Car Insurance Quotes vs. Insurance Rates: How are They Decided?
Why are insurance quotes and rates sometimes different? Learn the difference and find out how you can help keep your rates from going up after a quote or even at renewal time.
Difference between car insurance quotes & rates
A car insurance quote is an estimate of how much your car insurance may cost from your self-reported information. It’s based on the coverage you select and information you provide during the initial car insurance quote process. A car insurance quote is not a binding contract between you and the insurance company. Think of it more like first introduction. We’re getting to know each other!
A car insurance rate comes after the quote. This is when auto insurance companies look at the information you provide and compare it to your Motor Vehicle Record (MVR) and other reports. These reports help insurance companies get a more complete picture of your driving, claims, and insurance history.
Why do insurance rates sometimes go up sometimes?
If the self-reported information in your quote is different than the information found in the insurance company’s reports, it could lead to higher rates.
Insurance rates could go up after your initial quote due to…
- Missing information: When you filled out your quote, did you mention that you were convicted of a DUI/DWI, or that you got a speeding ticket last month? These factors could cause your insurance rate to differ from your quote if you forget to mention them.
- Coverage change: Let’s say you choose to go with your state’s minimum insurance requirements during the quote process. Afterwards, you realize that you need more coverage to really feel at peace on the road. Increasing your coverage could also lead to an insurance rate increase.
- Taxes and fees: Taxes and fees vary from state to state and company to company. Some insurance companies charge a policy issue fee, others don’t. You may not see these taxes and fees in your initial quote.
Remember that a car insurance quote is essentially our best guess at your rate given the information you provide. Providing the correct information from the get-go is the best way to keep your insurance rate from increasing after your initial quote. Our guide to getting an auto insurance quote online can help you gather the right information.
How can you prevent insurance rates from increasing?
Once your policy is in place, you can help prevent your car insurance rates from going up at renewal by...
- Qualifying for more car insurance discounts: Did you buy a house or decrease your annual mileage? Maintain your policy for the last 12 months? Qualifying for more discounts could help you save up to 25% on your car insurance.
- Being a safe driver: At-fault accidents and traffic violations could impact your car insurance rate at renewal, but not always. It depends on the car insurance company, the circumstances of the accident, and your driving history.
In the end, you can’t always control the factors that impact your car insurance rate, like the car you drive and where you live. You can control other factors, though, especially when it comes to where you choose to buy car insurance. Get a free car insurance quote online or call 1-877-463-4732 today. Could be paying less for your auto insurance?
More on Quotes, Policies & Savings
- How to Compare Auto Insurance Quotes
- When & How to Update Your Policy
- What’s an Auto Insurance Down Payment?
*Insurance is underwritten or administered by members of the Direct General Group, Nashville, TN and is only offered in states where we are licensed to do business. You can find this information on our website: directgeneral.com. Discounts may only apply to certain coverages and are subject to terms and conditions and may not be available in all states or distribution channels. Price may vary depending on how you buy.