Most people may be under the impression that there is really no difference in what you pay for auto insurance from company to company. While it is true that average rates stay within the same range within a particular area, it is possible to cut costs and save money by applying certain principles to auto insurance negotiation. While people living in an expensive area, such as New York or Florida, will not be able to receive rates as low as those living in cheaper states, they can implement certain principles in order to get a policy that is significantly less than what their neighbors are paying for the same or similar coverage.
It’s All About Competition
Almost every industry is affected by the principles of competition. This basically means that the more options that a person has for a product or service, the lower the price should become. With many companies competing for the same market share, economic incentives are given in order to attract the most consumers to their offering. As a customer, it always pays to take advantage of the principle of competition. Never take the first quote or policy that you are shown.
Compare Between Several Providers
Understanding competition can be a big part of any auto insurance negotiation. When negotiating for the best priced policy, begin by visiting at three online websites that issue an insurance quote. These are fairly easy to find. Most advertise on radio, television and the Internet. Just select three that are well known. You won’t necessarily be using these to actually purchase a policy. During this part of the process, you will be focusing on gathering information.
Compare Apples to Apples
The main thing to keep in mind during your comparison shopping is to make sure that every policy that you look at has the same or similar features. If one quote is issued with a comprehensive policy and another gives you the rate for liability coverage only, it is not a direct comparison. Adjust the parameters so that the information you obtain can easily be used for negotiating car insurance rates. Also, keep in mind that the average rate paid for Americans is around $800. Prices can go as low as $500 and as high as $1,100, so know what is normal for your particular area.
What Do You Need to Share?
When using an online form, it can be tempting to change information or leave out important things that appear on your record. Really, there is no advantage to doing this. While this may cause the form to spit out better numbers, they really don’t mean anything unless you have been completely honest during the online interview. No company issues a policy without checking all the information against public records and verifiable data, including the driver’s license division and highway patrol of your state. Entering incorrect information may look good on paper, but it will lead to surprises when a final policy is given. Nobody is on the other end judging what you type in. Instead, it is necessary information that is used to determine your risk. You need to know what is on your record to negotiate effectively.
What to Do With the Quotes?
At this point, you should have three quotes in hand from different online car insurance providers. You can use these for auto insurance negotiation in one of two ways. First, take what you have found to your current car insurance provider. Competition is fierce in the field and your insurance agent will not want to lose your business. Show the agent what you have found out with your quick online search and ask them to do better with your current policy. Ask for specific discounts that you may not be taking advantage of, including having a safe driving record, participating in a car pool and even moving to a safer area. If you have been rebuilding a poor credit rating, ask them to adjust your rate to reflect those better numbers.
If you are unable to shave anything off your existing policy and have those lower numbers in hand from your comparison shopping, don’t be afraid to walk away and go to a new company. As long as the coverage is the same, there’s really no need to stick to what you have always used. Besides, just knowing that you are serious about walking away can bring negotiating for better rates to a more serious level. While it can be nice to have hands on service, the reality is that most of the paperwork and claims process is accomplished via computer and it really doesn’t matter what office the claims go to.
You Will Probably Have to Ask
The biggest mistake that most consumers make when beginning auto insurance negotiation is not regularly checking and asking what discounts and credits they qualify for. Unless you ask, these won’t automatically be applied to the price of your policy. Usually the only discounts that are given without much effort are those associated with age. All others require a small to moderate amount of effort. Some can be obtained just by asking. After a quick internal check to determine what the qualification parameters are, your agent can cut costs. Others, such as a safe driving course, must be proven by you. Ask how to qualify, fulfill the requirements and bring in the paperwork to verify that. Most people don’t take the time to do these things, but they can save a significant amount and are the best ways to negotiate better auto insurance rates.
Like anything that is worth doing, negotiating a better price for auto insurance takes a bit of time and effort. However, that small investment can pay off big when you get that bill. Knowing how to go about the process and what to ask for gives you much more power. Don’t be afraid to go the extra mile to ensure that you haven’t missed a single legitimate strategy to save money and negotiate effectively.
Tags: Auto Insurance, comparison shopping, gathering information, insurance quote, liability coverage, negotiation
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