Bill Negotiation Guide

How to Negotiate Car Insurance


As bill negotiation experts, we’re frequently asked to negotiate car insurance. It’s a major monthly bill—at $1,470 a year on average, auto insurance is most Americans fifth largest household bill. And, since we like to give out advice for free, people often ask us how to negotiate their own car insurance. But the first question is really: can you negotiate car insurance?

The answer is: No. Not really. But you can still save money.

First, the bad news: in the United States, legally, car insurance is non-negotiable. Negotiating your car insurance isn’t like negotiating your cable bill, where you can just call and haggle a lower rate. Insurance providers won’t, and can’t, negotiate with you.

Fortunately, there’s good news too. In practice, there are several ways to save money on car insurance.

There are basically three ways to save money on car insurance:

  1. Changing your car insurance provider.
  2. Adding discounts with your current car insurance provider.
  3. Changing coverage from your current car insurance provider.

Adding discounts on your car insurance is the closest thing to “negotiating” it, but it’s still not technically negotiation. We’ll explain why later. At the end of the day, the only way to significantly lower your car insurance rate is to shop around to different providers. So, if you want to skip right to the end, we’ll start with using to get car insurance quotes. is a cutting-edge insurance start-up that’s the easiest way to get quotes from over 40 carriers without getting spammed. On average, people who use for their insurance save over $800 a year by comparing rates. Plus, the app will do all the paperwork for you if you do want to switch.

So, you want to do it right. Let’s say you want to understand why there’s not a simple question to “how to negotiate car insurance?” First, you need to understand whether car insurance is something you can negotiate at all. In this post we’ll explain why you can’t negotiate insurance for your vehicles. Then, we’ll explain what you can do to lower your car insurance anyway.

Why can’t you negotiate car insurance?

Car insurance, like all insurance, is a heavily regulated industry. While there are (generally) no federal regulations surrounding car insurance, each state has their own set of rules. And almost all state laws, prohibit “rebating.” Here’s how that (generally) works:

Insurance Regulation

Insurance companies have to file with each state they do business in. In 42 of those states, insurance carriers must file the specific rates they charge with the state. Then, they’re required to actually hold to those rates. Which means they have very specific rules for how they can charge for insurance.

If they say ahead of time “we charge $X for this specific kind of car, with this specific kind of driver, with this specific level of coverage” then they’re required by law to charge that. They have to write you a policy that includes that pricing, and they can’t alter that pricing unless one of those factors changes.

Insurance Rate Example - Geico Missouri Car/Auto Insurance Negotiation

Here’s an example of some of the policies from one provider in one state.

This is about a fifth of a page. There are 157 pages. For this one provider. For this one kind of policy. In this one state.

It’s very specific.


And generally speaking, this is a good thing. States with heavier insurance regulation generally have lower pricing than less regulated states. Over the last three decades, insurance premiums have risen nearly 60%. In California, the state with perhaps the most stringent insurance regulations, they’ve dropped 6%.

Anti-Rebating Rules

As part of those regulations, most states explicitly forbid “rebating.” More simply, that means they’re not allowed to give you a discount off the official rate. The reason for that is to ensure that insurers charge everybody the same price.

Here’s an example of an anti-rebating statute from Mississippi:

No such insurer or employee or agent thereof shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance or after insurance has been affected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance.” (Emphasis added)

So, basically, that law says: insurance companies aren’t allowed to give you discounts.

Of course, that varies state by state, but generally the rules are the same. Wyoming is the only state that doesn’t have a regulatory system for insurance. So, if they want to provide insurance, they’re generally going to need a no-rebate policy.

It’s looking like this may possibly change in the future, to make the insurance industry more like the cable/internet industry. Major national insurance associations are pushing for a review of these regulations to allow rebating in certain circumstances.

A draft bulletin for North Dakota would allow insurance companies to offer discounts if it would “mitigate loss or provide loss control.” In practice, this would make insurance like your cable bill: in order to get a good rate, you have to call and threaten to cancel. If that happens, you’ll be able to truly negotiate car insurance—for better or worse. But for now, that’s just a proposal.

As it stands, you can use every negotiating trick in the book, and they’re not going to give you a straight up discount because it’s illegal. Okay, things aren’t looking good. How to negotiate car insurance? You can’t. But don’t give up. There’s hope.

How to Save Money on Car Insurance

Okay, so you can’t negotiate insurance. Big deal. You can still get a lower rate. There are three ways to do this: shopping around, adding discounts, or changing your current coverage with your same provider. In order to make sure you have every available option for alternatives to negotiating car insurance, we’re going to tackle these one at a time.

Shopping for lower insurance

Of these, your best chance for major savings is changing providers. The problem is that it’s generally been a big hassle in the past and many people are loyal to their insurance provider.

In the old days, the way this has worked is: you call up your insurance broker, who either only se