Many sources will tell you that you cannot negotiate for a discount on your auto insurance rates. Your insurance company wants you to think that you cannot negotiate for a discount on your auto insurance rates. But that is not true. You can — you just need to know-how.

While the party line from insurance companies is that they do not negotiate their rates, it can be done with a bit of perseverance. This article will provide you with the information and tips you need to negotiate with an auto insurance provider.

Figure Out What Coverage You Need

Before you pick up the phone and try to haggle with your auto insurance company, you need to do some homework. You cannot negotiate for a reduction in the cost of your coverage if you do not have a good understanding of what type of coverage you need and how much.

Minimum Bodily Injury Liability and Property Damage Liability

Many states have a requirement that says a person needs to maintain a minimum amount of bodily injury liability coverage. These liability requirements include bodily injury liability per person and per accident.

Typical amounts are:

  • $25,000 per person
  • $50,000 per accident

However, they can be as high as $50,000 per person and $100,000 per accident.

Most states also require at least a minimum amount of property damage liability coverage. The typical amount is $20,000 to $25,000.

Uninsured Motorists and Collision Coverage

Some states require that you carry coverage for protection if you get into an accident with someone who does not have their own insurance and cannot pay for your medical bills and property damage.

Coverage that protects your car in the event of a collision with other cars or objects can also be helpful. Although collision insurance is not required by any state, your lending institution typically requires that you carry collision coverage if your car is leased or financed. If your car is paid off, collision insurance is optional.

Medical Payments and Personal Injury Protection

A few states require coverage for the cost of medical bills resulting from an accident. This coverage can supplement personal health insurance plans and may cover medical bills associated with:

  • Hospital stays and medications
  • Dental care
  • Your passengers’ injuries
  • Injuries if a driver hits you as a pedestrian or bicyclist
  • Funeral expenses

Also known as no-fault coverage, personal injury protection is required by some states. Although it may seem similar to medical payments coverage, it is distinct. Personal injury protection goes a step further than just covering medical bills — it pays for any lost wages in addition to medical expenses from an accident. 


Total coverage for an assortment of things your vehicle could experience, like vandalism, theft, environmental damage, or destruction. Like collision, comprehensive insurance is not required by law, but if your car is leased or financed, it may be required by your lending institution. If your car is paid off, comprehensive insurance is optional.


Auto insurance companies offer several optional coverage plans that cover everything from roadside assistance to rental cars.

After determining the minimum auto insurance coverage requirements you need, you can decide whether to drop optional coverage or reduce coverage limits to minimum levels. For example, if your car is paid off and is not worth very much, it may not make sense for you to carry comprehensive coverage.

For specific liability coverage requirements for your state, visit your state’s department of transportation website.

Low-Hanging Fruit


You may already qualify for certain discounts based on various factors, including your age, driving history, or even the type of job you have. But if your auto insurance company does not know this information, you are not getting the benefits you deserve.

Other discounts may involve things you are happy to do in exchange for saving money, like taking a course or bundling other insurance policies you have with your auto policy.

Review the following common auto insurance discounts and make a list of which ones apply (or could apply) to you.

Auto insurance companies provide discounts if your car has certain preferred features, such as promoting safety or a cleaner environment. These types of discounts include:

  • Alternative Energy: To encourage environmentally friendly practices, some auto insurers provide discounts for cars that use alternative energy sources such as electricity, biodiesel, hydrogen, natural gas, or ethanol.
  • New Car: If a driver is the vehicle’s first title owner and the car is a current model year or one prior, some companies provide a discount on physical damage coverage for up to three years.
  • Safety Equipment: Insurers want to encourage safety features like anti-lock brakes, airbags, passive restraint equipment, and daytime running lights to decrease accidents, injuries, and medical bills.
  • Theft Prevention Devices: Insurers want to encourage these devices, so they do not have to pay for as many stolen cars. Plus, some states require insurers to provide discounts on comprehensive coverage if you have an anti-theft device.

Affiliation Discounts

Many auto insurers offer discounts if you belong to a certain organization or are employed by a certain company. Some even offer discounts based on the type of job you have. Such discounts include:

  • Company and Organization Benefits: Many companies and organizations have partnerships with auto insurance companies to provide discounted rates to their employees and members (e.g., AAA members, university alumni, or members of fraternities and sororities).
  • Occupation: Insurers have found that people in certain fields file fewer claims than others, so some will offer discounts to educators, firefighters, police officers, doctors, lawyers, scientists, engineers, federal employees, farmers, and homemakers.
  • Military: In recognition of their service, insurers often offer discounts to both active and retired members of the military.

Personal Trait Discounts

Certain demographic groups have been found to have lower insurance claim activity than others. Accordingly, insurers have developed discount programs for different traits, such as:

  • Good Student: Statistically, students who get good grades are less likely to have car accidents, so many insurance companies offer discounted rates in recognition of this lower risk.
  • Student Away from Home: If your child driver went to college more than 100 miles away from home and left their car with you, some insurers will discount your policy accordingly.
  • Homeowner: Even if you do not also insure your home with an auto insurance company, they often reward homeowners with discounts because they tend to be more stable than renters.
  • Credit History: There is a correlation between high claim activity and low credit scores, so some insurers have started to provide discounts to those with good credit scores.
  • Senior: Many insurers provide discounts for drivers over 55, and some offer an additional discount for seniors who take a mature driver improvement course online.

Driver History Discounts

Obviously, the fewer accidents you have, the less an insurance company has to pay out on your insurance policy. Insurers recognize factors associated with safe driving habits with discount programs such as:

  • Good Driver: If you have been accident-free for three to five years, insurers will typically reward your good driving history with a discount.
  • Safe Driver: Like the Good Driver discount, some companies have a separate category for driving habits, such as low driving speeds and less aggressive braking. Involves agreeing to have a monitoring device installed in your car.
  • Defensive Driving Course: Insurers want to encourage safe driving to decrease the number and severity of accidents. Some require the course to be pre-approved — make sure the class you plan to take qualifies.
  • Low-Mileage: Some insurers offer discounted rates for individuals who drive less frequently and are therefore less likely to get into accidents.

Customer Loyalty Discounts

It is good business practice for auto insurance companies to keep existing customers happy, so it is no surprise that they offer discount programs to reward your business with them, including:

  • Loyalty: It is easier for insurers to keep existing customers than to attract new ones, so many will provide discounts or other benefits to faithful customers who have been with them for a long time.
  • Multiple Cars: It increases the insurer’s business if they can insure all of your cars instead of just one, and many offer discounts accordingly.
  • Multiple Policies (Bundling): It also increases the insurer’s business if they can insure your home in addition to your car(s), so many offer bundling discounts.
  • Long-Term Plans: It is in insurers’ interests to lock customers into long-term contracts, and many will offer discounts to encourage customer loyalty and commitment.

The process of billing clients is expensive and time-consuming, so any way that an insurer can make that process easier and more efficient will save them money. Accordingly, many auto insurance companies offer discounts such as:

  • Electronic Billing and Auto Pay: To save paper and streamline the billing process, some insurers will provide discounts if you sign up for automatic payments and/or paperless billing.
  • Prepayment: A bird in the hand is worth two in the bush — many insurers will provide major discounts for prepaying your premiums for the year. 

Gather Competitive Intelligence

Are you ready to call your auto insurance company and start negotiating? Not yet. You want to arm yourself with information about what their competitors can offer so that you can leverage this information to your advantage. At worst, if your negotiation hits a brick wall, you will hopefully have identified plans with better terms to which you can switch.

Take the information you gathered about the types and amounts of coverage you need and comparison shop for auto insurance rates. You can use an online rate comparison tool or consider talking to a representative directly. Sometimes, they will provide information about special offers over the phone that you cannot (easily) find online.

When you compare rates, be sure that you do so for the same levels of coverage. Gather information from several auto insurers about:

  • Your Premium: The amount you will pay for your coverage, usually in quarterly or monthly installments.
  • Your Deductible: The out-of-pocket amount you pay before insurance pays the rest. You can lower your premium by selecting a  higher deductible. This may be attractive if you are a good driver or do not drive very much. However, if you drive a lot or are accident-prone, a lower deductible may make more sense for you. 

Time to Negotiate


Now you are ready to call your local agent or a customer service representative to negotiate a discount on your auto insurance policy. Keep in mind that they may be resistant at first and claim that their rates are set. However, you can negotiate your way to success if you use the strategies described below.

  • Polite Persistence: Keep at it — if one strategy is not working, switch to another. And remember, even though this is a negotiation, there is no reason not to be civil or disrespectful. Remember the old adage  — you can catch more flies with honey than vinegar.
  • Frame the Conversation: Talk about why you are such a good customer, such as how long you have been a loyal customer and/or how clean your driving record has been. Insurance companies recognize the value of good customers and are usually willing to offer discounts to keep them.
  • Existing Discount Programs: As noted above, you may already qualify for a discount. Let your insurer know about any factors you noted that could trigger a special discount program. Double-check their information about your credit and driving history and correct any errors that may negatively impact your rates.
  • Cite Competitors’ Quotes: Here is where your preparation really pays off. Let them know that you have shopped around and have one or more better offers. Be prepared to send your insurance company a copy of the competing quote. They may decide to offer the same or better rates to keep you as a customer.

You should also be prepared to try again later. If you are just not getting anywhere, you can ask to speak to a supervisor, or you can thank them for their time and try back in a few days. Talking to a different representative can sometimes make all the difference.

Sample Questions for Directing the Conversation

Not sure how to take the information you gathered and use it effectively in the negotiation process? At a loss for how to respond when the insurance representative just says, “I am sorry, but our rates are fixed”?

The following categories of questions can help you steer the conversation in the direction you want.

Using Car and Personal Driving History

Some sample questions you can use to steer the negotiation in your favor based on your car or your personal driving history include:

  • “My car has airbags — do I qualify for a safety discount?”
  • “My car has a theft prevention device — do you have an anti-theft discount policy I might qualify for?”
  • “Would I qualify for a discount if I took a defensive-driving class?”
  • “I hardly drive anymore, and I cannot remember the last time I had an accident — are there any discount programs for someone like me?”

Using Personal Affiliations and Traits

Some sample questions you can use that are based on personal affiliations or traits might look something like this:

  • “I heard that sometimes insurers give discounts to teachers, and I have been a teacher for 10 years — do you have any discounts for someone like me?”
  • “I work for XYZ Inc. — do they have a partner program with you?”
  • “My son is on the honor roll at school — is there a discount on his coverage?”
  • “Our daughter went off to college this year out of state and left her car with us — is there anything we can do to lower the cost of her coverage?”
  • “We bought our first home last year, and I heard that sometimes insurers give discounts to homeowners — do you?”

Using Loyalty to Insurer

Some sample questions highlighting your loyalty to your insurer or focusing on tweaking your policy include:

  • “Do you offer any discounts for bundling my car and house insurance together?”
  • “I have had my car insurance with you ever since I got out of college — do you give discounts for long-time, faithful customers?”
  • “If I pay for the entire year upfront, would I be entitled to a discount?”
  • “Do you offer long-term membership or renewal discounts?”
  • “What sort of changes could I make to my deductibles to save some money?”

Using Competing Quotes

And finally, an example of how to leverage competing quotes is:

  • “I have talked to ABC Insurance Company, and they offered me $XXX less for the same coverage I have with you — I am wondering if you can offer something better, please.”

Using these questions and tactics can help drive the momentum in your favor, and can often help you negotiate the best discount for your auto insurance. It is important to let the agent know that you are savvy and have done your homework. 


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