Daniel Stewart

Why Do Insurance Quotes Fluctuate in Price?

Knowing how to get an insurance quote is easy. But whether you're looking for auto or homeowners insurance, you'll quickly find that finding the best price isn't so cut and dry. Insurance quotes change often, and you may get different prices from the same carrier on separate days!

What gives? Here's what you need to know about insurance quotes.

Understanding Risk Implications

It doesn't matter what type of insurance you're shopping for. Insurance companies look at many risk factors to create quotes.

Take auto insurance as an example. Once you know how to get an insurance quote, you can easily provide basic information to understand how much coverage will cost. But later, you might realize that a friend or family member getting a quote from the same company gets different pricing.

You and your friend or family have different risk implications based on your demographic, and that's why the quotes differ.

Auto insurance companies create profiles based on who you are. They look at your age, where you drive, your history of accidents, etc. Those factors give insurers a better idea of how likely you are to make a claim and how much paying it out would cost the company. Insurance companies even consider factors outside of your control, such as how common accidents are in your area.

The same approach applies to other types of insurance, too. Insurers use many data points to perform statistical correlation analysis to understand the costs associated with covering you. It's about understanding the risk. Prices will increase if you have a greater risk of filing a claim based on the data insurers collect.

Because data is ever-changing, you may get fluctuating quotes. But that's not the only thing that affects price.

Regulations and Fund Availability

Another reason quotes change is changing costs involved with providing insurance. Insurers consider the costs of complying with regulations that dictate premiums and financial reserves. Many companies also have invested funds at the whims of stock market volatility. All those factors can and will affect pricing decisions for individual policyholders.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years' experience in business finance. You can find his thoughts at pension annuities blog.