When you visit an auto dealership, you may be able to haggle with the salesperson about the price of a new or used car. But the same isn’t true of vehicle insurance premiums. Insurance carriers typically won’t allow you to bargain with them for a lower rate. Their rates are set based on various criteria and cannot be decreased upon request.
You can likely count on paying, on average, $1,682 per year for 100/300/100 full-coverage insurance if you have a clean driving record and good credit score, per CarInsurance.com data. But while you may not be able to negotiate their price, you can still save money on car insurance in other ways.
- Insurers typically do not negotiate on the premium rates determined by the state’s Department of Insurance.
- Although you can’t haggle on the rate charged, you can pay less by comparing quotes and coverages from different carriers, claiming discounts you qualify for and being a safe and responsible driver.
- Negotiating an insurance settlement after an accident is possible if you can provide valid reasons for a larger payout.
Can you negotiate car insurance rates?
Unfortunately, you shouldn’t expect car insurance companies to negotiate their rates.
“Insurance rates where you live are filed with the department of insurance in your state, so their rates are not negotiable,” says Julie Jakubek, an insurance agency owner in Phoenix.
Mark Friedlander, director of corporate communications for the Insurance Information Institute, echoes those thoughts.
“Auto insurance is a highly regulated business with established rates approved by state regulators. The price of coverage is not negotiable with agents or carriers,” he says.
How to get the cheapest car insurance rates
Car insurance is highly competitive with dozens of options available in all 50 states and Washington, D.C. Rate pricing can differ significantly from insurer to insurer, so it’s worth your time and effort to shop around for coverage.
“You can obtain quotes via online quoting sites or work with a local captive or independent agent to get quotes,” Friedlander says.
He says the Insurance Information Institute recommends obtaining at least three quotes from a mix of national and regional insurers to improve your odds of finding the best deal.
How to lower your car insurance rates
Garnering multiple quotes isn’t the only way to pay less for auto insurance.
“We also recommend that you find out what type of discounts you are eligible for, which can cut the cost of your premium bill significantly – up to 40% or more,” Friedlander says.
The Insurance Information Institute outlines several commonly available discounts for drivers, including:
- Bundling auto insurance with homeowners insurance or other policies from the same provider.
- Insuring multiple vehicles under a single policy.
- Selecting a higher deductible for collision and comprehensive coverage.
- Maintaining an impeccable driving record with no at-fault accidents or moving violations in the past three to five years (criteria vary by insurer).
- Demonstrating a positive credit history.
- Opting for paperless billing.
- Choosing automatic payments.
- Paying the entire premium upfront instead of through installments.
- Maintaining low annual mileage on the insured vehicle.
- Choosing a usage-based or telematics insurance program.
- Driving a vehicle equipped with preferred safety features.
- Installing anti-theft devices.
- Completing a certified driver’s education course — particularly advantageous for newly licensed drivers.
- Successfully finishing a defensive driving course.
- Demonstrating loyalty as a long-standing customer.
- Being a homeowner.
How to negotiate with an insurance company after a car accident
Ben Michael, an attorney with Michael & Associates, says it’s possible to negotiate a different settlement amount with your insurer following an accident.
“Most people don’t understand that the number your insurance gives you is, in fact, an offer. If you accept it, then you have no room to negotiate it. However, you can decline it and give reasons and evidence as to why you think the number should be higher,” he says. “Your insurance company can then counter or accept your offer.”
The good news is that, when it comes to a settlement, you should have wiggle room for some bargaining with your insurance company — to a point.
According to personal injury attorney Josh Rohrscheib, lawyers often have more success negotiating larger settlements than unrepresented individuals, with the former typically recovering three times as much in injury claims.
“One reason is that a lawyer can immediately put a lawsuit on file, forcing the insurance company to incur legal defense costs and creating risk for insurance companies that a jury may award a large amount of money to the injured party. You should talk to an experienced injury lawyer before giving an insurance adjuster a recorded statement and before trying to negotiate your claim with the adjuster,” Rohrscheib says. “Most injury lawyers will give you a free consultation.”
How do you negotiate a cash settlement with your insurer?
After an accident, if you have a valid claim, the insurer will typically pay out either as a one-time lump sum cash settlement or as structured regular payments put into an annuity or fund over time.
The key to negotiating and receiving either type of settlement is to gather and provide bills and receipts related to your injuries and losses and start the claims process as soon as possible. Also, provide factual, prompt answers to any questions the insurance adjuster asks.
“However, ensure you have fully completed your treatment before you begin negotiations. If you negotiate and settle too soon, you cannot be reimbursed for medical expenses incurred afterward, even if they are directly related to the incident,” says Rohrscheib. “In addition, it’s always advisable to speak to an attorney before speaking to an adjuster to protect your interests and ensure you receive the full value of your claim.”
Don’t be too quick to accept the first offer. Insurance companies often try to offer lowball settlements. Press your case based on the facts and expenses you’ve incurred. Remember that you’ll likely have better luck negotiating a larger payout if a lawyer represents you.
If a lump sum settlement is reached, you will be given a check, but the other party involved in the accident will receive a release safeguarding them from future lawsuits.
“That’s why you need to aim for maximum compensation and ensure your settlement covers not only past losses but also any future medical bills, wage loss or negative impacts on your life, like pain and suffering you experience,” Rohrscheib says.
Final thoughts: Negotiating car insurance
Don’t get discouraged because insurers likely won’t budge on the rates they set. If you receive a premium quote you don’t like, you can always shop around and find a different carrier that offers comparable or better coverage — ideally for less.
You can also aim to qualify for more discounts and improve your driving record, which can result in lower rates.
Lastly, when it comes to getting a settlement after an auto accident, don’t be afraid to push for a higher payout from the insurance company.