Negotiating Car Insurance Rates: How to Lower Your Insurance Premiums

In an attempt to get better car insurance rates, you may wonder, can you negotiate car insurance? The answer is no. Several factors affect your rates, but your haggling capabilities are not one of them.

However, that doesn’t mean you have to be satisfied with the first, or even the fifth, quote you receive. With a bit of research, you can access the lowest of the low insurance rates. Our helpful guide also explains how you can find discounts and take other steps to get your rates even lower.

How To Lower Your Car Insurance Rates

Though you cannot negotiate your car insurance rates, you can shop around for and snag the best car insurance deals available. Here are a few different options to consider to lower car insurance prices.

Compare Car Insurance Rates

One of the best ways to get the best deals on car insurance is to shop around, get quotes, and compare rates. Fortunately, the quote gathering and comparison processes are far simpler today than they were even a decade ago, thanks to the rise of online comparison shopping tools. (For more information, read our “How a Car Insurance Comparison Works“).

When comparing offers, consider not just the monthly rate but the extent and type of coverage. Also, make sure each policy meets your state auto insurance minimum requirements. Though you want to pay as little as possible each month, you do not want your savings to come at the price of adequate protection.

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• Checking Out Car Insurance Rates
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Maximize Your Discounts

Once you have a handful of quotes with which you’re satisfied, further narrow your options by exploring which discounts the companies offer. While you shouldn’t pick or stay with a company because of a single discount, deals that fit your driver profile may help to reduce rates significantly. Many companies offer brand-specific and unique discounts.

However, some deals are more common than others:

• Multiple driver discounts
• Safe/responsible driving discounts
• Multi-vehicle discounts
• Bundling discounts
• Payment in full discounts
• Discounts for enrolling in auto-pay
• Good student discounts
• eSigning discounts
• Telematics, or in-car safety feature, discounts
• Green vehicle discounts
• Homeowner discounts
• Affinity membership/group participation discounts

Car insurers are subject to state restrictions when it comes to offering discounts. For this reason, while getting car insurance deals can help lower your rates, it is by no means the best way to do so.

Carefully Consider When To File Claims

One of the best ways to get low insurance rates is simply by practicing safe driving and keeping claims to a minimum. Though you purchase auto policies to help foot the cost of repair bills following an accident, the irony is that the more you use your insurance, the more it will cost you.

Though the average rate hike following an at-fault claim varies based on various factors, you can expect to pay increased rates for at least three years afterward. If the damage exceeds $2,000, the rate increase can be anywhere from a couple hundred to a couple of thousand more per year.

To avoid having to pay a higher car insurance rate, try to pay out of pocket for costs you can afford. Collision repair costs vary widely and can be anywhere from as little as $50 to more than $2,500. For this reason, it is important to get repair estimates before you decide whether to follow through with a claim.

When debating whether to go through your insurance, also consider your deductible. If you have a higher deductible and the damage is minimal, it may be a no-brainer to pay out of pocket. However, if you purposely selected a low deductible because your discretionary income is limited, you may have no choice but to file a claim.

Finally, consider the value of your vehicle. Once you gather repair estimates, compare the costs to what you could get by reselling your vehicle. If the repairs will cost more than half the value of your vehicle or if your vehicle was constantly breaking down before the accident, it may make little sense to risk a rate hike for a vehicle that’s on its way out regardless.

Bundle Your Policies

Many insurance companies reward policyholders for bundling their coverages. If you own or rent a home and/or own one or several recreational vehicles, chances are you need insurance for those things as well. When gathering quotes, see how much, if anything, you can save by bundling all your insurance needs together.

Boost Your Credit

Though an unconventional method for reducing insurance rates, boosting your credit score is an effective means of accomplishing just that. If you’ve tried all the tips above and still wonder how to lower car insurance rates, take steps to improve your credit. (For more information, read our “Can not paying your car insurance affect your credit?“).

Credit scores are one factor that insurers in most states (except for those that disallow it) consider when setting rates. The theory behind this practice is that consumers with better credit scores are more responsible drivers. Though the exact figures are unclear, studies suggest that poor credit can more than double your rates, while maintaining good credit can help to reduce your rates by as much as 25%.

Conduct Comparison Reviews Every Six Months

While you cannot negotiate car insurance rates with your insurer, you are not stuck paying higher than necessary rates. You always have the option of shopping around, even if you are in the middle of an insurance cycle.

Car insurance companies count on people not doing this, so companies never inform policyholders when their rates could go down. However, you may discover that your good driving behavior, improved credit, and newly married status earn you rate cuts. If this is the case, check with your current company to see if it will match a competitor’s offer. If it won’t, there is no harm in switching companies.

How can you negotiate your car insurance rates?

While there are several steps you can take to reduce your car insurance rates, negotiating with your insurer is not one of them. Instead, if you want low insurance rates, shop around, maximize your discounts, file claims sparingly, bundle your policies, improve your credit score, and seek quotes every six months or so. (For more information, read our “Does getting a car insurance quote lower my credit score?“).