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Comparing Car Insurance: Quotes vs. Rates vs. Guesstimates

Posted : 05/17/2010

Car insurance quotes and rates. They're the same, right?

Not knowing what you're getting when you shop for car insurance quotes could mean the difference between big savings and total frustration. Frustration because you spent so much time and effort shopping and comparing quotes, only to find out your "quote" was a "guess" and your final rate is higher by $200 or more!

At insurance.com, you'll encounter only real quotes and real rates. So if you plan to shop anywhere else, you should know the difference between a quote, a rate, and a guess.


Guesstimates are just that: someone's best guess given limited information. You can usually spot a guesstimate by looking for some qualifying language. Fine print, in other words. Something like: "Figures based on a sample rate for a 48-year-old single male with one accident driving a 2008 Honda Accord." Helpful if you're that hypothetical 48-year-old single male.

Most state departments of insurance request a set of rates for specific scenarios - like the 48-year-old with the Accord - from each car insurance company licensed in the state. They also collect a rate filing that indicates the average rate companies charge. That limited set of information is available to the public on request. However, it doesn't include how or why the company arrived at those rates. Each company considers the "how and why" a trade secret. And since car insurance companies evaluate drivers differently, the "how and why" is different for every company.

Some companies take these published sample rates and rate filings and use sophisticated algorithms to offer what they'd like you to believe are real car insurance comparison quotes. Instead, they'll show you their actual rate compared to their guess at what other companies will quote you, based only on the information you've given them. Even though some companies might be able to generate really great guesses, they're still guesses.

You can also spot guesstimates by the length of the form you fill out. Guesses don't require the detail a quote or rate does. Many companies ask a few basic questions and then display a guess at how much you could pay. It shouldn't be a surprise their "quote" offers a lower car insurance rate than the one you have now. But it will be a surprise when you get a final rate that's substantially higher, often offering no savings at all.


A quote is a price. But it's not a final price. That's because a quote is based only on the personal information and driving history you provide to the car insurance company. And usually that information is incomplete. How so? Because chances are you will accidentally leave some information out or report incorrect details. Hey, we're all human.

For example, you might forget a speeding ticket or think your vehicle has safety features it doesn't. The insurance company will take this at face value and return a car insurance quote based on the information you provide. Because your information wasn't accurate, your quote will probably change on the way to a final rate. But if all your information is complete and accurate, then you can expect your rate and quote to be close - if not the same (or lower!).

Think of a quote as an indicator of the final rate. It's not bindable - meaning you can't purchase a policy based on that price - because car insurance companies aren't willing to take on the risk of issuing insurance to a driver based on incomplete on unverified information.


A car insurance rate is a firm, bindable quote with complete and verified information. This is the real premium rate you will pay.

To get your final rate, along with your basic information, you'll give the company permission to access your motor vehicle report (MVR), Comprehensive Loss Underwriting Exchange (CLUE) report, credit and so forth. They'll check it against the information you provided. Then they'll run it through their car insurance rate engine, determine what rating tier you belong to, subtract any applicable discounts, and issue you a final rate.

If your quote info is really accurate, your quote and rate will be about the same - if not the exact same. After you have received a rate, the company can issue a car insurance binder that functions as a temporary car insurance policy until the final one can be issued, usually within a month.

Get Real Rates and Purchase Insurance at insurance.com

You don't need someone else's estimate or guess about what you might pay. The only place real car insurance rates come from is the insurance company that issues the rate. And that's where insurance.com gets them, directly from the company.

Don't waste time with a guesstimate. Compare real car insurance rates at insurance.com. You could save a lot of money. You'll definitely save a lot of time.

Compare real rates and save real money
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