When you’re looking for new insurance products, the first step is receiving an insurance quote from a provider. With a quote in hand, you can assess the coverage the insurer offers and the associated costs, allowing you to make sound purchase decisions.
If you’re new to insurance or simply haven’t changed providers in some time, you may have questions about what insurance quotes are and how they work. Here’s an overview of what you need to know.
What Are Insurance Quotes?
Insurance quotes are formal estimates and policy outlines that allow customers to review the proposed coverage and the associated costs of an insurance policy. Typically, insurance quotes contain the exact details that end up in the policy if the customer decides to purchase it, essentially showcasing the insurer’s service commitments if a customer chooses to buy.
The primary purpose of insurance quotes is twofold. First, insurance quotes inform prospective customers of what they’ll receive from that insurer as long as they pay their premiums. Second, by obtaining quotes from several insurers before making a purchase decision, customers can compare the details to ensure the chosen insurance best meets their needs.
Insurance Quotes Definition
According to Cambridge Dictionary, the insurance quote definition is “a statement of the amount of money that an insurance company calculates as the cost of providing insurance for something.” Essentially, a quote is a formal estimate. It outlines how much a customer will pay in premiums to receive the coverage presented in the estimate document.
What Types of Insurance Do People Usually Get Quotes For?
People can get quotes for nearly any type of insurance product that’s available on the market. The most commonly requested insurance quotes are for auto insurance and homeowner’s or renter’s insurance. However, those aren’t the only types.
Quotes are also common when purchasing life insurance. The same is true for long-term disability insurance. At times, a person may also request quotes for various types of healthcare coverage, including general medical insurance, dental insurance, and vision insurance.
However, healthcare insurance quotes are less common because many people receive their coverage through an employer-sponsored plan, which is usually limited to a single provider. As a result, only those who are purchasing insurance privately, such as through a healthcare exchange, are likely to need healthcare insurance quotes.
What Information Does an Insurance Quote Provide?
Insurance quotes cover two primary categories of information. First, a quote includes details about what the customer pays if they choose to become a policyholder. Usually, the cost is in the form of premiums, which may be quoted on an annual, biannual, or monthly basis, depending on the insurer and whether payment is required once a year, twice a year, or every month.
Second, insurance quotes outline the details of the policy. For example, with auto insurance quotes, the estimate contains details about the covered vehicle, the associated deductible, the amount of liability protection, the bodily injury coverage, and similar information. For medical insurance, it outlines the amount the insurer contributes to specific types of medical costs and under what conditions it contributes.
Essentially, an insurance quote contains all of the information a customer would find in their policy if they chose to purchase coverage. As a result, insurance quotes are a way to review every detail before making a purchase decision.