Quotes vary because every insurance company prices your business its own way. Each one sets its own rates, puts your work in its own job category, and adds its own discounts or surcharges. A gap of 30 to 50 percent between the highest and lowest quote is normal, and the cheapest one is rarely the same coverage. Who this is for: owners holding two or more quotes that do not match.
The short version
- Each insurance company files its own rates and wants different kinds of businesses. The same facts get different prices.
- How your work is described, and which job category it lands in, moves the price more than anything else.
- The person deciding your price can add a discount or a surcharge of up to 25 percent, based on how your business looks to them.
- Quotes often differ in limits, deductibles, and exclusions, so a lower price may simply be less coverage.
- Errors on the application, like the wrong payroll or a missed claim, make some quotes wrong, not cheap.
What are the main reasons two quotes differ?
Owners usually assume the difference is a mistake or a markup. It is almost always one of the reasons below, and the biggest one is how your work is described, because that decides which job category each insurer rates you under. For workers comp, see how class codes work.
| Reason | What it means in plain English | How big the swing can be |
|---|---|---|
| Its rates and the trades it wants | Each insurer sets its own rates and keeps its own list of the trades it wants. One that wants electricians prices them low, one that does not prices them high. | Often 20 to 40 percent |
| Your job category | How your work is described decides which job category you land in, and "remodeling" and "carpentry" carry different rates. Some insurers price on payroll and some on sales, which moves the number again. | Can double or halve one line |
| Discounts and surcharges | The person pricing you adds either one by judgment, from a plan the insurer files with your state. One may see a single $8,000 claim as noise and another may surcharge it. Commonly up to 25 percent either way, though the range varies by insurer, state, and policy type. Workers comp has no such credits where the state sets the rate or a state fund is the only insurer. | Up to 25 percent each way |
| Limits and deductibles | A $2,000,000 limit costs more than $1,000,000. A $5,000 deductible costs less than $0. | 10 to 25 percent |
| Extra wording and exclusions | One quote includes the add-on pages your contracts need, another excludes residential work or work above two stories. | Hard to see, easy to regret |
| Errors on the application | Wrong payroll, missing subcontractor costs, or an unreported claim. The quote is not cheap, it is wrong, and it gets fixed at audit. | Any amount |
Why does the same insurer quote me differently through different people?
Three common reasons. The descriptions or payroll they sent were different. One used a specialty program for your trade with its own rates. One asked for credits and the other did not. There is also this: most insurers work an account through one broker at a time. The first broker to send your application clears the account there, usually for about 30 to 90 days. It is not permanent, and a broker of record letter you sign moves it.
How do I compare quotes that look different?
Put them side by side and check these in order. Price comes last.
- Insurance company and type. Is it a standard insurer or a specialty one? A specialty policy usually adds a state tax, and in some states a small filing fee. Ask for the all-in number. See admitted versus non-admitted insurers.
- Limits and deductibles. The most the policy pays for one incident, the most it pays in a year, and what you pay first on each claim.
- Exclusions. Residential, height, subcontractor, and pollution exclusions bite contractors.
- The wording your contracts need. That your customer can use your policy if they get sued because of your work, that your insurer will not chase your customer for money it paid, and that your policy pays first.
- Payroll and sales figures. If the numbers are not the same on every quote, the prices are not comparable.
- Price. Now compare, including any broker or wholesaler fee. Fee rules are set state by state, so ask for any fee in writing before you agree.
What should I do if one quote is far below the rest?
Be curious, not grateful. Ask what payroll and description it used, what it excludes, and whether the limits match. A quote 40 percent below the pack is often a different job category or an exclusion you missed. Sometimes it is simply an insurer that wants your trade this year. See also how to tell if you are paying too much.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A painting contractor in New Jersey with 4 employees and about $520,000 in yearly sales gets three general liability quotes: $4,100, $5,600, and $7,900.
What went wrong: The $4,100 quote rated him as an interior painter and excluded exterior work above two stories, which is a third of his jobs. The $7,900 quote rated all of his payroll as exterior work at height. The $5,600 quote split the payroll correctly and included the wording his general contractor requires.
What it cost: Illustrative numbers: the $4,100 policy would have denied his first exterior claim, and his certificate would have been rejected for the missing wording. The $5,600 policy was the real lowest price for the coverage he needed, about $2,300 below the high quote.
The fix: The quotes did not vary because one insurer was greedy. Each one priced a different description of the same business.
Frequently asked questions
Q: Why do insurance quotes for the same business vary so much?
Because each insurance company uses its own rates, its own list of the trades it wants, its own read of your job category, and its own discounts or surcharges. Quotes also differ in limits and exclusions. A 30 to 50 percent spread is normal.
Q: Is the cheapest quote usually a mistake?
Not usually a mistake, but often a different product. Check the job category, payroll, limits, and exclusions before you assume it is the same coverage.
Q: Can the same insurance company give two different prices for my business?
Yes, if two people described your work or your payroll differently, used different programs, or one asked for credits and the other did not. What you cannot do is get two competing quotes out of the same insurer at once. The first broker to apply there holds the account for about 30 to 90 days.
Q: Why did one insurer add a surcharge and another give me a discount?
The person pricing your account adds either one by judgment, using a plan the insurer files with your state. Safety programs, years in business, and claims all feed into it. It commonly runs up to 25 percent either way, though the range varies by insurer, state, and policy type.
Q: How many quotes should I get before deciding?
Three to five real quotes from different insurance companies is a fair market test. Also ask which companies declined and why.
Q: What do I send so that every quote is priced on the same facts?
One application with a clear description of your work, payroll and sales by job category, your claims history report from your insurer (called loss runs) for 3 to 5 years, and the front pages of your current policy that list limits and price (the declarations pages).
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Putting quotes side by side, finding out what each one actually priced, and going back to the market with one accurate application is the core of what we do for owners holding mismatched quotes.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.