Auto Insurance Rates: Can You Negotiate?

While you cannot negotiate auto insurance rates, there are several ways to reduce your auto insurance costs. You can shop around for quotes from multiple insurers and compare prices to find the best rates for you. You can also explore possible discounts, increase your deductible, or switch to pay-per-mile insurance.

Compare quotes from multiple insurers

Comparing quotes from multiple insurers is a great way to find the best deal on car insurance. While you cannot negotiate car insurance rates, you can take steps to lower them, and comparing quotes is one of the most effective methods.

When shopping for car insurance, it's important to get quotes from at least three different insurers to ensure you're getting the best coverage at the lowest possible rate. This is because each insurance company weighs factors such as age, location, driving record, and vehicle type differently, resulting in varying premiums for similar drivers. By comparing quotes, you can find the company that offers you the best rate based on your specific circumstances.

It's also a good idea to compare quotes regularly, as the marketplace changes quickly. Checking quotes every six months can help you stay on top of the latest rates and ensure you're not overpaying for your coverage.

Additionally, when comparing quotes, consider the insurer's customer service, claims handling, and overall reputation. You should also look into the discounts offered by each company, as taking advantage of these can further reduce your premium. Some common discounts include multi-policy, multi-vehicle, safe driver, and student discounts.

Remember, when comparing quotes, ensure you're providing the same information to each insurer and that you're comparing the same types and levels of coverage to get an accurate comparison. This includes details such as your age, gender, marital status, vehicle information, driving history, and current insurance status.

By comparing car insurance quotes from multiple insurers, you can make an informed decision and choose the policy that best suits your needs and budget.

Ask about available discounts

While you cannot negotiate the rate of your auto insurance, there are several ways to lower your premium. One of the best ways to get cheaper car insurance is to ask about available discounts.

Multi-Policy Discounts

If you buy more than one type of insurance policy from the same company, you can often get what is called a multi-policy or bundling discount. This usually applies when you bundle your auto insurance with a home insurance policy, but you can also bundle with other policies like renters, boat, or life insurance. The discount for bundling auto and home insurance is typically between 5% and 25%.

Vehicle Safety Discounts

If your car has safety features like anti-lock brakes, airbags, and daytime running lights, you may be eligible for a discount. Airbag discounts for full-front seat airbags can be as high as 40% applied to your medical payments or personal injury protection coverage. Cars that are less than three years old may also qualify for a new car discount, which is often between 10% and 15%.

Anti-Theft Device Discounts

If your car has anti-theft features, you can usually get a discount of up to 5% to 25% off your comprehensive coverage. This may apply to both factory-installed and after-market devices.

Good Driver Discounts

If you have a clean driving record with no accidents, claims, or traffic violations in the past three to five years, you can often get a good driver discount, which is typically between 10% and 40%.

Defensive Driver Discounts

Some insurance companies offer a discount if you take a defensive driving course. This discount may only apply to qualified drivers of a certain age, typically 50 or older, and is usually between 5% and 10%.

Good Student Discount

If you or your student driver is enrolled full-time at a high school or college and meets certain requirements, you could qualify for a discount. The student usually needs to maintain at least a B average and be between the ages of 16 and 25. Good student discounts typically range from 8% to 25%.

Student Away at School Discount

If your student is away at school and without a car, you may be able to get a discount. The student is typically required to be under 25 years old, more than 100 miles from home, and with access to the car only while home during school vacations and holidays.

Pay-in-Full Discount

If you pay your full policy upfront, rather than in monthly or quarterly payments, you can often get a discount.

Paperless Discount

If you opt for paperless billing and receive your policy documents electronically, you may be eligible for a small discount, typically around 3%.

Other Discounts

Other common discounts include those for automatic payments, early shopping (getting a quote before your current policy expires), electronic funds transfer, online quotes, occupational discounts, alumni associations and professional organizations, and usage-based insurance programs.

Increase your policy deductible

While it is not possible to negotiate with a car insurance company, there are some steps you can take to lower your rates. One way to do this is to increase your policy deductible.

The deductible is the amount you must pay out-of-pocket before insurance starts paying a claim. Most drivers choose low deductibles, such as $250 or $500, as they are easy to pay out-of-pocket. However, opting for a higher deductible can lower your premiums. According to a report from InsuranceQuotes.com, you can lower premiums by 9% by raising deductibles from $500 to $1,000.

If you're a good driver and/or don't drive your car often, a higher deductible can be a good option for lowering your premiums. However, if you're accident-prone, drive a lot, or have kids who will be driving soon, it's best to stick with a lower deductible.

It's important to consider what you can reasonably afford to pay out-of-pocket if you get into an accident. If you raise your deductible but can't afford to pay that amount if your vehicle sustains major damage, you could find yourself in financial trouble. To avoid this, consider saving up the full amount of your desired deductible before making the change.

Switch to pay-per-mile insurance

While it's not possible to negotiate with a car insurance company, you can switch to pay-per-mile insurance to save money if you're a low-mileage driver.

Pay-per-mile insurance charges a base rate per month, plus a per-mile fee. Your monthly bill will change based on your mileage. The base rate is usually $30 a month or higher and is determined by factors like your age, vehicle, and driving record. If you don't drive at all for a month, you only pay the base rate. You'll usually pay a few cents per mile. For example, if you drove 200 miles per month at 4 cents per mile, you would be charged $8 for mileage, plus your base rate.

Who should switch to pay-per-mile insurance?

Pay-per-mile insurance is ideal for low-mileage drivers looking for affordable car insurance. It's not usually a good deal if you drive more than 12,000 miles a year. If you drive less than 12,000 miles per year or 1,000 miles per month, you can save money with pay-per-mile insurance.

Currently, only a few insurers offer pay-per-mile insurance, and it's only available in about half of the US. You can get pay-per-mile insurance from Metromile, Allstate, Nationwide, and Mile Auto.

While telematics and pay-per-mile insurance both use apps or in-vehicle devices to track your driving, they have different goals. Telematics programs monitor your driving behaviour to adjust your rates, whereas pay-per-mile insurance charges you a direct per-mile fee.

Remove unnecessary coverages

While you cannot negotiate your auto insurance rate, you can take steps to lower it. One way to do this is to remove unnecessary coverages.

If you're going away for an extended period, reducing your coverage could be a good option. You can remove all the unnecessary coverages; after all, your car will be in storage. With this option, you won't pay for coverage you don't need while your car is temporarily out of use.

You can reduce your coverage to only what is required in your state. Almost every state requires liability insurance, and others mandate uninsured/underinsured motorist coverage, personal injury protection, and/or medical payments coverage.

If you have a car loan, you may be required to keep some coverages. However, you can still get favourable rates by shopping around and comparing as many quotes as possible.

If you're going away on military deployment or vacation and won't be using your vehicle, you can also remove yourself from the policy if your car is insured with several drivers. This option can reduce your premiums if you are the riskier driver.

Remember, if you cancel your policy entirely, it is illegal to drive without insurance, so make sure you have another policy lined up.

Frequently asked questions