What You Need to Know about Auto Insurance Quotes

Whether you’re a novice or experienced driver, your search for an auto insurance policy should always begin with a price quote. To get the best possible deal on your coverage, it’s important to know how quotes work, what insurers look at when generating them, and what you can do to access the lowest available rates.

What is an auto insurance quote?

An auto insurance quote is a best-guess estimate of how much it would cost you to insure one or more vehicles through a particular company. To generate a quote, you will need to provide the insurer with some background information about you and the car(s) you want to insure.

Each company has its own informational requirements at the initial stage, but insurers usually focus on the following basic, general factors:

Some insurance companies also ask for additional information at the outset, related to things like:

The more information a company collects from you at the outset, the more accurate your quote will be.

Factors that affect your quote

Beyond your personal details and information about your vehicle, residence, credit rating, occupation, and driving history, quotes also depend on the preferred structural features and characteristics of your policy. This includes such factors as:

Some other factors apply, such as how you use your vehicle (personal or business), your previous claims history, and how many miles you drive in an average year.

In some cases, insurance companies also consider how long you have been a customer of your current or previous insurer, and whether or not you have any gaps in the continuity of your auto insurance coverage.

How to get a quote

There are several different ways to request an auto insurance quote:

Online quotes are becoming more and more popular since they make shopping for insurance quick and efficient. However, keep in mind that a growing number of insurance companies and aggregator sites only complete your quote request once you enter your contact information. If you do not finalize your purchase right away, you may then receive solicitations by email and/or phone, which some people prefer not to get.

Are quotes always accurate?

Auto insurance quotes are, by definition, estimates. They can be highly accurate, or they can change significantly, depending on how much information the provider asks you for up-front. More importantly, quotes also depend on how detailed, accurate, and honest you are when answering the initial questions.

In general, the more questions a provider asks you, the more accurate the quote will be. The opposite is also true: providers that only collect bare-bones basic details create wide latitude for pricing disparities.

You should not treat a quote as a firm, final price. Instead, think of it as a “best guess” as to how much the provider will charge for the policy you’ve requested.

To make the process faster and easier, you should have the following information on hand when you begin your quote request:

You should also have this information available for every other person who will be named on the policy.

Does requesting a quote affect your credit score?

Some insurers take your credit score into account when calculating your quote. This requires them to request information from credit reporting bureaus, and you may be worried that this can negatively impact your score.

Your credit rating only goes down (temporarily) if an inquiry requires a “hard pull” of your credit data. This usually happens when you apply for a bank loan or mortgage. Auto insurance providers do a less stringent check known as a “soft pull,” which will not have any effect on your score, temporary or otherwise.

Ways to lower your quote

If qualifying for the lowest possible rate is your top priority, there are a few strategies you can use:

Keep in mind that for every action, there is an equal and opposite reaction. Scaling back the scope of your coverage leaves you exposed to financial risks, as does lowering your coverage limit or raising your deductible. When it comes to auto insurance, the bottom line tells only part of the story, so keep this in mind as you shop around.

Happy hunting!