How you buy your car affects how you insure it
Here's a who-knew for most first-time car buyers – How you buy your car affects the kind and amount of insurance you need:
- If you buy your car with a loan from a bank, you're required to protect the lender with two types of insurance coverage (called "Collision" and "Comprehensive") in case the car is damaged, stolen or even totaled in an accident. That's in addition to state minimum liability requirements for auto insurance (see below). You'll also want to consider "gap insurance," which would pay off your car if it's totaled and its current (insured) value is less than what you owe on your loan.
- If you lease the car, you'll have similar insurance-protection requirements as if you bought it with a loan. You'll also likely have minimum maintenance requirements you must meet (like oil changes) and a cap on annual mileage that you must agree to.
- If you pay cash for your car (no loan, you own it 100% yourself), you're only required to buy the state's minimum limits.
Once you know what you have to buy, it's easier to sort out how much coverage you should buy.
Why not just buy the minimums required?
An insurance policy is made up of individual "coverages" that protect you in different ways. You don't have to buy them all. But skip or shortchange certain coverages, and you risk leaving a vulnerability in your insurance armor. Check out Auto insurance coverages and what they mean to learn more.
To drive legally in Washington and Oregon, all drivers must at least have these coverages:
| Coverage | Washington | Oregon |
| Bodily injury liability (per person) | $25,000 | $25,000 |
| Bodily injury liability (per accident) | $50,000 | $50,000 |
| Property damage liability (per accident) | $10,000 | $20,000 |
| Underinsured motorist protection (per person) | Not required | $25,000 |
| Underinsured motorist protection (per accident) | Not required | $50,000 |
| Personal injury protection (PIP) | Not required | $15,000 |
Insurance experts cringe a bit at those minimums, because they could leave you less than protected in a serious accident. Imagine you were responsible for totaling someone's new $40,000 car, yet you have only $10,000 or $20,000 in insurance. You'd be on the hook for the rest!
The right insurance company can help you get worry less, live more protection within your budget. Choose your company as carefully as you choose your car, looking at factors like price, stability, service and how you feel working with the company.
Set up your insurance before you even buy the car
You don't need to wait until you've bought your car to figure out its insurance. Get at least three quotes from different insurers on the cars you're seriously considering. Their answers might help you narrow your car choices, since seemingly similar cars can have surprisingly different costs to insure. For example, if a certain model tends to be a thief magnet or is especially expensive to repair, you'll pay more than you would for a car with a more modest loss profile.
Besides getting a heads-up on future insurance costs, you'll gain valuable insight into what kind of service you can expect from the insurance company if you later decide to become a customer.
And an added bonus? Insurers save the quotes they give you. So you'll have all your insurance mostly set up and ready to go with just a click or phone call before you drive your new beauty off the lot!
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