A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 19, 2021

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Important facts to know...

  • You can haggle over the sales price of a car, but you can’t technically haggle over the cost of insurance
  • All auto insurance companies are supposed to have only one base rate available to drivers who fit a certain profile
  • You can’t negotiate the cost of insurance through a provider, but you do have the power to shop around
  • There’s a long list of different providers that sell insurance in each state, and they all have their own rates
  • You need to know how you’re rated by an insurer so that you can take advantage of the most cost-effective ratings

When you’re buying a car, your intentions are never to walk on the car lot and offer the salesman the total price for the first car you test drive. But, as the savvy car buyer that you are, you’re aware that the sticker price on the vehicle’s window is inflated.

Cars are priced so that there’s some room for haggling and so the car buyer can talk the price down, and the dealership can still profit. The better the negotiator you are, the better deal you’ll get.

Unfortunately, those negotiation skills you use to talk down the price of the car you purchased can’t be used to talk down the cost of the insurance you must buy to cover it.

When it comes to auto insurance, haggling isn’t a term that’s going to be thrown around.

Before you assume that you’re going to find affordable insurance by being a skilled negotiator, you need to understand how car insurance works.

You can find the lowest rate possible by comparing car insurance side-by-side. Enter your zip code above to get started.

Why aren’t insurance premiums negotiable?

You will never see an auto insurance carrier advertising negotiable rates because some of the many terms off-limits in the insurance industry are “negotiable” and “haggle.”

You can’t talk down any auto insurance rate through any carrier without making some sort of change to your policy because when a rate is set, it is offered to everyone. So the only way to save would be to make changes to your coverage or the way you’re rated.

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Why do some carriers charge different rates?

If you can’t negotiate your auto insurance rates, it’s hard to believe that you have any power shopping the market when you’re an auto insurance consumer. Your power doesn’t come in the form of negotiating.

In this instance, your power comes in the form of shopping around for insurance through other providers who are competing with your current insurer.

Insurance companies are all prohibited from negotiating with their applicants to offer them better deals. But, while they can’t lower their rate to entice a specific consumer, they can offer lower rates than the competition by filing more competitive rates through the state.

It also helps to offer customers a huge menu of different discounts.

State officials must approve all insurance rates first, but they will be approved as long as the rates are reasonable. Filing lower rates than the rest are how insurers compete. Shopping around is what gives you, the vehicle owner, the most shopping power.

Why do some drivers pay more than others with the same carrier?

If insurance companies set their own rates and no negotiations can take place, you might ask yourself why you’re paying more than your brother for similar coverage through the same carrier?

Insurers have to charge everyone the same base rate, but personal factors will drive rates up or push them down.

Personal auto insurance factors are essential because they help the insurer dictate how much risk you will be. 

If you fall into a risk category for a specific factor, it tells the insurer that you’re more likely to have an accident than someone else in a different demographic. The more risk adds up, the more your premiums add up as well.

What are the common personal risk factors used?

Most risk factors used to underwrite auto insurance policies are universal across the board.

Some of the factors, like driving history, are understandable. Other factors might not seem like they matter so much. Here’s a list of what types of personal information are affecting your premiums:

  • Age
  • Gender
  • Marital status
  • Vehicle type
  • Vehicle safety ratings
  • Credit-based insurance score
  • Annual mileage
  • Vehicle usage
  • Violations for each driver
  • Claims history for each driver
  • Garaging zip code

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Factors That You Have Control Over

Some of the rating factors that are used are beyond your control. For example, there’s nothing that you can do about your age and your gender, but there are still ways that you can take control to find a lower insurance rate.

Here are some of the factors to consider as you’re building your policy:

  1. Vehicle Type – The year, make, and model of your car is critical. Before you shop for a car, look up how cars perform in highway safety road tests. Vehicles that perform well often carry lower rates.
  2. Vehicle Usage – It’s not just what you drive; it’s also how you drive. Where you’re driving and how many miles you put on the car will genuinely impact your rates. If there’s a way for you to avoid commuting, or you can keep your annual mileage down, it will save you money.
  3. Driving History – You can only get experience credits by getting experience behind the wheel and demonstrating that you’re a safe driver. If you’re cited, you should always take traffic school to make the citation invisible to insurers so that you won’t lose discounts.

Trying to negotiate with an auto insurance sales agent isn’t going to work. However, you can still ask for discounts and look for the best rates from other carriers. One way to compare rates would be to contact insurers directly for quotes.

The more effective way to get quotes is to compare rates online. Use our online quote tool, and you’ll be able to compare rates quickly.