Why Are Car Insurance Quotes So Different? 

If you’ve shopped around for insurance quotes recently or compared your premium with a friend or family member’s, you may be surprised by the wide variation in price, even for drivers with seemingly equivalent driving records and similar vehicles. Understanding why a friend’s premium is more or less expensive than yours is one thing. Trying to make sense of such wide variation in the price offered to YOU by different carriers is another thing. Which may have you wondering, why are car insurance quotes so different?

Car Insurance is a Complex Calculation

One central reason to keep in mind is that insurance companies typically use hundreds of variables in determining a rate for any one person which leads to a variety of different car insurance quotes. How insurers weigh these factors in their premium calculations can vary widely, too. All insurance companies must create rates that comply with state regulations and file the rates they charge consumers with state regulators. Though all companies are bound to follow the same guidelines, each company may take a different approach to determine which factors are most important in predicting the potential risk a driver represents. For instance, one company may consider coastal neighborhoods to pose a lot of risk while others may not weigh that factor so heavily in order to have a competitive edge in these regions. The same variation can (and does) exist for hundreds of other risk- or profit-predicting factors each of which impacts car insurance quotes.

Car Insurance Discounts Vary

In a similar way, insurance companies may offer discounts for certain groups of drivers or types of motorists with various driving behaviors that other companies may not. In other cases they may offer similar discount programs, but structure or discount them differently, offering less or more generous discounts for say, accident-free drivers or low-mileage drivers.

Companies Target Certain Market Segments

Another reason your quotes may vary so widely is the way that different companies target different parts of the insurance market. Some companies build their pricing to appeal to “preferred” drivers with multiple cars and home and auto bundles, while others may tend to target the middle of the market, while yet others may build their pricing around offering the most competitive rates to drivers with a riskier resume. If you match what a company may have targeted, you may find a very attractive rate. If you are a mismatch for a particular company’s pricing strategy, you may come away with a quote that is not as competitive.

Affinity Groups

In some cases, your quotes may vary widely when one company uses a rating factor that another company does not use at all. An example is a membership in a professional organization or other affinity groups. If you are a nurse or a teacher, one company may have group discounts that correspond with your particular career cohort, while others may not take this group into account, or have no affiliation with your professional organization.

Do Your Homework and Compare

The truth is that the potential reasons you may find insurance quotes to be so different are too numerous to list here. In light of these variations, the important thing to keep in mind is to do your homework and shop around with at least a few companies to compare rates. Also, be sure to research which insurers, if any, offer affinity discounts to members of your profession, membership organization or alumni group. This one affinity group factor may not make the difference in all cases, but it could potentially save you a fair amount of money. Also be sure to explore the many discounts offered by the companies with whom you quote. Many insurers will offer usage-based discounts to any driver willing to have their driving behavior measured for a brief period of time. If you are a good driver, this kind of program is a no-brainer. Even if you are not sure about how you will measure up, many companies are likely to see you more favorably just for being willing to participate in usage-based measurement.

Final Thoughts on Why Car Insurance Quotes Are Different

Understanding your personal coverage needs and what coverage options are available is critical to making an informed decision when getting your quote. You can click on the following links if you are interested in reading about the benefits of car insurance or for information about the best car insurance for your needs.  Regardless of what risk tier or segment of the auto insurance market you represent as a NJ driver, you will be rewarded by doing a little homework to find both the price and the value that are right for you. If you’re seeking a car insurance carrier with exceptional value, consider Plymouth Rock Assurance. Plymouth Rock has been insuring NJ drivers for decades and offers extensive coverage options for multiple risk tiers. Call Plymouth Rock today for a review of your policy, a discussion of your discount and affinity eligibility and a free quote!       

Call 855-993-4470, get your free quote online, or find an agent to learn about auto insurance for college students in NJ. If you need additional information it can be found on our Contact Us page.