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What Is an Insurance Quote?

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Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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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.]

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How to Get the Best Insurance Quote?

We all want to know we’re getting the best insurance coverage at the lowest rate, but how can we be sure?

There are a number of different ways to obtain insurance, including direct from retail insurance companies, via independent agents who represent multiple companies, and through Internet insurance companies.

Below, we’ve highlighted a series of tips to help you obtain the best rate when dealing with an independent insurance agent:

1. Get online insurance quotes prior to visiting an independent agency. This will show them that you’ve done your homework and it gives you a valid starting point for the price range you should expect to pay.

2. Evaluate the agency’s appearance from the outside of the building (or their website). If they have a sign with a prominent insurer’s name listed above their own company name, take that as a sign they have some production commitments to that particular insurer.

3. Prior to providing your personal information, ask your agent for a list of all the insurers they represent who offer the type of insurance you need. At this point, the agent will likely be more honest with you, as they’ll try to impress you with the number of insurers they can offer quotes from.

4. Look around the inside of the office. Don’t be afraid to ask a question about a sign you see in the agency. If you see promotional materials from a company that offers homeowner’s insurance, be sure to ask for a quote from that company, or an explanation as to why you didn’t get one (of course, it is possible that that particular insurer doesn’t fit your needs).

5. When the agent tells you they’ve found the best policy for you, remember to ask to see all the other quotes as well. I repeat, ask to see ALL the other quotes. And if you don’t understand what you’re looking at, ask the agent. A major reason for using an agent is the fact that they can help you understand what you’re looking at.

6. After you’ve seen all the quotes, ask the agent why they think the one they picked out is the best choice. Don’t just go for the lowest rate. The agent should have tailored the policy for exactly what you want/need, so it shouldn’t be difficult explaining why it is best.

7. Finally, be sure to visit more than one insurance agent. This will definitely increase your odds of getting the best quote. If both agents say “Insurer A” is best for you, then the odds are it may be. Just be sure to follow the steps above when visiting subsequent agents.

Purchasing insurance isn’t the easiest task in the world, but if you apply the steps above in conjunction with a little bit of research, you’ll give yourself the best shot at getting the deal you deserve.

Remember, an independent agent has to balance your interests with theirs and the insurers they represent, which can leave you with the short end of the stick.

At the end of the day, your interests should come first, so make that clear when you begin shopping for an insurance quote.

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 a completely waste of time. Period.

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