insurance from any insurance company licensed to sell auto insurance in your state.

You can use your state’s Department of Insurance website to find out which insurance companies are licensed to sell insurance in your state.

However, there is a much easier way to find car insurance companies to buy insurance from and that is through our free quote tool.

A free quote tool allows you to compare the rates of several different companies in a single place.

Enter your zip code now to get your car insurance quotes today!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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