This Is the First Step to Getting the Right Car Insurance Coverage, According to Dave Ramsey

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  • There are several steps involved in buying car insurance.
  • Dave Ramsey says the first step is to gather documents.
  • This can help ensure quotes are accurate and the right coverage is obtained.

Buying car insurance? Here's what Dave Ramsey says must be done ASAP.

The process of buying car insurance requires following a few steps in order. That's because drivers need to make sure they get the right type of coverage to protect their assets and that they pay a fair price for the policy.

For those who aren't sure where to start, finance expert Dave Ramsey has provided tips on taking the first step. This step will set motorists up for success throughout the entire insurance purchasing process.

Here's what Ramsey says is the first key step

Ramsey's recommended first step may surprise drivers who are assuming the first thing they should do is start looking into car insurance companies. But there's actually something Ramsey says to do before that.

"Before you do anything else, round up the information every car insurance company is going to need before they can quote you a rate," Ramsey said. This will make it easier for drivers to get accurate insurance quotes.

The information Ramsey says drivers need to have on hand includes both personal details as well as details about the vehicle that will be insured. Some of the crucial documents include:

  • Drivers license information for all of the motorists in the household
  • The VIN number on the vehicle
  • The address where the vehicle is registered
  • Information on how the vehicle is used and how many miles it is driven each year
  • The car's current mileage
  • Information about the current insurance provider, including when the policy expires

As Ramsey explained, this information will be vital in taking the next steps involved in getting covered.

Why are these documents so important?

Finding these documents is a key step in the process of purchasing insurance because drivers need to shop around to find the best coverage -- and they need these details in order to do that.

You see, auto insurers price policies based on the risk of a claim being paid out. And to assess that risk, they want specific details about the motorists who will be covered and about the car that will be on the policy.

Providing driver's license information allows the insurer to see if there are any accidents or license points in the driver's history, which could suggest someone is a dangerous driver. And providing the vehicle's VIN number makes it easier for the insurer to assess all of the safety features a vehicle is equipped with, since crash-protection technology and vehicle components designed to prevent serious injury can reduce the risk of a large claim.

Shopping around for insurance coverage

Once motorists have gathered these documents, they can move forward with the other steps in the process of getting covered, including comparing prices and signing up for a policy that meets their needs.

Since insurance is required and shopping around for coverage should be done regularly, drivers should get started working on this first step ASAP to get the coverage they require at the best rate.

The good news is, this likely isn't as complicated as it seems. "You need one good solid hour (even less if you buy directly from an insurer)," Ramsey said. "With a little prep -- getting all your preliminary info ready, having a rough idea of what coverage you need, and determining how you want to go about getting car insurance -- you’ll be on your way as soon as you hop online or get on the phone with an agent, broker, or insurance company."

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