Insurance IllusionistsWe may be betraying our own industry with what we are about to tell you. It’s akin to the masked magician telling the secrets of how David Copperfield makes a helicopter disappear. Spoiler: it’s just camera angles and the audience is in on it (sorry, David, we’re on a roll right now). By sharing this, we know that there is no way Flo or the Gecko will invite us to the big Insurance New Year’s Eve party this year, but we feel like we need to get this out there. The companies telling you that they compare the rates of the competition to ensure you are getting the best deal, aren’t telling you the whole story. We aren’t saying that anyone is lying, but there is a little smoke, a few mirrors, and a decent amount of misdirection going on.
Know the Difference Between Rates and QuotesPersonal insurance and business insurance may seem different, but at their core, they are pretty similar. While you see the claim of free rate comparison from personal insurance companies on TV ads all the time, there are also plenty of websites offering free insurance quotes for businesses. Free?! That’s great! Here’s another insurance secret: quotes are always free and non-binding. There’s no bargain to be had with free quotes. But, that’s not the only issue with this claim - they’re more than likely offering free rates, NOT free quotes.
Rates are really broad and generally filed with individual states. Because they are filed with the states, they are public record. With a little bit of work and a phone call to your state’s insurance department, you can find out what the filed rate is for any insurance company operating in that state. Insurance companies do a quick calculation based on these filed rates, and the information you gave them, so they can give you “the rates of our competitors.”
The filed rate may be interesting, but it doesn’t tell you how much your policy will actually cost. Have you noticed you can’t buy a policy by seeing rates? If you read the fine print you’ll see that it’s just an estimate. Conveniently, competitors’ rates are almost always higher than the quote you just received from the insurance provider. It’s not a coincidence - rates only tell a small part of the story.
Seek the TruthWhile the rates they show aren’t a lie, they also aren’t really the truth. When you receive a final quote offering coverage for your business, you will see things like credits, debits, underwriting factors, bundle discounts, etc. These discounts can be significant (approaching 50%) if you or your business warrant them. Obviously, this makes a huge difference and it’s why it’s critical that you understand what you are really looking at.
Insurance companies want you to feel like you’ve done your homework and that you can rest easy that you are getting the best price for your business insurance. According to the experts, 3.2 “quotes” is the magic number that makes you feel warm and fuzzy. Most “quote comparison” websites will just give you multiple rack rates instead of actual quotes because it’s easier and it fools you into thinking you’ve compared actual prices. But, you’re now savvy enough to know better - rates are NOT quotes. They can’t fool you any longer.
At Talage, we pride ourselves on giving you ACTUAL quotes that you can buy online instantly. The quotes you see are real prices for real policies because we connect directly to the best insurance carriers’ systems. We don’t skim and return rack rates because we feel it’s incredibly important for you to pay the price you see.