What is an Insurance Quote and Why It Matters [Get Clued In]

Getting quotes is a standard part of the process if you’re looking to buy homeowners, renters, or even car insurance coverage. These quotes are easy to obtain and will show you how much you will pay for a policy based on your provided information. 

Read on to learn more about “What is an insurance quote,” what it offers, and how the quotes you gather can power your next insurance purchase.

Key takeaways

• Insurance quotes are free and can typically be obtained online, over the phone, through a mobile app, or with an agent.
• These quotes are informal and non-binding, so you’re not obligated to move forward with a purchase.
• Consumers may want to get more than one insurance quote when pricing out a policy to compare available options better.
• Quotes are technically estimates and may change based on the details of your home when you buy and other personal factors.
• That said, most quotes tend to match the final price of your policy if you proceed with the purchase.

What is a quote in insurance?

Quotes in the insurance world are estimates of charges the insurance company provides to potential customers before a policy is purchased. This quote can give you an idea of how much you’ll pay for your desired insurance coverage based on the coverage limits and deductible specified. Getting a quote is typically free and can take as little as 60 seconds. These quotes can often be obtained online, over the phone, or directly through an agent.

So, what are insurance quotes used for? Depending on where you are in the insurance-shopping process, you can use your quotes to shop around for a single policy or even price out bundled coverage if you have multiple insurance policies that you want to combine with the same carrier. You can then use these quotes to compare pricing and coverage options to see which is the best deal.

Gathering insurance quotes can also help you weed out the carriers that aren’t a good fit. For example, if an insurance company doesn’t offer the insurance coverage you need or doesn’t service your area, you’ll find out after requesting a quote.

How does an insurance quote work?

Now that we have defined insurance quotes, you’ll also want to understand how they work and what companies need to provide quotes to potential customers. 

While each carrier will have its own process and requirements, you can expect some combination of the following:

• Let the carrier know where you live. You’ll usually need to enter your location by providing your ZIP code or full property address. This helps ensure that the insurance company offers homeowners insurance coverage in your area. 
• Offer your personal and contact information. Carriers will often collect your personal information before providing insurance quotes. Examples include your name, address, birth date, and gender. If another insured person is on the policy — such as a spouse or domestic partner — you’ll likely need to enter their information, too.
• Select your coverage details. You may be asked about the type of coverage you want to buy and details about your property (the type of home it is, whether you own or rent, etc.). Carriers will usually want to know when you’re looking at buying coverage whether you need a policy immediately or are just shopping around for a few months down the line. 

Once you’ve entered all relevant information, the insurance company will typically generate a price quote for you. You may be offered multiple coverage options at different prices so you can make adjustments and build the exact policy that meets your personalized needs. 

What is included in an insurance quote?

Each carrier will include different information for potential customers when providing insurance quotes, meaning that your experience may vary based on the insurance companies through which you shop around. Generally speaking, though, insurance quotes include some combination of the following:

What kind of coverage the policy offers - One of the most important aspects of any insurance policy is defining exactly what the carrier covers. When shopping for home coverage, your quote will spell out the type of homeowners insurance being priced, the perils covered, and which individuals are protected by the policy. 

This might include coverage for your dwelling, other structures on the property, and your personal belongings. Home policies typically include personal liability insurance, and you may have the option to add certain coverage riders on top of your standard policy. There are different standard protections offered by HO-3 vs HO-6 policies, for example, so it’s important to understand exactly what level of coverage is included.

What coverage the policy doesn’t offer - While it’s important to know what your potential new policy would cover, it’s just as important to know what sort of damage is excluded. Exclusions can vary from one policy to the next and will also depend on the endorsements chosen. Standard home insurance exclusions commonly include mold damage, floods, earthquakes, normal wear and tear, intentional damage, or neglect.

How much protection you’ll have - Your coverage limits define how much protection your insurance carrier will provide following a covered incident. You will likely have different coverage limits for your dwelling than for your belongings or liability protection. Depending on your preferences, your carrier may allow you to change these coverage limits, which will further influence your price quote.

The deductible you’ll have for each coverage option - Your policy’s deductible is the portion of a covered loss you’ll be required to pay out of your own pocket before your insurance company will step in to cover the difference (up to your policy’s coverage limit). Deductibles can range from a few hundred dollars to multiple thousands.

Any discounts for which you qualify - Carriers often have various discounts that can help you save money on your premiums. Discounts are commonly available when you bundle multiple policies with the same carrier, pay your policy’s premiums upfront and in full, or enroll in autopay. You may also be eligible for discounts if you have a newer roof or a security system or haven’t made any claims on your property in recent years.

How much you’ll pay for coverage - Most people’s primary purpose for getting an insurance quote is to figure out how much they’ll pay for coverage. After gathering your relevant property and personal information, insurance companies can provide you with an estimate of your premiums or your cost for the policy. 

While this estimate is based on many data points, it’s important to remember that it is an estimate and may change before the policy is issued and goes into effect. Some carriers will even require an inspection of the property to verify that the information your premiums are based on is accurate and up-to-date. 

Things to consider before getting an insurance quote

If you’re in the market for new homeowners insurance, here are a few key factors to keep in mind throughout the search and policy-building process.

• Your deductible will influence your premiums. You can choose your policy’s deductible from the options your carrier offers. This may be either a set dollar amount — usually starting at a minimum of $500 — or a percentage of your home’s covered value. The higher the deductible you choose, the lower your insurance rates will generally be. 
• You may want more than standard protection. Carriers will set your policy’s coverage limits according to your home’s value and how much they estimate it would cost to rebuild following a total loss. Your personal belongings coverage is usually calculated as a percentage of your home’s value. However, this isn’t always enough coverage, so bumping up your coverage limits or adding riders (like extended replacement coverage) may be necessary.
• Note how your home and items are covered. Many carriers will offer you a choice between replacement cost value (RCV) coverage, which provides you with the cost of replacing your damaged belongings, or actual cash value (ACV) coverage, which factors in age and depreciation. ACV and RCV coverage can apply to things like your roof, other structures, appliances, and personal items, so be sure to consider the difference and build your policy accordingly.
• Consider the insurance company’s reputation. Before entrusting your home and financial security to any carrier, research their consumer reviews and industry ratings. Check places like JD Power, the Better Business Bureau (BBB), and Trustpilot. You can also look at each carrier’s complaint index through the National Association of Insurance Commissioners (NAIC), which shows how the company fares in terms of average consumer complaints and market share.
• Note how you’ll manage your policy, submit claims, and contact an agent when needed. Do you prefer a mobile app? Want to submit claims online? Need to be able to speak with an agent seven days a week? Keep these factors in mind while you shop.

How to get a quote for insurance

These days, it’s easy to get a quote for insurance coverage. (Hippo offers quotes in as little as 60 seconds online!) Depending on the carrier, you can request your quote through the company’s website, on a mobile app, with an insurance agent, over the phone, or even in person.

To get a quote, you’ll need to provide information about your property, including its location, age, condition, and value. You’ll also need to provide personal information such as your name, age, gender, and marital status.

Before any carrier can accurately quote you for coverage, you must choose a few options. This might include choosing which type of insurance you want, how much coverage you need, the deductible you prefer, and whether you want ACV or RCV coverage. You can always change these preferences before finalizing your policy.

Gathering quotes from multiple carriers can be a great way to streamline the process. Companies like Hippo can provide you with numerous insurance policy options and quotes from trusted partner lenders simultaneously, and you only need to enter your information once. 

Tips on choosing a quote in insurance

It’s always smart to get a few different quotes for homeowners insurance to compare your options and ensure you’re getting the best deal for the best policy. Here are some tips for choosing the one that’s right for you.

• Compare apples to apples. Don’t automatically pick the policy with the lowest premiums. First, be sure that the policies you compare offer comparable coverage, including riders and deductibles. 
• Plan for your future finances. No one ever wants to be in a situation where they need to file an insurance claim, but it happens. Be sure that the policy you buy today is one you can afford following a loss; this means considering how much your deductible will be, whether your belongings will be valued with depreciation, and how much you can afford to pay out of pocket.
• Pay attention to reputations. You want an insurance company that will have your back when you need it most. Check out consumer reviews and industry ratings to gauge how each carrier operates and handles claims.

Still have questions?

Want to know even more about insurance quotes and how they work? Here are some of the most frequently asked questions.

Is a quote a final price?

An insurance quote estimates how much you’ll pay for coverage based on the information you provided. If nothing changes, this quote is usually pretty spot-on. However, if the carrier finds a discrepancy in the information you gave or you need to change the coverage, your price may also change before the policy is issued.

What is the difference between a quote and a proposal in insurance?

Both quotes and proposals outline your policy’s coverage and costs. Quotes are non-binding and informal, and offer customers a summary of their coverage options before the policy is purchased. A proposal is a much more comprehensive document that becomes a legal contract once the customer approves it and pays any initial premiums. 

How many quotes do you need for insurance?

While you don’t need more than one insurance quote to purchase coverage, it’s always wise to get as many quotes as possible. They are typically free and can be obtained in just minutes online, but they will show you exactly what your options are and how your pricing compares to other carriers.

Do insurance agents get paid for quotes?

Insurance agents typically don’t make any money by providing quotes to potential customers. If you choose to go with a policy they’ve quoted to you, however, the agent will often make a commission for the policy sale, which comes directly from the insurance company.

How long are quotes valid for?

Insurance quotes are based on current costs and market data, so they typically expire after 30 days or so. If you’re shopping around but don’t plan to buy coverage right away, be sure to ask how long your quote is valid for, as the price may change in a matter of days or weeks.