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Most people know they need insurance for their new car, but in the excitement of buying a vehicle they may not research it as carefully as they should. Skipping over this detail may cause financial problems almost as soon as you drive off the lot.

“You need to shop for insurance before you ever step foot on the lot to negotiate buying a car,” says Penny Gusner, consumer analyst at Insure.com. “Sure, look at cars and narrow down what exact make and model you may buy, but keep your car insurance costs in mind during this time as well.  When you have your choice of car narrowed down to a few, it’s time to shop around for insurance.”

Waiting to buy a vehicle until you’ve sorted out your insurance needs may save you hundreds of dollars because some vehicles, such as sports cars, can carry higher insurance rates. While a new vehicle payment might be affordable, you need to consider auto insurance as part of the cost. Protect yourself, your car and your finances by considering these key points from Gusner before you buy:

1. Determine how long your current car insurance will cover your newly purchased car. “If you’re replacing a vehicle on your policy, typically the same coverage will extend to your new car,” says Gusner. “It can be as short as 24 hours or as long as 14 days, so check before you buy to find out what it is rather than assuming you have coverage. Also, if you’re not replacing a car, then you may not have any coverage at all.”
2. Don’t assume the dealership will take care of the insurance paperwork for you. Not only is the staff busy, it is not its responsibility to call and add a car to your policy.  “If they look at your insurance card and let you drive off, it’s because they are assuming you checked and know that there is coverage under your current policy,” says Gusner. Keep in mind that, if you’re financing or leasing a car, the lienholder will mandate that you have not only liability insurance but also comprehensive and collision coverage,” she adds. ” So if you have liability-only coverage but need comprehensive and collision with your new car, get it added before you leave the lot – it doesn’t get automatically added for you.”
3. Understand what’s needed. When buying a car, you need to know the cost of the car, of course, but you also need to understand what coverage, limits and deductibles you must buy. For example, lienholders usually ask for deductibles that are $500 or below, say Gusner. Talk to your insurance agent.
4. Liability coverage is the basic insurance you need to drive on the roads. Most states require you to have this coverage to pay for damages or injuries to others you may be responsible for when driving your car, says Gusner.
5. Personal injury protection (PIP) PIP is required in no-fault states as part of your basic car insurance policy. It pays for your medical expenses up to its limits, regardless of fault in an accident. Again, talk to your agent. Also, make sure you know what coverage, limits and deductibles are (comprehensive and collision have deductibles you must choose) when shopping for insurance so you get the correct rate quotes, she said.
6. Gap insurance is a must if you owe more than your vehicle is worth. Cars depreciate as soon as you drive off the lot. There are many examples of car buyers having their cars totaled soon after purchase and owing thousands more than their insurance covers. “Gap insurance  pays the difference between the value of the vehicle at the time of its total loss and what you still owe on it,” says Gusner.
7. Protect yourself with collision insurance. What if you drive off the lot and are hit by another vehicle or object such as a shopping cart? Collision insurance  protects your car. That’s why lienholders require that you carry it: the car is still the asset of the lienholder, says Gusner.
8. Comprehensive insurance covers your car for weather-related damages. Live in an area often hit by tornadoes? In a flood zone? Comprehensive coverage  is a smart buy, even if you don’t experience extreme weather. It protects you in case the car is damaged by fire, theft or vandalism. Again, expect the lienholder to insist you have this coverage so the vehicle can be repaired or paid off if it is a total loss.

A great place to start is by working with your agent to help you identify the best coverage for you and your new car.

The Coalition Against Insurance Fraud estimates that fraudulent claims overall cost American consumers more than $80 billion a year1,2. The frustrating part is that policyholders also bear the costs of bogus claims – not to mention the cost of investigating and fighting their illegal activities. Subsequently, people who swindle insurance companies are harming all innocent consumers by way of higher insurance premiums. So ultimately, preventing insurance fraud may potentially help lower auto insurance premiums.

What is auto insurance fraud?

Auto insurance fraud is the second costliest white-collar crime in America. Insurance fraud ranges from usually-honest people bending the truth to organized crime rings bilking millions of dollars. Fraudulent auto insurance cases can result from:

Giving false information on an application to get insurance coverage or a lower premium

Inflating or padding an automobile claim to get a higher payment or to cover a deductible

Making a false claim of stolen or damaged property, or overstating the worth of stolen items

Staging automobile accidents that result in false injury claims

Having someone steal or burn a vehicle to collect money from car insurance, or to avoid expensive repairs 

What is Nationwide doing to prevent auto insurance fraud?

Our automobile insurance fraud prevention strategy includes:

Deterring fraud before it happens by carefully vetting the information submitted on applications

Dedicating a team – our special investigation unit – to fighting insurance fraud

Donating special tools to law enforcement agencies to help capture car thieves, and investing in additional technology to detect potentially false claims

Partnering with anti-fraud groups such as the National Insurance Crime Bureau and the Coalition Against Insurance Fraud, as well as law enforcement agencies and other groups

How you can protect yourself against car insurance fraud

Nationwide and the National Insurance Crime Bureau suggest a few simple steps to increase your insurance fraud protection:

Don’t tailgate. Criminals sometimes take advantage of tailgating to stage a collision.

Call the police to report any accident, and obtain a police report with the officer’s name – even if there’s only minor damage. This makes it harder for criminals to intentionally damage a car after the fact to try to collect a larger claim.

Use a disposable camera or camera phone to document any accident damage and the number of passengers in other vehicles.

Record the details of the accident, including names, addresses, license plate and driver’s license numbers, witnesses and anything else that may be important.

Avoid people who suddenly appear at an accident scene and try to direct you to doctors and attorneys.

Be wary of physicians who insist you file a personal injury claim after an accident, especially if you’re not hurt.

Report the accident to your insurance company as soon as possible – even if you aren’t at fault.

…And how you can help in the fight

If you know or suspect someone is committing auto insurance fraud, speak up. Contact our anonymous Fraud Helpline at (1-800-474-7633) or email us at rptfraud@nationwide.com.

Learn more about auto insurance fraud

Nationwide is a charter member of the Coalition Against Insurance Fraud, a national advocacy organization of consumer groups, public interest organizations, government agencies and insurers. For more information about insurance fraud and how to protect yourself, visit insurancefraud.org.

Don’t make price the only factor when you’re shopping. Use these auto insurance comparison tips to find the right type of coverage for your needs and your wallet.

1. Gather the relevant vehicle information

Gather basic information about yourself, your car and any other drivers you want to include on your policy, including:

Social Security number

Driver’s license number

Driving distance to work

Vehicle’s make, model, year and vehicle identification number (usually found on the dashboard near the windshield)

Prior driving violations or insurance claims you’ve had in the past five years

Copy of the declaration page from your current policy (if you have one)

2. Look for the right auto insurance coverage options

The car you drive and the way you use it have a big impact on the coverages you need. We let you customize coverage that’s right for your needs and budget. The right auto policy can cover you in worst-case scenarios and help you pay for medical expenses, loss of income and other situations as a result of an accident. Learn more about the different types of car insurance coverage.

When doing an auto insurance comparison, you should also look at available coverage limits for each type of coverage offered. Learn more about how to choose how much coverage you need.

3. Look for flexible payment options

In today’s economy, we know money can be tight. At Nationwide, you can choose whether you want to pay monthly, quarterly or semi-annually. You also can choose to pay by check, debit or credit card, through the mail, online or over the phone. We also offer paperless billing, which allows you to save money on postage by scheduling recurring automatic payments and may qualify you for our one-time Easy Pay sign-up discount.

4. Find opportunities to save

Look for discounts that lower your price as you compare car insurance rates online. At Nationwide, we offer discounts on multiple cars, good students and membership in a partner organization. We also offer members the opportunity to participate in our SmartRide program, which rewards safe driving habits. Learn more tips that can help you lower your car insurance premiums.

5. Compare auto claims services

You never know when an accident will happen. That’s why our On Your Side® Claims Service is a standard part of our policies. Enjoy worry-free claims and a written guarantee on your repairs for as long as you own or lease your car when you use an On Your Side Auto Repair Network®*.

6. Look for a company that meets your changing needs

When your life changes, your insurance needs may change as well. Life events like a change of residence or a new driver on your policy are a few of the things that can make your insurance premiums rise. That’s why we offer members a free On Your Side® Review every year to make sure your insurance is keeping up with your life. We also want to make sure you’re taking advantage of the many benefits we offer, including discounts.

Here’s more info on how rates are calculated – and what you can to keep your premiums affordable.

7. Look for a company that cares about the community

We give back to the communities where our members, associates and agents work and live. From volunteering at local food banks to donating money through the United Way, Nationwide embeds philanthropy, workplace giving and volunteerism into our culture.

8. Read customer reviews

One of the best ways to learn the truth about an insurance company is to read customer reviews. Hearing what real people have to say about the various insurance companies out there can give you additional information to use for your own auto insurance comparison.

After comparing different auto policies and figuring out which type of coverage best suits your specific needs, get a car insurance quote online today.

You may already know how auto insurance works, but do you know what the different types of car insurance are? If you’re shopping for auto coverage, knowing the different types of auto insurance and their coverages is an important step in getting the policy that’s right for you. Here are a few of the basic car insurance types, how they work and what they cover.

Liability coverage

Liability coverage is required in most US states as a legal requirement to drive a car. Liability insurance may help cover damages for injuries and property damage to others for which you become legally responsible resulting from a covered accident.

Collision insurance

Collision insurance may cover damage to your car after an accident involving another vehicle and may help to repair or replace a covered vehicle.

Comprehensive insurance

Comprehensive insurance can provide an extra level of coverage in the instance of an accident involving another vehicle. It may help pay for damage to your car due to incidents besides collisions, including vandalism, certain weather events and accidents with animals.

Uninsured motorist insurance

Uninsured motorist insurance can protect you and your car against uninsured drivers and hit-and-run accidents. This coverage is often paired with underinsured motorist insurance.

Underinsured motorist insurance

Many drivers choose to carry the minimum in liability coverage to save money, but this might not provide enough coverage. Underinsured motorist insurance can protect you in the event of an accident with a driver whose insurance is not enough to cover the costs.

Medical payments coverage

Medical costs following an accident can be very expensive. Medical payments coverage can help pay medical costs related to a covered accident, regardless of who is at fault.

Personal injury protection insurance

Personal injury protection insurance may cover certain medical expenses and loss of income resulting from a covered accident. Depending on the limits of a policy, personal injury protection could cover as much as 80% of medical and other expenses stemming from a covered accident.

Gap insurance

Car value can depreciate quickly, so an auto insurance settlement might not be enough to cover the cost of a loan. Gap insurance may help certain drivers cover the amount owed on a car loan after a total loss or theft.

Towing and labor insurance

Available if you already have comprehensive car insurance, towing and labor insurance may reimburse you for a tow and for the labor costs to repair your vehicle.

Rental reimbursement insurance

Figuring out how to get around after an accident can be expensive. Rental reimbursement insurance helps pay for a rental car if your vehicle cannot be driven after an accident.

Classic car insurance

Classic car insurance provides specialized coverage designed for the unique needs of vintage and classic car collectors. Find out if classic car insurance is right for you.

If you don’t currently have auto insurance, it’s crucial to get coverage as soon as possible. Get a free quote for the types of car insurance listed above so you’re protected from the unexpected.

When money is tight, everyone looks for ways to cut back. One temptation is to let your car insurance expire, even for a short period of time. This really isn’t a great idea, because a car insurance lapse can cause you some unexpected problems. Here are several reasons it’s important to stay protected and avoid a lapse in coverage: 

Legal requirements

Most states require some level of auto liability insurance. This is the coverage that pays for the other person’s medical needs or property damage from an accident, if you’re at fault. So if you own a car and you’ve allowed the liability insurance on it to lapse, you might be violating the law – even if the car is parked and not driven. If you drive the vehicle and cause an accident without being covered, you’ll be cited and subjected to stiff fines or worse.

Financial consequences

Driving without car insurance is risky. If you’re responsible for an accident and don’t have insurance, you may be sued to pay for the damages – and end up paying for everything, including the lawyer, out of pocket.

Insurance rate increases

After a car insurance lapse, you may find it harder to get insurance at an affordable rate. You may even have to resort to a company that specializes in risky drivers – which is almost never a good deal, since high-risk insurers charge more for their policies. 

Driving record impact

In some states, auto insurance companies are required to notify the Bureau of Motor Vehicles when you drop insurance or change companies. So once you have a lapse in car insurance, it may be noted on your driving record. In some cases, your car could even be seized or your license suspended. 

How to avoid a lapse in coverage

By now, the benefits of keeping your car insurance active should be clear. Your ultimate goal should be to keep your car insurance coverage affordable and compliant with state laws. Your best resource for keeping you insured and protected is your local agent. They are also the person to turn to if you do end up with a lapse in coverage.

Practice responsibility

Car insurance policies are cancelled for two main reasons: non-payment and driving offenses. As a vehicle owner, you are responsible for consistently paying your car insurance premium. You are also responsible for driving safely; too many tickets or accidents on your record can cause an insurer to cancel your policy, resulting in a lapse in coverage.

Discuss affordable coverage options

Talk to your insurance provider about any discounts you may be eligible for that can help keep your premiums affordable. Nationwide members can also schedule an annual On Your Side review, which assesses your current coverage and is an opportunity to adjust or update your policy based on your needs. In the event a lapse has already occurred, some providers may also be able to reinstate your lapsed insurance if the policy has only been inactive for a few days.

Learn more about how Nationwide can keep you protected as a driver, safe and in compliance with the law.

Besides your driving history and type of vehicle, your credit score can influence what you pay for auto insurance. Here are some answers to common questions about your auto insurance premiums and credit scores.

How does Nationwide come up with car insurance premiums?

Some of the rating factors that influence your auto insurance premiums include:

Age or driving experience

How your vehicle is used

Driving and claims history

Geographic location

Credit history

Make and model of your vehicle(s)

Make and model not only influences your auto insurance premiums, it can also determine what type of car insurance you need. For example, classic car insurance is specifically designed for the unique needs of those who appreciate the classics.

How does credit affect car insurance prices?

Nationwide uses a credit-based insurance score when determining premiums. Studies show that using this score helps us better predict insurance losses. In fact, 92% of all insurers now consider credit when calculating auto insurance premiums. Learn how you can save on costs by taking advantage of affordable car insurance with discounts.

How does Nationwide determine this credit-based auto insurance score?

For the credit portion of your insurance score, these are the key factors:

Payment history, including delinquencies or late payments

Length of credit history

Types of credit, such as credit cards and loans

When determining your car insurance credit score, sex, marital status, age, ethnicity, address and income are never considered.

How can my credit insurance score benefit me?

A credit-based insurance score allows insurers to quote the fairest, most appropriate rate for every customer. About half of our existing customers pay a lower premium based on their credit score.

Does a good credit score result in a good car insurance score?

It’s an apples-to-oranges comparison, so not really. Insurers don’t look at credit the same way a financial institution does. Insurers consider only information that pertains to potential losses.

How does Nationwide protect customer information?

Nationwide has many safeguards in place to ensure the confidential and responsible handling of your personal information.

The only employees who see your information are those who need it for legitimate business purposes – to provide products or services to you.

No Nationwide associate will ever view your actual credit report

How can I improve my credit score?

Visit the Federal Trade Commission for more consumer credit information and resources that explain how to improve your credit score.

What is an extraordinary life circumstance?

At Nationwide we value our customers. We have an extraordinary life circumstance process that applies in all states. If your credit information has been directly influenced by one of the following events, you may qualify for reconsideration of your premium.

Any catastrophic event declared by the federal or a state government1

Total or other loss that makes your home uninhabitable1

Divorce or dissolution of marriage

Death of a spouse, child or parent

Serious illness or injury, either to you or to an immediate family member

Temporary loss of employment for three months or more, if such loss is due to involuntary unemployment

Military deployment overseas

Identity theft

If you have any questions about credit and how it can affect your insurance rates, feel free to contact your Nationwide agent any time.

We know. Reading an insurance policy isn’t exactly like curling up with a good book. It’s a fairly complex document that tries to explain all the things you’re covered for, and what’s excluded when a loss occurs. 

Although insurance companies now provide more simplified policy information, you still need to review the document carefully to make sure you understand your insurance policy. Here’s how.

The common parts of an insurance policy include:

Insurance declarations page

The policy declarations page – often called the “dec(k) page” – is basically the first page of the policy package. This page states who is insured and the time period the policy provides coverage. It also gives the general information such as a description of what’s insured, the coverages and primary coverage limits.

Definitions

This section gives you the definitions of words and phrases you’ll see in the policy. For example: “motor vehicle” and “deductible” are two terms often found in an auto policy. Such defined words may appear in bold print throughout the policy. You can also browse Nationwide’s insurance glossary for any unclear terms you’re looking for.

Coverages

This section describes the specific insurance provided. It lists what property is covered and for what damages. For example, a boat owner’s policy may cover direct physical loss or damage to the boat and motor, portable equipment and other specified property. It can also provide liability coverage.

Exclusions

These describe the coverage limits or how coverage may be eliminated depending on how a loss occurs. Insurers may allow policyholders to buy back coverage for some exclusions for additional premium (see endorsements below). For example, earthquake coverage may be excluded for people who live in an area where earthquakes are unlikely to happen. However, if a customer would feel more comfortable with the coverage, they could buy it back.

Limits and special limits

This section explains how much the insurer pays for particular losses or types of property. So while something is covered, it may only be covered up to a specific dollar amount or for a limited percentage of the entire loss.

Conditions

This section tells you what the insurer’s responsibilities are, and what your responsibilities are as the customer. This includes how to cancel a policy, transfer of rights or duties, and payment plans. 

Duties after a loss

This area gives guidance on what to do when a loss occurs. It includes notifying your insurer as soon as practical, notifying the police if appropriate and protecting your property from further damage.

Endorsements

This area defines optional coverages available for additional premium. An insurance endorsement may change your policy so that it better fits your needs. Amendatory endorsements may also be added by the insurance company (at no extra cost) to clarify policy terms and language.