Why did my policy come back more expensive than the online insurance quote? Is this an insurance scam?

Hi,

One of the most common questions and/or complaints I hear about online insurance quotes is from people who's actually policy got delivered with a higher premium than the initial quote. This tends to upset people, especially if the policy was not delivered by an insurance agent who took time to explain the higher price.

I have to say that insurance companies are one of the most highly regulated industries by state and federal governments. It is unlikely that a licensed insurance company is out there scamming people on the internet. But like any other company, they may be a little - shall we say - optimistic when promoting their products.

Let me tell you a story. I was on a life insurance appointment, and I gave a nice lady her premium quote. She told me that she had done an online insurance quote which was about $10/month cheaper. I looked at the price and compared it to my own company. Then I explained that she might qualify for a similar rate, but only if the policy came back 'preferred'.

Her face lit up, and she said, "Oh yes, that's what I selected...a preferred rate." I tried to explain that you cannot just select a preferred rate but have to qualify by health history, credit, and other factors. I'm sure the situation is similar with car insurance, only they would consider a driving record.

The lady didn't get it. I did not make a sale. See, I am usually conservative and quote a standard rate while explaining that I will try to make a case for a preferred rates. Apparently the online websites are quoting preferred rates and hoping the consumers will accept a higher rate in case they don't qualify.

I hope this story illustrates why advertised rates may seem better than agent quotes - and why sometimes the advertised rates won't be YOUR premium rate.

I like this insurance quoting service because you can get online insurance quotes, and also a local agent finder. That way, if you have questions about some of the plans outlined on the internet, you can follow up with a call to a local agent.

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