What is a quote in insurance

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 auto 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. Generally, they ask for some information about you and your driving record. The more accurate you are in what you disclose, the more accurate your quote will be.

It 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.

What else should you know about insurance quotes?

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 based on what comes up on your credit score and driving record. If you disclose all recent tickets, claims, etc., your insurance costs should be close if not exactly matched to 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, and run a CLUE and MVR report before you get your quote, 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.

Wondering what is an umbrella insurance quote? It’s coverage that protects beyond the limits of existing policies. Your primary auto policy can be adjusted to have higher rates. Some customers add an umbrella policy to raise their coverages for homeowners, auto, and other policies they want to combine under the same insurer.

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

According to the Washington Post, several states, including California, have stopped allowing gender to be used to determine 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 can you 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 first. You can get multiple quotes online in just minutes by answering a few questions. Online calculators can sort through countless companies to get you quotes from companies that make sense for you. This is true whether you have a clean driving record or one with an at fault accident or two.

2. If you want to work with an insurance agent, check out the company beforehand. Look at their online and other reviews. See what insurance companies they quote for, and ask them about any specialized coverages you’re looking for before you choose an insurance company.

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. This could include liability, comprehensive coverage, specialty parts, and much more. 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. Don’t be afraid to ask about discounts and promotions. 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. They can offer advice, but you should see what your options are firsthand. 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, don’t be afraid to switch agents or see multiple agents if you’re working with captive agents who only quote for one company. Comparing options from different companies is critical to getting the best pricing and coverage in one.

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.

What should you watch out for when shopping for insurance?

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.

Again, if you didn’t have to provide any personal information to obtain your quote, it’s likely a complete waste of time. An auto insurance policy is a mix of different coverage types, and your rates are influenced by many factors that go into your driver profile.

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:

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Before you can get an insurance policy, you first have to complete an application with an insurance company. The insurance company takes the information on your application and runs it through an algorithm that calculates what it costs to insure you. From this, the company generates an estimate for your premium. That estimate is your insurance quote.

Your quote tells you approximately what it costs for you to get a policy with that particular insurance company. Most companies send insurance quotes that include details about the policy you hope to buy. For example, a home insurance quote may list:

You’re not bound by an insurance quote. You can choose to take your business elsewhere or continue working with the company that provided the estimate.

If you do choose to buy a policy from the company that offered the quote, then the company moves forward with processing your coverage. This includes underwriting, where individuals review the details you provided on your application to make sure nothing has changed and that the premium is appropriate for your risk. Sometimes the underwriting review reveals information that changes your quote, such as a credit problem, additional hazard, or a prior claim. This is a fairly common situation and usually the difference is minimal.

For example, let’s say you thought you had an insurance claim three years ago, so you put that information on your home insurance application. You get your insurance quote and decide to move forward with buying the coverage. However, the insurance company’s underwriter discovers that the claim actually occurred four years ago. This changes how the insurance company interprets your risk and may result in a lower final premium.

The Difference Between Quote and Policy

There’s a big difference between quote and policy in insurance. In fact, the quote comes before the policy can even exist. And while a quote may include some coverage basics, it is not the actual contract. Your policy, however, is the contract that defines your coverage. Without a policy, you don’t have insurance.

Sometimes there’s a bit of a lag between when your insurance policy’s effective date and when you have your policy in hand. To bridge that gap, insurance companies often provide you with an insurance binder. Binders are temporary but enforceable coverage that you can use as proof of insurance.

How to Get an Accurate Insurance Quote

Because an insurance quote can change before you buy the policy, you want to make sure that you get as accurate of a quote as possible. That requires giving the insurance company’s representative as much information as possible and keeping it accurate and truthful.

For example, if you say that your house is made of wood on your application, then you’ll get a quote based on that. But your premium will change if underwriting finds that your house is made of bricks. This is one reason we use technology to scour public records. Not only do we end up with the most precise information available, but we’ve also managed to make insurance applications shorter and easier to complete.

How to Compare Home Insurance Quotes

Getting just one quote from one insurance company isn’t the best way to shop for insurance. You’re usually better off requesting quotes from several companies before you decide. But when you do, make sure you’re comparing more than just the cost. Coverage details can have a major impact on the value of your policy, so you also want to look at:

• Coverage limits. Your dwelling coverage limits have a direct impact on your premium. Plus, your personal property, loss of use, and other structures limits are typically percentages of your dwelling coverage, and the available percentage can vary by insurance company.
• Valuation. We use your home’s replacement cost when we determine your insurance quote. That’s usually preferable than using its actual cash value that accounts for depreciation.
• Covered perils. Some home insurance is written on an open perils basis, which means it covers any peril except those explicitly mentioned as excluded. But insurance companies can also offer named-risk policies that only cover the events listed in the contract.

These aren’t the only features to consider. You also want to pick an insurance company that offers good discounts, great service and an easy claims process. Those are things you usually find out after you get an insurance quote and buy a policy, but looking at online reviews for the best home insurance companies can help.