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How to negotiate lower car insurance

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Follow the detailed script below to negotiate your car insurance fees down.

This is Tip #13 of of the Save $1,000 in 30 Days Challenge. (See past tips.)

Today’s tips is to negotiate lower car insurance. Most of us pick a rate once, then never go back again. But if you do, you can save hundreds of dollars each year.

car-insurance.jpg
First, check to see if you have the right amount of coverage. Nobody teaches us about this stuff, so when you bought car insurance, you may not have known which coverage options to choose.

Second, figure out what kind of coverage you currently have and how much you’re paying
. Don’t be lazy — do this. If you don’t have your current info in front of you, how can you hope to save? Either call your car insurance company or use their website.

Third, it’s time to start shopping around. I prefer the phone because I can usually sweet-talk the rep into telling me about other deals that the websites don’t offer. Computers, however, seem to be immune to my charm.

I made it easy for you. Here are the phone numbers of the big insurers:

Geico: 1-800-861-8380

AAA: (866) 539-8033

Allstate: 866 704 9900

Progressive: 1-800-776-4737

State Farm: Sorry, despite getting good ratings in the comments below, THEY OFFER NO PHONE NUMBER. Anyway, you can get to their auto insurance site here.

21st Century Insurance: Don’t use this worthless insurance company. I used to use them, but they sent me multiple envelopes in the mail EVERY SINGLE WEEK until I finally canceled them. The rates were great, but the hassle wasn’t worth it.

Fourth, be an expert caller by asking these questions.

With each call, you should say, “AAA (or whoever) is offering to insure me for $XXX less” (silence). See what they do. (Note: Negotiating lower insurance using this technique is much harder to do with car insurance companies than banks, so don’t expect very much from this.)

How much would I save if I insure my car and house with you?

What about renewal discounts? How long have I been a member with you? What can you offer me as a discount for long-term membership?

Can I save money by pre-paying my entire year up front?

Let’s check my car. I know other firms offer discounts for features like anti-lock brakes. What about you?

What kind of low-mileage discounts do you offer?

If I enrolled in a defensive-driving course, what kind of discount would you offer? Oh, really? Which courses qualify?

What about discounts for my employer? (Tell them the specific name of your employer?)

Some insurance companies offer discounts for low-risk occupations (engineers). What kind of competitive rates do you offer?

Am I paying for roadside assistance? What other additional “benefits” am I paying for? (If you already pay for AAA, you don’t need roadside assistance through your car insurance. Also, check your credit card: They may offer roadside assistance (but call them and ask how much it really costs if you have to use it – some of their offers for “roadside assistance” really mean “we will assist you by calling someone for you and then charging you out the ass”).

Can you walk me through the deductible changes I could make to save money? (Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you more than 40%. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim. More details here.

AAA, Costco, credit cards, large employers, associations (AARP, teachers’ union): Many of these offer discounts on car insurance. Log onto their website and browse to “perks.”

Read more ways to save on car insurance.

It seems like a lot of work, but the savings are substantial. I took screenshots of the different rates that different insurance companies were offering me:

 

 

Well, as you can tell, that slideshow is completely worthless since you can’t see anything — but the difference between the lowest quote (Geico, which I use) and the highest (Progressive) is $734 per year. That’s a lot for a few phone calls.

Don’t forget: Insurance is not a commodity. If you pick the cheapest provider to save $50/year and they end up not fulfilling your claim — which you could have reasonably known by searching out reviews for the company — it’s your fault. Pick a good company because it can be worth thousands of dollars.

As you’ve seen, “negotiating” lower car insurance is mostly about keeping up with the changing rates and making sure you’re wringing every last benefit from your policy, so set a calendar reminder to do this once per year.

Try it out and let me know what you find in the comments.

Total savings: $25 to $100 per month

Last thing to do

  1. Check out the other tips in the Save $1,000 in 30 Days Challenge
  2. I put together a package of ready-to-use email scripts to help you save more and build your career. To get them — free — click here.
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141 Comments

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  1. Of course, in Massachusetts, you’re screwed, especially if you are subsidizing bad Boston drivers (despite me being much closer to Albany or Hartford than Boston)

    Plus a lot of insurance companies won’t set foot in the state but I will have to check out some of the others tonight.

    • Ugh. I’m in Mass too. My only advice is to look into every company you can. Even ones that are hard to get into (USAA for example; needing to have a family member in the military at some point in their life). Just get enough info from a ton of different companies and compare. Expect to spend a few hours researching. It will pay off – literally – in the end. I found $25/month rates (from Insurance Panda) and $30+ rates from a few other places. The research really was worth it.

  2. I’m a Florida resident and was with AIG, paying $1888 per year. Then I called around and was quoted these rates: $1688 for AllState and $1086 for State Farm. Obviously I immediately signed up with State Farm, and they even have an office right across the street from where I work.

    Savings: $802 a year

    I have to admit, I had no idea how dramatic the difference would be!

    Becoming The Marshmallow

    • The thought occurred to me after reading the Marshmallow blog,(cute story;you must have been smokin’ mad), Did you think to share some of your $802 savings with Ramet? lol

  3. Yep, I am also stuck in the Massachusetts conundrum. No big insurers here…supposedly to keep costs low, although I haven’t seen any evidence of that being true. I had and loved Geico in Virginia, but when I moved to MA, they wouldn’t insure me anymore. It’s probably the best bet for me to check my current policy and see if there’s anything I can modify.

  4. You should do this every couple of years. Insurance companies tend to get comfortable with their customers and don’t give them all the discounts they might be entitled to and/or rates often fall for one reason or another. So Company “A” is cheaper one year, but Company “B” will be cheaper the next.

  5. For my husband and I we decided to stick with someone local that we trust and that offers good advice. We figure what money could possibly be saved by going with another provider is not worth it since we can call up our agent at any time with questions or if we need to put in a claim. I would say this was a top priority – and it has proved useful.

    That said I did check to see if there was a way I could lower our car insurance. One thing I changed was that I reduced our yearly mileage estimate for our SUV. I had changed jobs and now we commute together for work in 1 car. So by reducing the mileage I reduced our premium for that vehicle by $60-$70 a year.

    Also I would recommend doing multiple-line insurance for car, home, and life insurance. We save a lot of money by doing that as well as remaining accident-free and long time customers.

  6. I don’t know why everyone is complaining about Massachusetts. You do know that they dropped the government regulation of auto insurance back in April or so, right?

    I was paying about $2000/year for my Audi A4 with Commerce/AAA. This was since March. I’m 22, have a clean record, and the car has AWD, anti-theft, everything.

    Several months ago, around July, I realized that I can get a discount on MetLife with my company. I called them and now I pay $1050. That’s $950 less for about 30 minutes worth of phone time. I got an additional discount because I opted to have my bill taken out of my pay each paycheck automatically. It’s about $41 per paycheck. And I have BETTER coverage and don’t have to worry about paying the bill every month.

    Just because you’re in MA doesn’t mean much of anything, except for the fact that you’re not willing to try and save some money. There are some very big insurers here, such as MetLife and Progressive (which my fiance has).

  7. Also, keep in mind, there are a lot of carriers out there that many people don’t think/know about. I use MetLife, and their niche is high credit, low number of infractions. If this is you, I would find it hard to find a company that is lower than them. Also, I have had to make claims in the past (none recently…*knock knock*), and the claims process was simple and I had a check in 2 weeks. They offer the same $50 off your deductible for each claim free year as Allstate, they have great programs for teen drivers, etc. Don’t overlook companies just because you always hear of the same “Big 3”. Just my piece of advice.

  8. Esurance is a viable option as well. After shopping Pemco, Farmers, and Progressive, Esurance was the winner. I must admit that we don’t have perfect driving records due to some weird twist of fate last year — 3 tickets within 2 months…after YEARS of clean driving history. Esurance charges us up the ass, but less so than the other big insurers. Multiple line disocunt didn’t help us in this case…Esurance’s offer was more than getting a homeowner’s policy somewhere else. So, that’s what we did. I probably could have talked them into matching the competitor…didn’t even think of that at the time.

    Total savings: approx $500 per year.

  9. I just switched to Liberty Mutual today–the kind of car I drive (MINI Cooper) and my job give me discounts that actually knocked $120 from GEICO’s offer, which was the lowest I had at this point.

    Plus, when I did that, I also told them what my current renter’s insurance was–I just knocked $2/mo. off that as well by switching to my new Car Insurance carrier.

    So, by combining Tips #10 and #13, I’ve saved $122 TODAY.

    Thanks!

  10. @Brian — thanks for the tip, I didn’t know they had dropped that crap. I moved here late last year and hadn’t looked into anything since. I will be sure to do so now.

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