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What is an insurance quote?

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Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/truthaboutins-live/2020/03/joel-ohman.jpg

UPDATED: Sep 7, 2020

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The Truth in a Nutshell:

  • You can get auto insurance quotes in person, online, or over the phone
  • A quote is not the same as a policy. Until you sign the contract, you do not have coverage.
  • Getting multiple quotes is the best way to find the coverage you need.

Insurance Q&A: “What is an insurance quote?” Put quite simply, the insurance quotation definition is an estimate of what your rate will be. These can be very specific or just a ballpark figure.

But, what is a car insurance quote? The answer depends on where you get it, who you get it from, and most importantly, how much (or little) information you provide. Learning about quotes is the first insurance topic you need to master.

Shopping around for auto insurance and taking different car insurance companies into consideration will help you get the coverage you need at a great price. Are you ready to buy car insurance? Enter your ZIP to receive car insurance quotes today.

Don’t Quote Us On This

What is the auto insurance quote meaning? A car insurance quote is a projected rate you can expect to pay for a particular insurance policy for a certain period of time. How do I get an insurance quote?

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.

As an example, let’s look at the average annual rates for car insurance based on coverage levels.

Average Annual Auto Insurance Rates by Coverage Level
CompaniesAverage Annual Rates
for Low Coverage
Average Annual Rates
for Medium Coverage
Average Annual Rates
for High Coverage
USAA$2,404.11$2,539.87$2,667.92
Geico$3,001.91$3,213.97$3,429.14
State Farm$3,055.40$3,269.80$3,454.80
American Family$3,368.49$3,544.37$3,416.40
Nationwide$3,394.83$3,449.80$3,505.37
Progressive$3,737.13$4,018.46$4,350.96
Farmers$3,922.47$4,166.22$4,494.13
Travelers$4,223.63$4,462.02$4,619.07
Allstate$4,628.03$4,896.81$5,139.02
Liberty Mutual$5,805.75$6,058.57$6,356.04
Get Your Rates Quote Now

Wondering what is an umbrella insurance quote? It’s coverage that protects beyond the limits of existing policies. Low or liability-only coverage will cost you around $312 a month. That price will change with your specific information, like your driving record or credit history.

It’s also important to be aware of the factors your state allows to be used in determining your auto insurance rates. For example, some states allow gender to be used in car insurance.

According to the Washington Post, several states, including California, have stopped allowing gender to be used to determine rates.

Watch this video to learn what other factors are used to determine auto insurance rates.

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: What’s the difference between quote and policy in insurance?

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.

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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 in the insurance quote process 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 complete waste of time. Period.

Now that you know the car insurance quote definition, you’re ready to start comparing car insurance quotes. Just enter your ZIP to get top quotes for car insurance and find affordable car insurance rates near you.

References:

    1. https://www.washingtonpost.com/transportation/2019/02/11/gender-can-no-longer-be-used-calculate-auto-insurance-rates-california-other-states/

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