Why are prices so wildly different between car insurance companies?

I got a bunch of quotes recently and the best one is 30% to 60% cheaper than the others. Coverage is exactly the same for all the quotes. How does this happen? Is this normal?

Answer
As a matter of fact, yes, it’s common for car insurance premiums to vary significantly between companies. This is because each company uses their own unique formula to weigh various rating factors and settle on the cost of a policy.
Companies consider several factors to determine how much of a risk you pose. They don’t all use the same factors, and some may weigh certain factors more heavily than others. Common factors include:
  • Your age
  • Your car’s make and model
  • Your driving record
  • Your claims history
  • Your zip code
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Carol Chung
Answered on Apr 12, 2021
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