Finance Basics: How to Compare Insurance Quotes

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When you’re looking for new insurance products, the first step you take is typically requesting quotes from suitable insurers to see what your policy might contain and cost. Comparing insurance quotes requires a bit of know-how, though. Otherwise, you might overlook a critical detail by mistake. Here’s a look at how to compare insurance quotes the right way.

Why Is It Important to Compare Insurance Quotes?

Insurance quotes are essentially estimates of the cost of insurance from that provider based on the information you provide when applying. By getting quotes from several insurers, you can find a policy that meets your needs and comes with the best possible price.

Ultimately, every insurer is unique, so the details in insurance quotes may vary. You may find different coverage levels, features present in some estimates that aren’t in others, and other discrepancies between the policies.

Additionally, costs can run the gamut. For example, while the average car insurance premium is $1,553 per year according to U.S. News & World Report, that doesn’t mean a statistically average driver would get that specific amount quoted from every insurance company they contact for quotes. Instead, some may be hundreds of dollars higher or lower, depending on how the insurer calculates premiums.

By comparing insurance quotes, you ensure that the policy you select meets your needs while securing the best possible price for that coverage. As a result, a comparison is essential.

Insurance Quote Factors to Compare

When you’re comparing insurance quotes, you need to examine a range of factors. Usually, it’s best to start with the features of the policy and not the estimated price. The main reason for using that strategy is it allows you to determine if specific quotes include services or features that others don’t, allowing you to accurately assess the value you receive by choosing one insurer over another.

While the exact points you need to compare vary depending on the type of insurance you’re after, start with coverage levels or limits. Those usually dictate the maximum an insurer will pay for a related incident. For example, with auto insurance, the liability coverage amount shows the highest amount the insurance company will provide to address damage you cause during an accident.

Along the way, see if all of the quotes contain the same clauses for coverage. Not all policies handle the same types of incidents. For instance, some dental insurance policies will include orthodontic coverage, while others won’t. By seeing how the policies stand apart in relation to the coverage offered, you can more easily assess the overall value they provide.

After that, examine the price factors. Usually, that includes out-of-pocket expenses like premiums, deductibles, copays, and similar costs you’ll shoulder if you purchase the policy.

How to Make Your Decision

Generally, you can identify the right insurance policy for you through the comparison. However, it’s also wise to consider points not present in the quotes themselves. For example, factor in the insurer’s reputation when it comes to customer service and ease of use. In some cases, a discount policy that’s a hassle to use isn’t worth the savings, as you’ll struggle to get what’s owed if you need to file claims.

Ultimately, by examining the policy details, associated prices, and insurer’s reputation, you’ll typically find out all you need to know. Then, you can choose a policy with confidence.