Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

Full Bio →

Written by

UPDATED: Jul 14, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.

Here's what you need to know...

  • It is important for every driver in the U.S. to purchase car insurance
  • There are multiple car insurance providers to choose from, so be sure to compare car insurance rates
  • In order to receive auto insurance quickly, have all the necessary information that a company will need to know ready when you call

Auto insurance is mandatory in most states in the U.S. While every driver must carry auto insurance, not every driver will go about obtaining insurance the same way.

If you need car insurance coverage quickly, read the information below before you start your search for coverage.

Then, start searching for the perfect coverage using our FREE comparison tool above!

Obtaining Car Insurance

As you acquire any type of insurance, you must realize that insurance is a contract between you, the insured, and the company, the insurer to provide benefit to both parties. A contract involves the following steps:

  • Your offer to the insurer to purchase insurance
  • The insurer’s offer to provide insurance in the form of a quotation or bid
  • Your consideration offered in the form of premium payment
  • Insurer’s consideration in the form of protection if the insurance is used
  • The amount of time involved in this process depends on the availability and processing of information by both parties to the contract

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

 Secured with SHA-256 Encryption

Your Offer to Purchase Insurance

 

This offer comes in the form of a completed application. Information that car insurance companies often require includes:

  • Names, dates of birth, and driver’s license numbers for all individuals using the vehicles
  • Complete description of the vehicles, including VIN numbers for the vehicles involved
  • Driving experience, including accidents and citations for all drivers
  • Place of residence for drivers and garaging information
  • Normal usage of vehicles, i.e., commuting to work, pleasure only, commuting to school, and distance of commute
  • Limits of liability desired as well as physical damage coverage needed

The Insurer’s Offer to Provide Insurance

The insurer uses the information you provide to them as a basis for a quotation, or bid. The insurer will provide the following:

  • Agreement, or not, to provide insurance under an automobile policy
  • Broad terms of that policy
  • Limits of liability
  • Physical damage coverage
  • Drivers covered
  • Estimated premium due at beginning of the policy

Legal Capacity of the Applicant and Insurer

In order to have a binding or legal offer, both parties to the contract must have the legal capacity to form a contract. Essentially, this means that neither party can be a minor or mentally ill.

Additionally, insurers must have the capacity to operate in the jurisdiction in which they are selling insurance.

To determine whether an insurance company has a license to sell coverage in your state, check with your State’s insurance department.

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

 Secured with SHA-256 Encryption

Insurance Policies are Indemnity Contracts

This means that the parties are prohibited from collecting more than the actual amount of the loss. Because of this, you cannot recover more than the amount the vehicle is worth. In addition, your liability coverage is limited both to actual injury and damage subject to the limits of the policy.

If someone sues you for more than the amount covered under your liability, you may be required to contribute to attorney’s fees and court costs as well as the amount awarded.

Acceptance of the Insurance Contract

Both the applicant and the insurer must signify that they have agreed to the insurance contract.

You, as the insured party, accept the contract by providing a premium in the amount agreed.

The Insurer issues a valid insurance policy with identification cards, a policy number, and a statement of coverage. This agreement or contract remains in effect as long as both parties agree to it.

Considerations upon Purchasing Car Insurance

 

There are a number of things in addition to price that you should consider when purchasing car insurance. Some of these are:

  • When purchasing personal injury and personal liability coverage, take into consideration that you may be responsible for your own or others medical insurance in a major accident.
  • Judge what the lack of your vehicle will do to your job and other transportation in an accident that totals it.
  • Think ahead and try to purchase the optimal coverage for all your needs.

It takes a relatively short time to acquire car insurance, particularly if you need to replace a policy that was in good standing, but a new policy can take a while.

Adding or replacing a vehicle on an existing policy is usually a matter of notifying the insurance company and providing the Vehicle Identification Number and drivers information for that vehicle.

Do not rely on the ability of an insurance agency or company to provide immediate car insurance unless they have done business with you for a while.

Enter your zip code below to compare car insurance rates from multiple companies today!

References:

  1. http://www.investopedia.com/articles/pf/06/insurancecontracts.asp
  2. http://www.insureuonline.org/consumer_auto_ten_tips.htm
  3. http://www.autocheck.com/vehiclehistory/autocheck/en/vinbasics