What is an insurance quote, and how do I get one?

Insurance can cost thousands of dollars a year, so finding the best price is top of mind for many homeowners and car owners. To find out how much a company might charge for coverage, you can request an insurance quote based on your personal information and property details. Knowing how to compare quotes between insurers can help you find the coverage you need without overpaying. 

What is an insurance quote?

Before you buy home or auto insurance, you can get an estimate of how much it will cost. This is known as an insurance quote. Quotes are personalized based on details about you and your home or vehicle. Insurance companies use these details to figure out your risk of filing a claim, which helps them set the final price of your policy (called your premium).

Keep in mind that the initial quote you receive may change. The insurance company must review and verify the information you provide in your insurance application before finalizing your policy cost. Still, obtaining a quote provides a general idea of what you might pay, which can help you compare prices among different companies.

What factors affect your insurance quote?

Insurance companies essentially gather information to predict whether you’ll file a claim and set your premium accordingly. The company will collect information about you, your property, your claim history, and more to determine your risk level. Higher-risk home and car owners typically pay more for coverage.

Here are common factors that impact policy costs, depending on the coverage you’re shopping for:

Factors that impact home insurance premiums

• The home’s location: Insurers assess risk based on the potential frequency and severity of claims in your area. Homeowners in regions prone to hurricanes, wildfires, or earthquakes will typically face higher costs. Local variables like proximity to the nearest fire station and the neighborhood's crime rate matter, too.

• The building itself: The age of the home, its construction materials (such as brick versus wood), and the age of the roof are all considered. Older homes and those built with less durable materials will cost more to insure.

• Claims history: If you’ve filed insurance claims in the past, or if a previous owner filed a claim on a home you now own, this can increase your policy cost.

• Deductibles: Your deductible is the amount of damage you agree to cover out of pocket in the event of a covered claim. Then, insurance kicks in to cover the rest, up to your policy limit. Choosing a higher deductible will result in a lower premium.

Factors that impact auto insurance premiums

• Your driving record: Tickets, accidents, and past claims can all contribute to increased insurance costs.

• Your vehicle: The make, model, age, and safety features of your car affect your risk profile, which in turn affects your premium. More expensive or high-performance cars tend to be more expensive to insure.

• Your location: If you live in an area with high crime or dense traffic, you’ll likely pay more in car insurance premiums.

• Coverage choices: Most states require you to have liability car insurance. A basic liability-only policy is the cheapest, but it gives you the least protection. Collision and comprehensive coverage provide broader protection — and anyone with a car loan or lease will likely be required to have them — but they will cost you more. Other optional extras, like roadside assistance, are available for an additional fee. 

• Deductibles: Your collision and comprehensive deductibles (if you have those coverage types) also factor into your car insurance costs. Just like with home coverage, choosing a higher deductible equates to a lower premium. 

Additionally, your credit history may impact your home or car insurance quote, depending on the state you live in. However, some states ban the use of credit in setting rates.

How to get an insurance quote

Because every insurance company calculates risk differently, the price you get will vary from one insurer to the next. One company might consider your home's age the most important factor, while another might not, which means you'll receive different premium estimates for the exact same coverage. That's why shopping around and getting multiple quotes is key.

Here are a few ways to do it:

• Work with an agent: Agents can work with one specific company, or they may work independently and shop around for policies from multiple companies on your behalf.

• Contact the company directly: You can get quotes directly from insurance companies by calling them or visiting their websites.

• Use a comparison tool: Several websites and apps enable you to enter your information and receive insurance quotes from multiple providers for comparison purposes.

What information do you need to get an insurance quote?

No matter which way you choose, you’ll likely be asked for details about you, anyone else who will be named on the policy, and the property you’re insuring. To get an accurate quote, be ready to provide the following:

• Personal information: The name, address, date of birth, Social Security number, driver’s license number (for auto coverage), and marital status of anyone who will be listed on the policy.

• Vehicle info: If you’re getting an auto insurance quote, you’ll need the car’s make, model, and vehicle identification number (VIN).

• Property info: If you’re getting a home insurance quote, you’ll need the year the home was built, its square footage, its construction type (like brick or wood frame), and the roof age and material.

When to get an insurance quote

A smart shopper gets insurance quotes regularly because prices are always changing. You don’t have to wait for a specific event to get one.

That said, you should definitely shop for a new quote in the following instances:

When buying a new home or car

If you’re purchasing a home or buying a new car (or even a used one), shopping for coverage is critical. Insurance is typically a requirement for getting a mortgage, car loan, or lease. Plus, car insurance is required by law in almost every state. Compare quotes from several insurers to find the best policy and price ahead of time. If you don’t secure your own insurance coverage, your lender might secure insurance on your behalf — called force-placed insurance — and it will likely end up costing more than if you bought it yourself.

Before renewing your policy

It’s a good idea to get fresh quotes at least once a year. If your policy term is almost over, shop around before your existing coverage renews. Insurance companies constantly update their pricing based on new data. You may be able to find a better price for the same coverage with another insurer. 

After major life changes

Significant life changes can alter your risk level, which affects your insurance premiums. Get new quotes after events such as:

• Moving to a new house or apartment

• Getting married or divorced

• Adding a new driver or car to your family

• Reaching retirement age

When you want to change insurers

If your current insurer raises your premium, handles a claim poorly, or doesn’t have great customer service, consider checking out other companies. You can switch insurance providers at any time, even if you’re not at the end of your policy period (though some insurers may charge a cancellation fee).

7 tips for comparing insurance quotes

When you get multiple insurance quotes, it can be easy to default to the cheapest one. But the lowest bidder might not offer the best protection.

Here’s how to compare quotes from all angles:

1. Match the coverage: Make sure every quote is for the same coverage types and policy limits. For example, if you want $300,000 in liability coverage, make sure the policy reflects that amount. A cheaper quote might just mean less coverage.

2. Match the deductibles: The deductible is the amount you pay out of your own pocket before your insurance starts paying. Make sure the deductible amount is the same on all your quotes. Higher-deductible policies come with lower premiums, which can seem appealing. But keep in mind you’ll need to have this money on hand in the event of claimable damage.

3. Take advantage of discounts: Ask every company what discounts you qualify for. You might save money for things like having a security system, being a good student, or bundling (meaning buying home and auto insurance from the same company).

4. Look beyond price: A low premium might not be worth it if the company is difficult to work with. Research each company’s reputation and customer service ratings.

5. Check exclusions: An exclusion is something insurance won’t cover. Carefully read the fine print to make sure the policy doesn’t leave out coverage that’s important to you. For example, standard homeowners policies don’t cover damage caused by floods, but some insurers allow you to add a flood endorsement.

6. Use an agent or broker: If this all sounds confusing, consider speaking to an insurance agent or broker. They can help you compare policies and companies, explain the differences, and answer your questions.

7. Additional features: Think outside the box. Does one company offer great digital tools? Better roadside assistance? Faster claim payouts? These features may split the difference between two close competitors.