Are car insurance quotes accurate?

All too often, consumers price the cost of auto insurance just to receive an entirely different bill from their insurance company once the policy is issued.

When you are shopping for car insurance to insure a new car or to switch from one company to the next, you are often told to do a rate comparison with a long list of different carriers to find the best rates. It does make sense for a customer to shop around, but sometimes it can be overwhelming, especially if you don’t know what exactly you’re supposed to be comapring.

As an educated consumer, you should come to understand the importance of comparing prices for a product that is as personalized as auto insurance. Because there are so many variables, you want to make sure your vehicle as well as yourself is protected.

How often should you check car insurance quotes? Understanding this can help you save in premiums each year, so long as you understand that there is a possibility that your quotes will be wrong.

They can either be at the fault of the consumer or the fault of the agent. Learn more about auto insurance misquotes and the actions that you can take to prevent binding a policy that will wind up costing more than you thought.

Start comparing car insurance rates from multiple companies now by using our FREE quote tool!

Is it against the law to provide consumers with a misquote?

It might seem like a predatory practice to provide a consumer with a quote for low priced premiums just to send out a bill that is exorbitantly higher.

As unfair as it might sound, a misquote is only a violation of insurance regulations when an agent intentionally gives prospective clients an estimate just to gain their business. Insurance agents should never purposefully misinform a customer just to get them on board with their service.

Intentional misquotes that are 20 percent lower in price than others are a sign of insurance fraud and can be reported.

Since most agents will not admit misconduct and it is difficult to prove, most of the known misquotes reported today are unintentional.

Unintentional misquotes most frequently happen when the party who is requesting the quote provides inaccurate or false information that does not match the information provided by reports ordered by the company’s underwriter. This can include but isn’t limited to lying about marital status or a credit score. Since either of these things can affect an auto insurance policy, they shouldn’t be lied about. Nor should an agent write down inaccurate information.

It is also possible for a quote to come back higher when the agent enters the wrong VIN or inputs data incorrectly into the system. The mistakes may not always be malicious, but when it comes time for an agent to offer you cheap rates of coverage, make sure it’s with all the proper information you’ve provided, and that nothing has been falsified.

Why are car insurance companies not required to honor the quoted price?

While not ideal, these data entry errors are careless but not illegal. The pricing error can create problems for you, so you always have the option to cancel the policy when it is ready to be issued.

Since auto insurance quotes are only quotations, the company is not bound to offer you fixed premiums until the application has gone through underwriting.

After underwriting, the policy will either be denied or declared ready for issuance.

Any applicant who has a policy come back that has premiums higher than what was originally quoted has the option to cancel the policy from inception. This may lead to negative customer reviews, but the company isn’t at fault because nothing was ever set in stone.

Read more: How long does a car insurance quote last?

What is underwriting?

Underwriting is the process that all auto insurance policies go through to verify information on an application and to assess risk.

When the quote turns into an application, the application is then reviewed by an underwriter.

The underwriter will order your driving record, your claims report, your credit rating, your prior insurance information and other information that can help them determine if you have been honest.

Underwriting is basically the company’s time for due diligence to avoid entering into a binding contract with a person who has made false statements.

If the insurer did not have underwriters, someone with a very risky driving record could easily pay the same price for coverage as someone with 20 years of violation-free driving.

Failing to collect adequate premiums can lead to insolvency in the world of insurance.

Read More: What information do you need for a car insurance quote?

Case Studies: Are car insurance quotes accurate?

Case Study 1: Misquoted Due to Inaccurate Information

John was shopping for car insurance and provided inaccurate information regarding his driving record, including an incorrect date for a past accident. Based on the provided information, he received a quote with low premiums.

However, during the underwriting process, the insurance company discovered the discrepancies and adjusted the premium accordingly. John learned the importance of providing accurate information to avoid misquotes.

Case Study 2: Pricing Error Caused by Data Entry Mistake

Sarah requested a car insurance quote online and entered her vehicle’s VIN. Unfortunately, she made a single digit error in the VIN, resulting in an incorrect rating code and premium cost. When the insurance company reviewed the accurate VIN during underwriting, they found the discrepancy and adjusted the premium accordingly.

Case Study 3: Unintentional Misquote Due to System Input Error

Mike contacted an insurance agent for a car insurance quote and provided all the necessary information. However, the agent accidentally entered some data incorrectly into the system, resulting in a misquote with lower premiums.

Once the error was discovered during underwriting, the premiums were adjusted accordingly. Mike understood that unintentional mistakes can happen, but it’s crucial to ensure all information is accurate to avoid misquotes.

How do you avoid a misquote when you are shopping for car insurance?

You cannot help but feel foolish when you price the cost of insurance, and your failure to provide an accurate violation date, or even a birth date, leads to an astronomical rate increase.

Since you comparison shop to educate yourself on rates in your region and in your demographic, gathering and providing the most accurate information for a quote is crucial.

Telling a white lie or failing to tell your insurer even a tiny detail could be a huge mistake when you need to file a claim or when your bill is due. The same can be said if you’re looking into online quotes and you fill out false information. Of course the auto quote is going to come back looking good, but once the company gets all the right information, they are under no obligation to provide you the quote you were given.

There are ways to ensure that all of the information that you provide is accurate before the application is ever submitted.

If you have had a misquote in the past, you will probably be more careful as you fill in quote forms or provide the numbers and dates to your agent.

Here are a few areas where just one digit or a single word can make a huge difference in the cost of your quote:

– Driver License Number and Date Licensed

You might not think having an exact date licensed is important, but it can make all the difference on the policy.

Your driver’s license number is what gives the underwriter access to your driving record, but the date licensed is what will unlock experience discounts and credits for the years of experience that you have.

– VIN

The VIN is a long string of digits that identifies a specific vehicle by its year, make, model, sub-model, specifications, and features.

If you are just a single digit off, this could change the entire rating code of the car and its premium cost.

– Dates of Violations and Accidents

You should never leave off an accident or violation that can be seen on your record.

State transportation departments and insurers communicate with MVR and CLUE reports. By entering your license number, the company can see everything.

Be sure to check your records if you do not have dates so that you can provide the best and most accurate information.

Now that you know how quotes can be inaccurate, it is time to start getting accurate quotes.

Gather the most detailed information possible and enter your zip code into our FREE comparison tool to receive quotes from multiple providers!