How auto insurance quotes work

Auto insurance quotes are an estimate of how much you’ll pay for an insurance policy based on the types of coverage, limits, and deductibles you choose.

When you get a quote, it’s easy to focus only on the price. But there’s a lot more to an insurance quote than just how much you’ll pay.

Insurance quotes include valuable information about what the policy will and will not cover, how much the company will pay for a covered incident (your coverage limit), and what your out-of-pocket cost will be if you need to file a claim.

To get the right auto insurance policy for you, it’s important to know what factors drive price, the types of coverage you can choose from, and what to look for when comparing quotes from various insurance companies.

What are auto insurance quotes?

An auto insurance quote is an estimate of how much you will pay for coverage. Almost all states require drivers to carry liability insurance, which helps cover the costs of damage or injury you cause to another person in an accident.

Quotes vary between insurance companies, so it’s important to research prices, collect quotes from multiple insurers, and compare them.

What factors influence car insurance quotes?

Insurance companies determine prices based on a variety of factors. While qualifying factors vary by insurance company, here are eight common factors that can influence the price you pay for auto insurance.

Your driving record — People who have a clean driving record with no fines or moving violations pose a lower risk to insurers and generally receive lower auto insurance rates.

Your location — Auto insurance companies set rates based in part on where your car is located. Vehicles generally cost more to insure in areas where theft, vandalism, and accident rates are high, or in places where repairs and medical care cost more. In general, urban drivers pay more for insurance than drivers who live in the suburbs or rural areas.

Your age — Younger drivers are more likely to be in an accident than older drivers, so rates for teens and young adults tend to be higher. Auto insurance premiums generally decrease after age 25 if you have a good driving record.

Your credit history — Some states allow auto insurance companies to use credit-based insurance scores to calculate insurance premiums. Typically, higher scores result in lower rates.

Your vehicle — Some cars cost more to insure than others. Coverage for vehicles with high safety ratings and lower replacement or repair costs will generally be lower.

How much you drive — In general, the more you drive, the more likely you are to be in an accident. If you put a lot of miles on your car each month, your premium will likely be higher.

Your coverage limits — A coverage limit is the most the insurance company will pay for a single claim if you are in an accident or if your car is stolen or damaged. The higher the limits, the more your policy will cost.

Your deductible — The deductible on your policy is the amount you must pay before the insurance company begins to pay for damages. You can usually lower your insurance premium by increasing your deductible.

What is the best way to get auto insurance quotes?

If you’re looking for an auto insurance policy, there are three main ways to get a quote.

Online — Many auto insurance companies offer the ability to get a free auto insurance quote online. And third-party websites can help you quickly compare prices by allowing you to compare multiple quotes from different companies.

Exclusive Agent — If you’d rather talk to someone about your insurance needs, an agent can help. Exclusive agents represent a single insurance company and can provide you with a quote from that company.

Independent Agent — An independent agent can make finding auto insurance coverage easier. Independent agents represent multiple companies and can provide you with quotes from different insurers to help you find the coverage that best meets your needs.

What types of coverage appear on an auto insurance quote?

Each state has its own insurance laws and minimum auto insurance requirements. But there are six main types of coverage that may appear on your quote, depending on where you live.

Liability insurance

There are two types of liability coverage: bodily injury and property damage.

Bodily injury liability helps protect you if you cause an accident and someone sues you for damages—that is, compensation—for your injuries. The liability limit on your policy is the maximum amount your insurance company will pay.

Property damage liability helps pay for damage you cause to other people’s property while driving your car. This includes damage to vehicles and other structures such as fences and utility poles.

Your liability coverage may appear on your quote as a trio of specific coverage limits in thousands of dollars. The three coverage limits are for injury-related expenses per person involved, injury-related expenses per incident, and property damage per incident. These can be represented in an insurance quote with values ​​like 50/100/25, for example.

If your quote says “50/100/25,” that means your insurance could pay up to $50,000 in injury-related expenses for each person involved in an accident, and a total of $100,000 in injury-related expenses per incident. The insurer may also pay up to $25,000 for property damage per incident.

Uninsured Motorist Bodily Injury

Unfortunately, not everyone has insurance. Uninsured motorist coverage helps pay for medical bills and damage to your vehicle if you’re in an accident with an uninsured (or underinsured) driver, and they’re at fault.

It also provides protection if you are the victim of a hit-and-run or if you are a pedestrian and are struck by an uninsured or underinsured driver.

Personal Injury Protection

Personal Injury Protection (PIP) is available in no-fault states, where drivers file claims with their own insurance company, regardless of who caused the accident. If you or your passengers are injured in an accident, personal injury protection helps cover medical bills and lost wages. If the accident is fatal, it may also cover funeral expenses.

Medical payments coverage

Medical payments coverage is a type of insurance coverage that is available in states that do not have “no-fault” systems. Like personal injury protection, it helps pay for medical bills you or your passengers incur due to an accident, regardless of who was at fault.

collision insurance

Collision coverage helps pay for damage to your vehicle if you hit another car or a stationary object like a fence, utility pole or telephone pole. It’s optional, but lenders often require it if you finance or lease your vehicle.

comprehensive insurance

Comprehensive coverage helps pay for damage caused by events other than a collision, such as theft, natural disasters, falling objects, and contact with an animal. Like collision coverage, it’s optional, but your lender may require it if you finance or lease your car.