Why is My Premium Different Than My Quote?

Savvy shoppers often shop around for the best deals. When it comes to car insurance, it isn’t unusual to get a quote from a few companies to make sure you get the best rate possible. While a quote is a pretty good indicator of what your premium might be—the amount you pay to an insurance company each month—they don’t always match.

At SafeAuto, we do our best to provide consumers with the most accurate price estimate we can. There’s nothing more frustrating than discovering your premium costs more than your original quote.

So, what is the difference between a quote and a premium?

What is an insurance premium

Quote vs. Premium

In order to understand why these values may be different, it helps to know how they’re defined. When it comes to auto insurance quotes, people usually recognize that a quote is a price you could pay, if you use a company’s insurance. A quote is basically an estimate of your rate, calculated with the information you provide. This number isn’t a price match guarantee, instead, your quote gives you an idea of what your insurance might cost.

Then what is an insurance premium? A premium is an amount you pay each month to your insurance company in exchange for coverage. While a quote is an estimate, a premium is the real, calculated cost. Just like a quote, a lot of factors go into determining this number. Your driving history, the type of coverage you want, and where you drive are just a few of the things we use to determine your premium.

 The truth is, there are many factors that go into determining both numbers. Sometimes, we discover new information about a potential new customer that can change those factors. Here are three reasons why your insurance quote and your premium may not match.

Three reasons your premium and quote don’t match

You might be thinking that it sounds like the same personal information is used to determine your quote and your premium, so why would the numbers be any different? Well, you’re right about that—the factors we use are in many cases the same.

Even so, completely accurate insurance quotes are hard to come by because human error can lead to a few discrepancies:  

1. Your car info was wrong – oops!

We spend a lot of time in our cars, so much time that we might be certain we know everything about our vehicles. Honestly, there’s a lot to remember and sometimes we get it wrong. We see it all the time: the model of the car may not be what the owner listed, it might not be a four-wheel-drive like a driver thought, the engine size is off, etc. We have no way of verifying that all of the car information is correct until we run the Vehicle Identification Number (VIN). At that point, we may discover a few of the details weren’t quite right. That’s okay—it happens.

2. Accident history isn’t reported.

Before we tell you what your premium will be, we need to look at your accident history. It’s not uncommon for a person to forget about a fender bender or think that an accident has dropped off their record before it has. When we receive this report, discoveries can be made that don’t match the original quote. Often, it will lead to a change in the premium amount.

3. Your car’s past life.

In some states, insurance companies can request a report on your car. While you may have a perfect driving record, your vehicle might not be squeaky clean. A used car has a past, and that past may include a few hiccups. Cars that have been in more accidents are more likely to get in them again. This may be because they’ve suffered past damage. Whatever the reason, it can change the cost of your premium.

Each thing you tell an insurance company about yourself affects how much—and how accurate—your quote will be. The best way to get a clear estimate is to use the most correct information you can. This helps eliminate errors that may make your quote appear higher or lower than your premium rate would be. At SafeAuto, we will continue to do our best to provide everyone with the best quote we can offer. After all, when you’re happy, we’re happy!