Frequently, you may encounter statements asserting that “you cannot negotiate insurance rates,”. It is true that rates refer to the established charging structure, which is set by the insurer and approved by authorities in each state. Insurers are obligated to adhere to this structure to ensure fairness to all policyholders. While challenging the rating structure itself may not be possible, you can still engage with your car insurer or agent to inquire about any potential discounts or improved rates you may now qualify for, compared to their previous quote for you. This approach is entirely reasonable and can prove beneficial.
Seeking the most favorable car insurance rates tailored to your specific circumstances is entirely reasonable given the numerous nuances and tweaks associated with auto insurance. To achieve this goal, consider the following reasons why and methods on how to negotiate with your car insurance provider:
Definition of Negotiation: It is a process of finding a solution that will bring two parties in agreement. In layman’s terms, negotiation is a give and take to find a middle way. So, there is nothing absurd about negotiating to lower auto insurance and there is every possibility that it may result in a successful outcome if the agent you are talking to is willing to put the work in and you are willing to make concessions to get what you want.
Moving Parts: When you ask your agent or insurer to see if they can lower your auto insurance premiums, you aren’t asking them to change their rate structure for you but asking them if you can qualify for lower rates and more discounts. If you improved, you can move to a lower-risk tier that qualifies for lower rates. There are so many moving parts in factors affecting your vehicle insurance premiums that any slight change may qualify you for better rates.
For example, your credit score may be improved, a traffic violation ticket may come off your record, it may be that three year past since your last accident, a high risk driver on your policy isn’t a teenager any more, you may have completed a defensive driving course since, installed a lowJack to your car. These are some of things you can think of to bring up in the conversation to see if you can be placed in a lower-risk tier and qualify for better rates.
Update and Rerate: Often automobile insurance companies or agents don’t call you before they determine their renewal premiums and ask what changed since the last time they rated you. This is your job and opening for negotiations. There are so many details in your application and you can go through them with your agent and update them. Once you finish, you can ask them to requote based on the changes made.
For example, when looking into your details, you mention that your teenage child has joined a college in a different state and only drives your car on holidays. And the agent picks up on that and applies a hefty discount on your policy for a child away at college. Again, an agent may realize that your renewal is due in a couple of weeks and suggest that they could apply an advance purchase discount but you commit to renewing your policy right now.
Give and Take: If you want to negotiate for a cheaper vehicle insurance premium, you may need to be prepared to give way and reduce risks for the insurance company. This is the exact definition of a negotiation where you make concessions to get what you want. Even just giving up receiving paper copies of your policy and getting them digitally to your email account can qualify you for a small discount. All it takes for the agent to do is tick the relevant box to switch you from postal to email communications.
Furthermore, little tweaks on your policy reduces the risks for the insurer and may not be a major issue for you. For example, slightly increasing even just the Collision deductible and leaving Comprehensive coverage deductible the same may be enough to get you better rates. There is nothing against playing around with your deductibles and it is a fact that premiums may go down when you increase deductibles. If you are a good driver and haven’t had any claims for the last ten years, you may be comfortable with the change and happy to get a little relief on your premium.
Discovery: When you are talking to your agent or insurer, you may discover many things about your policy, possible discounts and saving opportunities that you didn’t know before. So, there is no harm in having a cheeky chat with your insurer and discovering the ways you can lower your car insurance premium together. You may even restructure your auto insurance policies into a multi-car policy and get a large discount. Again, it is a perfect example of a negotiation in which you work together and find a solution.
Open Dialogue: There are so many different solutions to lowering your auto insurance premiums and opening up a dialogue (negotiation) with your carrier may show you the ways you didn’t know it was possible.
Here is another clearcut example of how just talking to your agent and asking the question can benefit you: You have 3 cars and 3 drivers in your household. Your spouse drives a luxury SUV, you drive an expensive new car and you have an old car, which is only insured for liability only, for your teenage child. You didn’t think much of it and put all the cars and drivers in a multi-car insurance policy. Now without guidance from you, your insurer decided that they will allocate the highest risk driver (the teenager) to the highest risk car as a primary driver. When you start talking about your policy arrangements with your agent, this came up and you clearly pointed out who is a primary driver for which car, your agent made the changes and requoted substantially lower premiums just for this simple correction.
Hopefully, the points and examples are clear. Next time when an agent quotes a line like “car insurance rates cannot be negotiated” you reply by saying “let’s have a look at, shall we”. Essentially, all you are doing is having a look at your options and educating yourself in the process. If they don’t like the word negotiate, you can use another word such as update, rerate, requote, go over the details, see if there is anything you can do to improve. Often there is a way, if you are willing to look deeper and give and take in the process. Even for just asking, a knowledgeable agent would be able to suggest ways they can help.
Shop Around and Switch: If you prefer not to negotiate with anyone or feel uncomfortable doing so, an alternative approach is to thoroughly shop around to find the lowest price and consider switching providers. This option is available to everyone, although some individuals might still choose to explore the possibility of negotiating a lower vehicle insurance price with their current providers and remaining with them. It’s unfortunate when a company or agent rejects or frowns upon your efforts to remain loyal to their services.