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Multiple factors go into calculating your car insurance rate, including your age, car type, and driving record. Because of that, you can't really negotiate your car insurance rates.
However, that doesn't mean you're stuck paying the quoted rate. Many car insurance companies offer extra discounts, and speaking with your insurance agent about the discounts you qualify for can help you get a better rate.
While learning how to negotiate car insurance rates and ensuring you're getting every discount you qualify for may not be fun, it's not as intimidating as you might think.
Compare rates
Periodically checking your current car insurance rate against other companies can be a good way to ensure you aren't paying more than you need to.
Start by noting your current insurance coverage and discounts by reviewing your policy documents or online account portal.
Then, visit the websites of other car insurance companies and compare quotes. You'll need to provide your personal information, like your name and address, information about your vehicle, how many miles you drive annually, and your driving history. Make sure to compare the exact same amount and coverage types.
Experts generally recommend checking for better deals every six months and getting at least three quotes. If you find a better rate, you can switch insurance carriers without much hassle. However, some companies might impose an early cancellation fee or penalty, especially if you cancel at the beginning or end of a policy. Read your policy documents so you know what to expect.
Script for negotiating a better car insurance rate
At the end of last year, I compared my car insurance rates against other companies and found that my current company has some of the lowest rates available in my area. But that didn't stop me from asking my insurance agent about a lower rate and additional discounts.
While she couldn't offer me a lower rate, we reviewed my current policies and discussed my insurance needs. I increased my liability coverage and added glass coverage, but my rate stayed the same because I qualified for additional discounts.
Although I ultimately didn't switch companies, I would have if the agent couldn't (or wouldn't) work with me.
Here's a (lightly edited) script of my conversation to help you know what to expect from yours.
Agent: Hello, thanks for calling [Insurance Company].
Me: Hi, I'd like to discuss lowering my current car insurance rate and review the discounts on my account.
Agent: Our rates are based on individual factors, and they're competitive for your area, but I'd be happy to look at your account.
Me: Great! I've also been a customer for several years and haven't made any claims. Can you offer a loyalty or other discount?
Agent: You're already getting our loyalty discount, but let's see if there are other options. I see you recently added a home policy, which qualifies you for a bundled discount.
Me: Great. I was also curious if I qualified for a low-mileage discount. I work from home and don't drive much.
Agent: How many miles do you think you drive in a month?
Me: About 300-400 miles a month.
Agent: We offer a telemetrics program that provides X% discount per month, and based on that mileage rate, you would qualify. You would need to install a small device in your car to monitor your mileage, and the discount would be applied monthly. If you had a higher mileage month, the discount would not apply that month.
Me: Thanks, I'll consider that. Can you tell me how much I would save if I bundled my home policy or prepaid my entire year's premium up front?
We dove deeper into the specifics of my situation, and my agent developed a quote and emailed it to me a few days later.
Tips to help you negotiate
Provide facts: If you find a better rate while comparing quotes, save the quote or take a screenshot so you have proof to send to your current insurance agent. They may match it, especially if you are a long-term customer or have more than one policy with the company.
Ask about loyalty discounts: Insurance companies generally want to keep you as a customer, so they might offer a loyalty discount to keep your business. You may also qualify for a discount if you have multiple policies.
Be polite but direct: When you call, be polite but firm about asking for what you want. There's no need to be adversarial, but you don't want the conversation to drift away from your purpose — lowering your rate.
Keep asking: If using a competitor's lower rate doesn't work or you haven't been a customer long enough to qualify for a loyalty discount, ask about other discounts or programs you might be eligible for. While my agent was helpful and interested in keeping me as a customer, I directed the conversation toward discounts and other ways to save, not her.
Be prepared to switch: Since the company's rates were competitive for my area, I felt good about increasing coverage for the same annual rate. But if I had found a better rate somewhere else and my insurance company didn't want to work with me, I was prepared to switch insurance companies.
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Other ways to get a better car insurance rate
In addition to matching a competitor's quote or getting a loyalty discount, there are other ways to get a better car insurance rate.
Available discounts
Most car insurance companies have multiple discounts available. Allstate, for example, offers a discount for being a safe driver, setting up automatic payments, and signing your policy at least seven days before it becomes effective, among others.
Most companies have discounts for bundling multiple auto policies or having a home (or renter's) and auto policy with the same company. You may also find discounts for being a long-term customer, prepaying your entire premium upfront, driving a new car, and having safety features like airbags, anti-lock brakes, or theft deterrents.
The available discounts at each company vary, so look into the options before you speak with an agent or sign up for a policy. Don't be shy about asking the agent to look for as many deals as possible to help you lower your cost.
Average rate:
Low mileage discounts
Less time on the road means less chance of an accident, which makes insurance companies happy. While the specific number can vary by insurance provider, you may qualify for low-mileage discounts if you drive less than 7,000 miles annually.
However, be aware that you may need to download an app on your phone or install a telemetrics device that tracks your miles to get the discount.
Defensive driving course
Similarly, some insurance companies offer discounts if you take (and pass) an approved defensive driving course. Each insurer's discount amount and terms differ, and some state regulations may also influence how much of a discount you receive.
Ask your insurance agent about specific approved courses and when the discount expires. Sometimes, a defensive driving course discount could last several years, and you may be able to retake the course when the discount expires.
Reduce coverage
Finally, consider removing any add-on policies you may have. If you pay for roadside assistance, glass protection, or another optional policy, removing it can help you save money.
You can also ask about reducing the amount of coverage you have. You'll still need to meet your state's minimum insurance requirements, but any additional coverage is your choice. However, be cautious about removing uninsured motorists or personal injury protection since you may be responsible for any expenses exceeding your policy limits after an accident.
Depending on the age of your car, you may also be able to remove comprehensive and collision coverage. However, some lenders or lease agreements may require that you keep certain types and levels of coverage during the life of the loan or lease, so be sure to check before you cancel coverage.
Finally, consider raising your deductible. The deductible is how much you pay out of pocket before insurance kicks in. If you increase your deductible, your insurance rate generally decreases. However, if you raise your deductible, make sure you have your deductible amount in savings to help you after an accident.
FAQs
Can I negotiate lowering my car insurance rate?
You can't usually negotiate your car insurance, but you can compare rates and explore options to help you get the best price. Ask for additional discounts, consider reducing coverage, or raise your deductible to help you save.
How do you make your car insurance cheaper?
You can make your car insurance cheaper by comparing quotes from at least three different companies to help you ensure you're getting the best rate and reviewing the list of available discounts. Consider bundling multiple policies with one company or reducing your coverage, as long as you keep your state's minimum insurance requirements.
Does your credit score affect car insurance?
Yes, your credit score can affect your car insurance rates. Many insurance companies use your credit score to determine your rates, along with your driving and claims history, and other factors. However, some states restrict the use of credit scores when determining car insurance rates.
What makes car insurance more expensive?
Multiple factors make up your car insurance rate, including your driving record, age, gender, where you live, the car you drive, and even your credit score. Additionally, the amount and type of coverage you choose, any optional policies, and your deductible can all affect how much you pay for car insurance.
Bottom line
While you can't technically negotiate your car insurance rate, there are several ways to get a lower price. Don't be afraid to call your insurance agent and ask them for help finding discounts, money-saving programs, and exploring other ways to lower your insurance costs.
As you research the best car insurance rates, get at least three quotes to ensure you get the best rate for you.
Average rate:
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