Are You Being Bait-And-Switched When You Shop For Insurance Online?

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Are You Being Bait-And-Switched When You Shop For Insurance Online?Bait and switch or good business? Why your insurance quote can change when shopping online.

Ah the modern age: Self-driving cars, trips to outer space, and easily getting an insurance quote online! We really do have it all. 

As if!  Well, yes, we do have self-driving cars, and space flight has been around for a few decades. But getting a reliable insurance quote online — one that doesn’t change sometime during the process — is still elusive, and that can be very frustrating. Frankly, it often feels like a bait-and-switch. 

But why does this happen? Why do insurance quotes, even from the same insurance company, often change so much during the sales process? Like many things in insurance (okay, like all things insurance), it has to do with risk. 

Hooking a customer with "Rate Call 1"

Calculating an insurance premium takes a lot of data, not to mention the input of a trained expert (even in our super sleek, AI-ified world). Some of this data is cheap and readily available — like your date of birth, zip code, or car model. A provider can buy this for next-to-nothing from a data broker or get the info from you, the customer. 

So, to get you in the front door and keep you interested, insurers will use cheap or self-reported information to show you a quote after only a few questions. This is usually the first price you see, which in the industry is known as a “Rate Call 1,” “Initial Rate,” or even a “Teaser Rate.” The insurer hasn’t risked much money in generating the quote, but they’re hoping you’ll be hooked nonetheless.  

Landing a customer with "Rate Call 2"

Next is when things start to get riskier and more expensive for the insurer —  and often more frustrating for customers. To actually fully underwrite your risk, an insurance company needs a lot more data. They’ll want to know things like your MVR (“motor vehicle record”), credit score, or detailed intel about weather conditions in your region. All of this data is expensive to acquire and has the potential to really impact your quote. 

Once they collect this new information, the insurer will provide you with a much more accurate quote — something they will actually sell you insurance for. This is called the “Rate Call 2,” and it is likely to be close to the actual rate for your policy. But because it’s probably different from the “Rate Call 1” you initially saw, that price difference can be super frustrating. Which is fair enough! 

As we mentioned, it’s all about mitigating risk for the insurance companies. And since each of these “Rate Call 2” data points can cost $2 or more per quote, and only 1% of quotes generated online are ever even purchased, you can see why this is a two-step process. But that doesn’t make it any less frustrating for customers!

Online Insurance Shopping with Marble

Shopping for insurance with Marble vs. everyone else

At Marble, we’re constantly working to make Rate Call 1s, and even some Rate Call 2s, instant. It’s hard, and the carriers don’t make it easy, but we’re making progress. In addition to (semi) instant quotes, Marble will notify you of rate hikes and will help you save money by shopping for you and providing you with quotes for different policies. Join Marble today for an automated shopping experience, all while earning rewards.