Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Apr 14, 2022

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In a Nutshell

  • You cannot negotiate car insurance rates with insurers to reduce monthly costs
  • Comparing rates may enable you to switch to a company that better fits your needs
  • Save additional money by maximizing discounts, filing sparingly and taking advantage of bundling options

Though it’s necessary, car insurance is likely not an expense you enjoy budgeting for each month. In searching for ways to reduce the amount of your monthly income that goes toward coverage, you may wonder, can you negotiate car insurance? The short answer is no. Though several factors influence your monthly rates, your negotiation skills are not one of them.

However, that does not mean that you cannot obtain lower rates. The cost of coverage is not entirely out of your control. With a little research, strategic planning, and discipline on your part, you can find a policy that allows you to keep more money in your pocket each month. Use the following guide not for how to negotiate lower car insurance rates, but rather to find out how to get better car insurance rates the right way.  

How To Lower Your Car Insurance Rates

As with your utility bills, gas prices, or the cost of groceries, there is no way you can haggle car insurance prices with your insurance company. You can, however, shop around and compare prices as well as take other steps to score savings and discounts. Here are tips for how to get better car insurance rates.

Compare Car Insurance Rates

One of the best ways to score better rates on your auto insurance is to shop around. Though the answer to the question of, “Can you negotiate your car insurance rates with your insurer?” is unfortunately no, the good news is that you are not legally obligated to remain with any one company for any length of time. If you find cheaper rates elsewhere, you can switch companies. However, be aware that some insurers charge fees for cancellations that occur during the policy period rather than at the time of renewal.  

Though shopping around and comparing rates may prove time-consuming, it can yield substantial savings. According to one news report, drivers save an average of $416 by conducting price comparisons, while some save as much as $1,846.

Maximize Your Discounts

Depending on your driver profile, you may have access to one or several discounts. Not all insurers offer the same discounts, so look for one that offers the best mix of both good rates and discounts that you can actually use. Check for car insurance discounts like:

  • Safe driver discount
  • Multi-vehicle discount
  • Multiple driver discount
  • Bundled policy discount
  • Good student discount
  • Paid in full discount
  • Discount for automatic payments
  • eSigning discount
  • Discount for in-car safety features
  • Green-vehicle discount
  • Homeowner discount
  • Affinity membership/group participation discount

Ask to find out which discounts are available to you.

Carefully Consider When To File Claims

Car insurance is not like health insurance, which doesn’t increase your rates because you have used it. Rather, the more you use your auto insurance, the more your rates go up.

Average rates increase by 12% after a no-fault accident and by 48% after a first at-fault accident. A 48% increase on average rates amounts to an increase of approximately $348 per year. After three years, which is about for how long rates stay high, that’s a little more than $1,000 more you must pay for auto insurance coverage.

Average rate hikes after a first at-fault accident vary from company to company. In addition to comparing upfront rates, it’s important that you compare these averages as well, especially if you are accident-prone.

Company Average Rate Increase
The Hartford 121%
Progressive 84%
USAA 82%
Geico 78%
Farmers 71%
Liberty Mutual 69%
Travelers 68%
Allstate 66%
Nationwide 57%
State Farm 18%

You can avoid accident-related rate increases by filing claims sparingly. The rule of thumb is that if you can afford the repair costs upfront, and if out-of-pocket costs do not exceed the three-year total for the increase, then avoid filing a claim and pay for the repairs out of pocket.

Bundle Your Policies

Bundling your home, auto, and other policies comes with several advantages. In addition to the convenience that comes from working with a single insurance company, bundling can yield massive savings. Insurance companies offer discounts of between 5% and 20% to customers to purchase two or more types of coverage through them.  

When shopping around for car insurance, bundling discounts are another factor you should consider. While the upfront rates one company offers may be cheaper than a second company’s, the bundling discount — combined with other discounts — may yield more savings and, ultimately, a lower monthly cost.

Improve Your Credit

Though seemingly unrelated, your credit score does factor into your auto insurance rates in all but four states. According to a nationwide analysis, poor credit can more than double your rates, while good credit can reduce your rates by as much as 24%. If you live in one of the 46 states that allow insurers to use credit as a rate-setting factor, try boosting your score if it falls within the “poor” to “fair” range. Then, reach out to your current insurer for a reevaluation or request quotes from other companies.

Understand Your Insurance Coverage

Finally, to get better rates on your car insurance, make sure you understand what you’re paying for. Take a close look at your car insurance details. For instance, many people automatically go for the lower deductible but end up paying more in the long run for it.

If you can go two years without being involved in an accident — which most people can — the money you save on monthly rates can easily cover the extra $500 more you must pay for toward a $1,000 deductible if you get into an accident. After three years, you have already saved more than the money you saved on a lower deductible. Understanding little nuances like this can help you save big on your insurance rates.

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The Bottom Line: Can you negotiate insurance rates?

You can’t negotiate insurance rates, but you can shop around to find a better deal. Now that the question of can you haggle with car insurance companies has been laid to rest, you can start exploring other ways to save on your auto insurance. Compare quotes today to save money.