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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Written by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

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...

  • Car insurance is easily negotiated
  • Checking your credit is the first step in negotiating premiums
  • Your driving history and current location are negotiating tools
  • Get quotes to assist in negotiation

When it comes to car insurance, you might believe you’re stuck paying high rates with the same insurance company you’ve done business with for years, but that’s not true.

Did you know that you have the option to negotiate your car insurance premium? It’s not something many companies want you to know, but negotiation is a powerful tool in finding the best possible insurance rates.

Before you sign a new policy with a new company or allow your current policy to roll over into a new term, consider your powers of negotiation.

Perhaps you have bad credit, you don’t have a big budget, or you don’t believe any company is willing to provide you with a lower rate. Don’t settle just because you don’t think there’s another option.

Learn more about car insurance below and make sure to use our free insurance comparison tool above!

Get Your Credit In Check

If you have bad credit, you might not find it’s easy to get a lower rate or negotiate any discounts. Many insurance companies check your credit score when you provide your personal information for a quote.

They want to know what kind of risk you are to insure, and many companies use your personal credit profile to obtain that information. The common belief is a person with a low credit score is a higher risk.

You’re considered a higher risk because you are more likely to file a claim for even the most minor repairs as you’re unable to pay cash.

If you have a low credit score, it doesn’t hurt to shop around. However, you may want to stick with your company since they’re less likely to run your credit again.

If you have mistakes on your report, you can fix them by contacting creditors and the credit bureaus. This can help raise your score. You’re also entitled to one free credit report from each bureau annually to help you stay on top of your credit report.

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Know What You Need and What You Have

Before you begin your negotiation, go over your policy with a fine-tooth comb. You must know what you are paying for, what kind of coverage you have, and if you have any room to make changes in the policy.

For example, if you’ve been with your insurance agent since you bought your car a decade ago, you might not need the same coverage you needed when it was brand-new.

Now that it’s paid for and much older, you can drop your premium by losing some of the unnecessary coverage you’re likely paying for.

Once you know what you have, what you need, and what you don’t need, it’s time to shop around for better rates than the one you’re paying.

Even if your goal is to stick with the company you currently use, you want quotes so you can provide them to your agent if they seem unwilling to negotiate your rates and premium.

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Call Your Insurance Company

If you can negotiate a deal with the company you already do business with, it takes a bit of the stress off your search.

The best way to do this is to schedule an appointment to meet with your rep in person or to discuss your policy over the phone. Email is fine, but negotiation is often more powerful when you’re carrying on a real discussion.

Ask your agent if you can get a lower rate. It’s that simple. If he or she tells you it’s not possible, have a list of reasons why you believe it is possible to lower your rate.

If you’re a long-term customer with an excellent payment history, a great driving record, and nothing the company can dispute, you’re a prime candidate.

Some insurance agents might tell you there’s nothing left for them to offer you, and that’s when you hit them with the information you’re switching companies if they can’t do better.

You’ll want to have a quote from another company or two that’s lower than the rate they’re providing, as many insurance agents might ask for this so they can offer you a lower rate.

Good customers aren’t easy to come by for many insurance companies. They might deny you a lower rate at first but when it comes down to losing your business, they’re quick to find a sudden opportunity to offer you a better rate.

Play the “Other Insurer” Card


When you’re shopping around for car insurance, one of the best negotiating tools you have is the ability to call and inform one company another company is willing to help you out by offering you this rate. All you need to do is ask if they can beat that rate.

You’re negotiating for lower terms with one company by using the rates offered to you by another company. It helps to have everything you need in front of you from your coverage needs to your payment options.

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Change Your Payment Terms

An often underutilized negotiating tool is your choice of payment. Most people assume there’s nothing they can do but pay the bill to make an insurance company happy, but there’s more to it than that.

Your payment method can reduce the overall amount of money you pay to your insurance company. By offering to pay your premium upfront, you can negotiate a discount with almost any company.

If you can’t negotiate it with one company, it’s easy to simply ask another what they can do for you when it’s time to pay.

Choosing to pay your premium up front allows you to save money in other areas, too. Not only can you negotiate a discount with your insurance company, you can even save money on other fees.

There is not a monthly statement fee. There’s no fee associated with the insurance company auto-debiting your bank account each month for payment, and you never run the risk of forgetting to pay the bill.

Negotiate Your Life Circumstances


Where do you live? Do you live close to work? Do you drive infrequently? Do you work from home and no longer make a commute? Are you retired?

If you can honestly answer yes to any of these questions, it’s time to call your insurance agency to negotiate a lower rate.

Those who live close to work or don’t commute at all greatly reduce their risk of being involved in an accident due to less time on the road.

When you spend less time on the road, you’re significantly less likely to be involved in an accident. This is why there is a discount for those who are retired, and you can negotiate one for your work-from-home job if you ask.

Another consideration is your home address. Is it in a safe neighborhood with a good economic status? If it is, you might be able to ask for a lower rate from insurance companies.

Your car is less likely to be broken into, to be damaged or vandalized, or to be stolen. Your neighbors are more likely to have their own car insurance, and this means you might get a discount as a result.

Negotiate Employer Discounts and Driving Courses

When shopping around for car insurance, you have a few things going for you in the negotiation department. The first is any employer discounts you’re offered through your job.

For example, if you’re a teacher and your school board offers a discount for teachers on their insurance policies, be sure you’re taking advantage of it. Some employment categories are automatically worth discounts due to a less risky occupation.

If you take a defensive driving course and pass, you’re also going to use this as a negotiation tool. It’s not always helpful to insurance agencies, but it’s a tool you can utilize with many to get a lower rate.

Just ask if your defensive driving course is worth any kind of discount as you compare rates company to company.

The problem with negotiation is too many people assume they haven’t any negotiation power. You have the power to negotiate anything if you’re willing to ask, debate, and compare different companies.

One negative response isn’t the final answer when there are many insurance companies willing to offer you a yes. It’s also important to remember one of the most powerful tools in the negotiation process is using one insurance quote from one company to seal a better deal with another.

Don’t miss out on our free insurance comparison tool below! Just enter your zip code and start comparing rates now!