What Is an Insurance Quote?

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Insurance Q&A: “What is an insurance quote?”

“Call today for a quote…Click here for a quote…See your local insurance agent for a quote.”

It never ends. We are constantly pestered by ads on TV, the radio and the Internet to “get quotes” to save money on our insurance.

But, what exactly is a quote? The answer depends on where you get it, who you get it from and most importantly, how much (or little) information you provide.

Don’t Quote Us on This

An insurance quote is a projected premium you can expect to pay for a particular insurance policy for a certain period of time.

You may get a verbal quote over the phone or a written quote delivered by mail or via the Internet.  You may even see an “advertised quote” such as $19.99 per month.

All that said, it may be easier to explain things by illustrating what an insurance quote IS NOT.

An insurance quote may not be a final premium:

Your quote is typically a “ballpark” figure, meaning the price you are offered is not set in stone. Your final insurance premium may be higher or lower when it’s all said and done.

As pointed out above, the accuracy of your initial insurance quote depends on how much information you provide to the company preparing your quote.

For example, a company that only asks you to provide your age, sex and how many speeding tickets you’ve had in three years is not going to provide you with a solid insurance quote.

On the other end of the spectrum, if you provide very detailed information such as your name, social security number, insurance score, driver’s license number and vehicle VIN, you will likely wind up with a very solid reliable quote.

(Are online insurance quotes accurate?)

Generally, it is this aspect of the insurance quote process that frustrates consumers the most.  Essentially being quoted one price and paying something significantly higher once everything is said and done.

An insurance quote is not a policy:

You may obtain 10 different quotes for your insurance. But until you answer every question the insurer or agent asks, sign an application and (in most cases) make a down payment to start the policy, you don’t have any insurance.

In fact, if you look carefully, you may find a statement somewhere on a written quote that states, “This quote is provided without cost or obligation. It is not a contract or binder of coverage,” or something to that effect.

(10 ways to lower your insurance car premium)

The Good, The Bad and The Sleazy

There is no shortage of above-the-board insurers, agents and websites that can and will provide you with an accurate insurance quote.

As consumers, we simply need to be alert when shopping for insurance to avoid those offering anything less.

If something sounds too good to be true, it probably is.  Simply move on to the next insurer.

And again, if you didn’t have to provide any personal information to obtain your quote, it’s likely garbage. Period.

Read more: How to get the best insurance quote.

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