Are Auto Insurance Rates Negotiable?

Last Updated on February 8, 2019

Though some auto insurers are willing to negotiate rates, the majority will not budget from their quoted price.  If your auto insurer refuses to negotiate your rate, you can shop around for another quote. In some cases, customers who present competitors’ quotes to their current insurer can negotiate their rate down to market rate.  However, the unfortunate truth is most auto insurance companies are unwilling to negotiate.

Why Haggling on Auto Insurance Rates is Rarely an Option

negotiate insurance ratesAuto insurance companies rarely tolerate haggling as insurance rate proposals must be submitted to the State Department of Insurance for approval.  Once approved, changes cannot be made to the rate unless another review is requested. In other words, the insurance company is required to offer a specific rate backed by financial evidence to make any changes.  This is a time-consuming process bogged down by bureaucracy. As a result, few auto insurance providers are willing to budge even slightly from their quoted rate.

There is no Single Rate for Each Driver

If your auto insurance provider is unwilling to negotiate your rate, do not assume the quoted price is the only one available.  Slight alterations to your coverage levels and other contributing factors really can alter the price quite significantly. The key is to find the right balance between coverage levels and the monthly premium.  Furthermore, there are numerous car insurance discounts available through the majority of carriers. As an example, young drivers who have good grades, those who served in the military and drivers with excellent driving records are often eligible for discounts.

Be flexible, explore your options and do not settle on a quote until you find the right balance between coverage and cost.  If the insurance company pushes to raise its rates, they must show the hike is necessary to make money from the business relationship.  If the insurance company were to provide a rate lower than the already-approved rate and state regulators find out, the insurance company will be subjected to penalty.  It is possible for the insurance provider to lose its license or face hefty fines if the transgressions are egregious.

A Roundabout way of Negotiating for Car Insurance Prices

Though formal auto insurance negotiations rarely occur, there is a roundabout way of negotiating your auto insurance rate down to a reasonable level.  Take the initiative to obtain insurance quotes from a number of providers. You can shop for auto insurance online or over the phone. Some find working with an independent insurance agent in their community helps pinpoint the optimal coverage at an affordable price.  This agent’s services cost money yet the cost is justified if he or she finds an auto insurance bid that saves you money for years to come. The independent agent shops the driver’s profile across a number of auto insurance providers, providing them with the opportunity to compete for his or her business.  This is the most efficient means of finding the lowest possible rate with adequate coverage.

When in doubt, do not commit to an auto insurance arrangement that does not feel right.  Trust your gut, walk away from a proposed rate that is too high for the coverage level and continue looking for a better quote.  It is important to remember auto insurance rates change with regularity. If you stick with your current policy and keep shopping, you will likely secure a lower rate in a reasonable amount of time.

Do your homework before attempting to obtain the best combination of coverage levels and premiums.  Figure out exactly what you need from your auto insurance in terms of coverage levels and support following accidents and other unfortunate events.  This way, you won’t end up paying for a policy with all sorts of unnecessary services you are unlikely to use. Be sure to check with your bank, the dealership and the state to determine the minimum requirements for insurance.

Above all, ask questions of the insurance provider and others who work in the industry.  Find out as much as you can about coverages, deductibles and policy details. Do not make a decision until you have reviewed coverages and premiums from all competitors in-depth.  The more you learn about auto insurance, the easier it will be to enjoy leverage when searching for an affordable policy rate.

Auto Insurers Will Continue to Avoid the Negotiating Table

It seems logical for an auto insurance provider to attempt to win market share by negotiating with customers.  Such a development is unlikely as each insurance company establishes its own distinct car insurance rates. These specific rates are subsequently filed for approval with the department of insurance to guarantee they do not discriminate against any particular group.  Unless the bureaucratic requirements change, auto insurance providers will continue to sidestep the negotiating table in favor of a single take-it-or-leave-it quote.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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