Can You Negotiate Car Insurance?

You can shop around for the most affordable car insurance rates, but you won’t have much success if you try to negotiate the car insurance premiums an insurer charges you.

Michelle Lambright Black
Michelle Lambright Black

Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has over 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more. She's also a three-time finalist for the best personal finance freelancer award from the Plutus Foundation. When she isn't writing or speaking about credit and money, Michelle loves to travel with her family or read a good book. You can connect with Michelle on Instagram or Twitter

Sarah Archambault
Sarah Archambault
  • Experienced personal finance writer

  • Background working with banks and insurance companies

Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.

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Updated May 7, 2024

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Car insurance can be expensive. So when you need to insure your vehicle, it’s a good idea to try to save wherever you can. Unfortunately, negotiating the cost of your coverage with your insurance company is typically not possible, but you may be able to find other ways to save.

From policy discounts to deciding when you pay your premium and even claims reimbursements, here’s what you need to know about finding some flexibility with your car insurance rates.

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Why you can’t negotiate car insurance rates

Car insurance companies don’t typically allow you to negotiate your car insurance premium. Instead, insurers base rates on a wide variety of factors that contribute to the likelihood of you filing a claim. Drivers seen as low-risk generally pay less for car insurance than high-risk drivers.

To determine your rate, car insurance companies consider the following factors:[1]

  • Driving record

  • Age

  • Gender

  • Marital status

  • Vehicle make and model

  • Age of vehicle

  • Geographical location

  • Credit history

  • Previous coverage history

  • Types of insurance deductibles

Keep in mind that although you can’t negotiate your insurance rates, your state representatives and regulators may have a say in what insurance companies do — especially for car insurance rates increases and risk-assessment tools.

For Example

Most states allow car insurance companies to use credit-based insurance scores to set your car insurance rates. Credit-based insurance scores can help insurers predict the likelihood that drivers will file claims. Yet eight states forbid, or strictly limit, this practice: California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon, and Utah.[2]

What you can negotiate

Despite the fact that car insurance prices aren’t up for negotiation, you may be able to find flexibility in other areas, including:

  • Payment schedule: Depending on your insurer, you may be able to decide when you pay your premium. For example, you could set up monthly payments, a series of installments, or pay your premium up front. You may also have the option to lower your car insurance costs if you pay your insurance premium in full.

  • Claim amount: If you’re in an accident and have to file a car insurance claim, the claim settlement your insurance company offers may be negotiable. If you’re unhappy with the offer, you can decline it or seek legal representation, especially if your car insurance company denies your claim.

How to save on car insurance without negotiating

Although you can’t negotiate car insurance rates, you can take steps to lower your car insurance costs.[3] The tips below could be a great place to get started.

  • illustration card https://a.storyblok.com/f/162273/x/fa11c1fe75/comparison-website.svg

    Comparison shop

    One of the best ways to save money on the cost of car insurance is to shop around and compare multiple car insurance quotes. Average car insurance premiums vary widely, sometimes by hundreds of dollars or more, depending on the insurer you choose, your age, your gender, and other factors. It’s wise to compare your options to find an insurance company and plan that works best for your needs and budget.

  • illustration card https://a.storyblok.com/f/162273/x/74eeb59654/discounts.svg

    Seek discounts

    You may be able to cut your car insurance costs by looking for insurers that offer discounts. Car insurance discounts typically cut between 3% and 60% off the cost of your auto insurance premiums, depending on your eligibility and other factors.

  • illustration card https://a.storyblok.com/f/162273/150x150/789c6c481b/car-and-driving-96x96-green_007-driver.svg

    Drive safely

    A clean driving record might help you lower premium costs. Try to avoid major violations and practice safe day-to-day driving habits. And if you’re able to attend a safe driving course, you might also be eligible for an additional defensive driving discount.

  • illustration card https://a.storyblok.com/f/162273/150x150/42a396bd18/credit-and-loan-96x96-green_033-discount.svg

    Take care of your credit

    A good credit history has the potential to save you money in numerous ways, including lower premiums on car insurance in many states. If you live in a state where car insurance companies are permitted to use credit-based insurance scores, improving bad credit might help you secure a lower price on your car insurance premium. In the meantime, you might consider getting quotes from insurance companies that don’t consider credit.

  • illustration card https://a.storyblok.com/f/162273/x/c1984b0bb9/safety.svg

    Choose a safe vehicle

    Car insurance rates can vary tremendously according to the type of car you drive. So, if you want to save money on car insurance, choosing a safe vehicle make and model can go a long way toward helping you achieve that goal.

    In general, cars with more robust safety features are more affordable to insure. Yet luxury vehicles and larger vehicles, like trucks and SUVs, may feature higher premiums compared to sedans.

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Negotiating a claim settlement

A car accident can be a stressful experience — one every driver hopes to avoid. Yet if you’re ever in an auto accident, it’s important to understand the claims process and how to negotiate a claims settlement with your car insurance company.

An auto insurance claim usually begins when you notify your car insurer that an incident occurred and damaged your vehicle. From there, an insurance adjuster will gather information and investigate. If an adjuster approves your claim, they’ll assess the damage and offer you a settlement amount.

It’s important to understand that you don’t have to accept the first offer an insurance adjuster makes. In fact, it may be wise to do your own research to make sure the offered amount is fair and adequate to pay for any necessary repairs to your vehicle and other types of expenses, like medical bills, when applicable. If you believe a settlement offer is lacking, you have the right to question it and ask for additional funds.[4]

Research your car’s value

Before you begin any type of settlement negotiations with an insurance adjuster, it’s helpful to know the fair market value of your car. You can typically find out what your car is worth by:

  • Looking up your vehicle on third-party websites, such as Edmunds or Kelley Blue Book.

  • Talking to multiple reputable mechanics.

  • Researching the prices of comparable vehicles for sale in your area.

If an adjuster’s estimate of your vehicle’s fair market value is less than the estimates you receive, you may be able to use the information you gather to request a higher settlement amount.

Keep documentation

Throughout the claims process — and especially if you plan to negotiate with an adjuster — it’s important to remain organized and keep detailed records of documents that are relevant to your claim. Accident reports, evaluations of vehicle damage, notes from witnesses, repair costs, and medical expenses are a few examples of the types of paperwork you should retain. There’s a good chance you might need this information at some point in the future.

In many cases, you don’t need outside legal assistance to settle a car insurance claim, even if a little back and forth negotiation may be in order to make sure you get a fair deal. But if your situation is complex or you don’t feel comfortable with an insurance company’s settlement offer, it might be a good idea to talk to a trustworthy attorney for guidance.

Situations where an insurance company is acting in bad faith or refusing to pay out enough money to cover your damages might require professional advice.[4]

Learn More: Why Your Car Insurance Is So High

Learn More: Why Your Car Insurance Is So High

Negotiating car insurance FAQs

Whether you’re looking for a new car insurance policy or trying to reduce your current insurance premiums, here’s some additional information about negotiating car insurance.

  • How much does car insurance cost?

    Drivers in the United States pay an overall average of $160 per month for car insurance. But your auto insurance costs depend on the types of insurance products you choose, location, age, gender, driving record, and other factors. It’s wise to shop around and compare rates from multiple insurance companies to make sure you find the best car insurance rates for your situation.

  • What is the cheapest car insurance?

    If you’re looking for cheap car insurance, it’s important to understand that most states require drivers to carry a minimum level of liability car insurance. In general, this minimum coverage is the cheapest insurance drivers can get in each state. But you’ll still need to shop around to find the most affordable insurer in your ZIP code.

  • Can you ask your insurance company for a lower rate?

    Your car insurance company sets your rates according to a variety of risk factors. So insurance rates aren’t negotiable. But you may be able to save money on your current policy in other ways, such as opting for a higher deductible, making adjustments to the type of insurance you carry, taking advantage of discounts, or searching for a better deal from competitors.

  • Can you negotiate a total loss insurance claim?

    When you file an insurance claim — whether the claim is a total loss or otherwise — you have the right to negotiate if you disagree with the settlement amount the insurance adjuster offers you. In fact, it’s important to do your own research regarding your vehicle’s value to make sure an insurance company treats you in a fair manner, especially if your car is totaled in an accident.

  • What determines your car insurance premium?

    Many different factors can affect the price you pay for your car insurance premium. Some of the details insurance companies may consider when setting car insurance rates include your driving record, age, gender, marital status, ZIP code, vehicle type, and credit-based insurance score, as well as the types of insurance and coverage amounts you choose.

Sources

  1. Insurance Information Institute. "What determines the price of an auto insurance policy?."
  2. Insurance Information Institute. "Background on: Insurance scoring."
  3. Insurance Information Institute. "How to save money on car insurance."
  4. National Association of Insurance Commissioners. "What You Should Know About Filing an Auto Claim."
Michelle Lambright Black
Michelle Lambright Black

Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has over 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more. She's also a three-time finalist for the best personal finance freelancer award from the Plutus Foundation. When she isn't writing or speaking about credit and money, Michelle loves to travel with her family or read a good book. You can connect with Michelle on Instagram or Twitter

Sarah Archambault
Sarah Archambault
  • Experienced personal finance writer

  • Background working with banks and insurance companies

Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.

Featured in

media logomedia logo

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