Hey everyone, welcome back! Today, we’re diving into an important topic that all new immigrants need to understand when they arrive in the United States: car insurance. If you’re planning to drive and own a car in the U.S., you’ll need insurance, and for those of you thinking of getting a car loan, there’s a specific type of insurance you’ll need—comprehensive car insurance.
Let’s break down what you need to know about getting car insurance in the U.S. and how to find the best deal.
Why Do You Need Car Insurance?
In the U.S., car insurance is mandatory. It’s not just something nice to have—it’s required by law, especially if you’re driving or have a loan on your car. Comprehensive coverage, which protects against accidents, theft, and other incidents, is typically a requirement when you take out a car loan. So, you’ll need to be prepared to get the right type of insurance right away.
Popular Car Insurance Companies
There are many insurance companies available in the U.S., and choosing the right one can be overwhelming. Here are some of the most popular ones:
- Geico
- Progressive
- State Farm
- Liberty Mutual
- Allstate
Each of these companies offers a variety of plans and policies to fit different needs. You’ll also find some local insurance companies specific to your state, which may sometimes offer competitive rates.
The First Step: Shopping for Insurance
When you first arrive in the U.S., it’s a good idea to shop around online for car insurance. Most insurance companies allow you to get a quote online, which tells you how much you’ll pay monthly for coverage based on the information you provide.
However, there’s an important catch to be aware of if you’re a new immigrant without a Social Security Number and U.S. driver’s license.
The Kicker: No License? You’ll Pay More
If you don’t have a U.S. driver’s license, you might find it challenging to get car insurance from some of the larger companies. When I arrived in the U.S. three years ago, I went to State Farm and a local insurer, Kentucky Farm Bureau, but they both turned me down because I didn’t have a U.S. driver’s license.
However, I was able to get quotes from Geico and Progressive, but there was a downside—my insurance premiums were sky-high! My quotes were around $450 to $470 per month because I didn’t have a U.S. license. These rates were much higher than normal, as standard insurance typically ranges from $100 to $300 per month, depending on factors like your driving history and the car model.
Once You Get Your License
Once I got my U.S. driver’s license, my rates dropped dramatically. For instance, my insurance with Geico went from $450 per month to around $250. But I was still able to save by switching to a local insurer, Kentucky Farm Bureau, which offered me a lower rate of about $150 per month.
It’s important to note that, in most cases, insurance companies can adjust your rates once you get your U.S. license, but the reduction might not be as drastic as you’d like. To avoid overpaying, it’s a good idea to compare rates from different companies after you receive your license.
The Insurance Process: A Few Important Tips
- Cancel Your Old Insurance: If you’re switching insurance companies, make sure there is no gap in your coverage. For example, when I switched from Geico to Kentucky Farm Bureau, I called Geico to cancel my policy at midnight the day my new insurance kicked in to avoid any lapses.
- Bundling: One way to save on your premiums is by bundling your car insurance with other types of insurance, like home insurance or renter’s insurance. Many insurers offer discounts for bundling policies, which could save you a few dollars each month.
- Paying in Full: If you have the means to do so, consider paying for your car insurance in full for 6 months or a year. Some insurers offer discounts for paying the entire premium upfront, and this can help you save in the long run.
- Autopay: Signing up for autopay can also save you money. Many insurance companies offer a small discount for using automatic payments. It’s convenient too—no need to worry about late payments!
- Check for Lower Rates: If you’ve been in the U.S. for a while and have a clean driving record, it’s worth checking for lower rates. Insurance premiums can change, and new companies might offer better rates, so be proactive about switching if you find a better deal.
Other Key Points
- Proof of Insurance: Always have proof of your car insurance, whether digital or paper, with you when driving. You’ll need to provide it if you’re pulled over by the police.
- Car Model: Insurance rates vary by car model. Generally, newer cars or high-performance vehicles are more expensive to insure than older or more basic cars. So, if you have an older vehicle, you may not need the highest level of coverage.
- State and Location Impact: Your insurance rates may differ depending on where you live. For example, areas with a higher risk of accidents or natural disasters (like floods) may have higher premiums. Your commute distance to work can also affect your rates—if you live close to work, your insurance might be cheaper because you’ll be on the road less.
Can You Share Car Insurance with a Roommate?
Typically, you cannot share a car insurance policy with a roommate unless you both own the same vehicle. If you’re living together and sharing a car, some insurers may allow you to list both names on the policy, but this isn’t common. Always check with your insurance company to confirm their requirements.
Conclusion
In summary, getting car insurance as a new immigrant in the U.S. can seem overwhelming, but it’s manageable with the right knowledge and preparation. Start by shopping around for quotes, understand how your lack of a U.S. driver’s license affects your premiums, and take steps to reduce your costs through bundling, autopay, and comparing rates regularly.
Stay tuned for part two of this video, where we’ll dive deeper into how to apply for car insurance and explore more tips to save money on your coverage.