How to Read an Insurance Quote
An insurance quote is a document left by an insurance agent detailing the policy he has recommended for you to buy. This document should include all details necessary for you to make an informed decision and may or may not come with a time limit. After the limit, the quote may serve as a useful guide, but circumstances might have changed that alter the particulars. As with any piece of financial information, the best approach is to examine the quote point by point.
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Instructions
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Find the limits of coverage -- the maximum amount the insurance policy will cover for any given loss. Note that these limits might change depending on the circumstances. However, the quote should include information for all such events.
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Note the deductible for the policy. This is the amount you must pay out of your pocket before the insurance company pays anything. In some health insurance policies, a "copayment" replaces the deductible. In many policies, there is a maximum yearly out of pocket expense no matter how many different losses you experience.
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Check the policy premium -- the amount you must pay each year to keep the policy in force. Also check the payment options for the premium, including extra fees for different forms of payment.
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Note all exclusions or limitations to the policy. This section says a lot about the actual value of the offer. Two similarly priced policies with identical maximum benefits and deductibles might look the same. But if one has a long list of exclusions, the other is the better deal.
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Tips & Warnings
It never hurts to check the reputation of the insurance company and insurance agent who gave you the quote. Insurance is highly regulated, but some unscrupulous people still operate in the industry. Look online at the insurer's website for more information about the firm, check the firm with the Better Business Bureau and ensure that the agent has a valid license to operate in your state by referencing his number with your state's department of insurance.
