How I negotiate lower auto insurance premiums:

I am a part of the Do It Yourself (DIY) crew and it requires the use of a telephone.  If this sounds too scary for the text message or email only generation stop reading right here.  Otherwise please continue.

This is the typical interaction between me and my insurance carrier.

There will be a few exposure questions that my insurer will ask to better understand how I use my vehicle.   I never stretch the details of these questions for fear of denial of claim.

Please note Misrepresentation of my exposure may result in denial of a claim – it’s important for my insurer to appropriately rate my vehicle based upon my exposure, otherwise they might be overly conservative with their estimates and therefore overcharging me.

This is a process I go through every year with my insurance company – which on my personal auto and umbrella is Geico, my homeowners is with Progressive.  I have 3 rental properties using a landlord policy, and contractually require my tenants to carry renters insurance.

Negotiation points:

Each of these points is information that the insurance company asks during the conversation, it is important to understand the importance and how it impacts me and my premiums.

Annual Mileage

How many miles do I drive each year?  This is the question I focus a lot of time and energy preparing for each year, I review and record the changes in mileage on each vehicle to appropriately use as a negotiating tool.

I make sure I come in with the numbers before the call but it’s easy to have a fair estimate of how many miles I put on my vehicle annually. If I wasn’t certain, I try to calculate my weekly mileage and multiply by 52.

Why? The more time I spend on the road each year, the more risk I am to an insurer. “Average mileage” varies, but with most insurers it’s 10,000 to 12,000 annually.

Discounts are often offered if I drive fewer miles, especially less than 7,000 or so. If I drive many more miles than the average driver, my rates will be higher.

Most people don’t carefully keep track of their mileage and don’t realize how little or much they might be on the road.  I recognize this is an area to focus the discussion.


This is one of the questions my insurer will ask.  What is the primary use of your vehicle?

I use my vehicles for pleasure and therefore don’t use them during high traffic commuting hours.  Lowering the probability of an accident.

I am ready to say how I use my vehicle, such as:

  • Commuting to and from work
  • Commuting to school
  • Pleasure
  • Business
  • Farm
  • Artisan

Why? If I am driving my car many miles every day for business, that is a different type of risk for my insurer than a car that sits in a parking lot at work or a pleasure car that sits in the garage a majority of the time.

Since I am using the car for pleasure, I have a good rationale to ask for lower auto insurance premiums.

Driving History

This is the part of the negotiation that varies by driver.  But I haven’t needed to use the insurance and I have been with one insurance company for >5 years so I think I am in a good negotiating position.

Greater than 10 years even better.  However, I don’t stay with an insurer and remain loyal unless its mutual loyalty.  The costs of switching carriers are low for me the customer but acquiring new customers is costly for the insurer.  The insurer should recognize this via good driver discounts.  It becomes a Win- Win for me and the insurance company if good drivers stick around.

I always ask for the good driver discount and if it is being applied.  Also I make sure my defensive driver course discount is being applied.

Anti-Theft or other safety devices

How new is your car? Does your car have the new braking technology? Airbags? Does your car have an anti-theft device?

Knowing that I have an anti-theft device isn’t enough; I usually will need to know what type it is and if it’s active (must arm it) or passive (arms automatically).

I am not a car guys so I check out the vehicle’s manual when I am uncertain.  My insurer should have the details about the safety devices of the vehicle in its systems but it’s important for me to highlight all the safety or anti-theft devices.


I can get a discount on comprehensive coverage for having an anti-theft device. How much of a discount depends on what the device does. If the device can help track my car if it’s stolen, then it’s worth a bigger discount than a simple audible alarm. Devices that work without having to activate them – “passive” devices such as an engine immobilizer – get a bigger discount than “active” devices that require me to install a steering wheel lock or arm an alarm whenever I leave the car.


I tread Carefully in this territory – only experienced Sharks should be adjusting coverage without expert advice.

I review my coverages to make sure I am not over insuring and therefore over paying for limits I will never use.

Reducing coverage is a serious decision and should not be taken lightly, please work with your agent, customer service rep, attorney, accountants, etc. to ensure you are not exposing your net worth by decreasing limits.

  • Liability insurance
    • I always ask myself the questions –  am I over insuring? Am I under insuring and exposing my net-worth?
    • Most insurance professionals recommend that coverage limits be at least $100,000 per person and $300,000 per accident.  This is what I carry on my vehicles.  This may not be enough in certain scenarios, however, when a shark, these scenarios will be protected by my umbrella policy.
      • I were to have a poor driving record (many moving violations, DWI, etc.), some companies may not feel comfortable offering limits this high or coverage at all.  The non-standard market is a different market with different limits available.
      • Depending on the state there are statutory minimums but I recognize this is risky. I am aware of state minimum requirements and understand that I will still be held responsible for any loss above the amount of my insurance.
        • So buying the state minimum requirement is not the course of action for me- especially since I have something to lose.
      • I recognize that not everyone can afford higher limits – they may not act prudently or be in a financial position to act prudent, therefore see discussion about UM/UIM coverage.  I always buy this coverage.
    • This number will have to grow over time as inflation causes things to get more expensive.
    • Some states require less — but less will rarely cover all the bills. California, for example, requires just $5,000 for property damage liability, and most cars are worth more than that.
      • I would be responsible for anything left over – not a position I want to be in.
    • If I ever leased my car?
      • As I pointed out in the umbrella insurance article, the more liability insurance I buy, the cheaper it gets.  Also note, umbrella insurance which is the best deal in the industry will not attach too low.  So I would want to avoid any gap in coverage.  Bad scenario for those keeping score.
      • If I were to lease a car, I would be required to carry to even higher limits than if I owned the car.
  • Comprehensive and collision
    • Since I own my car, I can decide to adjust the comp and collision limits.  On a older car of mine used for work, short trips, transporting building materials with little value, I decided to decrease the limits related to comprehensive coverage, since I don’t need to replace this vehicle.  It has a low likelihood of getting stolen since it is older and I am not concerned with repairing it for vanity purposes.
      • More than 90 percent of owners keep comp and collision on cars less than eight years old; that drops to less than 50 percent at 12 years old.
      • I use the approach of drop comp and collision when I would no longer make a major mechanical repair such as a new engine or transmission, and would donate or sell the car instead.
    • If I have a loan or lease on the vehicle, my lender or leasing company will require me to buy collision and comprehensive.
  • Personal injury protection and medical payments
    • I  buy basic PIP but wouldn’t consider anything less than at least $10,000 in personal injury protection or $5,000 in medical payments coverage.  I don’t spend time negotiating this coverage lower.

Please note if I decided to lower my limits on any particular coverage it can expose my net worth; this is only an example of what I do and not a recommendation to buy or sell in the same fashion.

Even for me, if I do not have enough limit to cover an event or an occurrence and a jury or judge may determine an award an amount above my limits.  This is the worst scenario for anyone and I would be SOL or depending on how big of a loss… bankrupt.

It is important to work with experts to determine realistic disaster scenarios to determine the severity and probability of occurrence.  As was pointed out by a engaged insurance professional, the what if’s for each scenario and how much a loss could be in relation to the limit.

This is of the utmost importance, I am not encouraging anyone to lower their limits to save money on insurance premiums to owe thousands or tens of thousands in uninsured loss.

This is something that consumers must have a basic understood before using the top 5 quote comparison tools.  It’s the premise of the site, without this basic understanding – consumers will be at risk if not well informed.


Auto Deductibles can range from $0 to $2,500, but most drivers choose $500.  I have a $1000 deductible.  As I discussed in my deductible article,  a higher deductible will save money, but it should never exceed an amount I can pay easily out of pocket.   Unless I have a post loss funding plan.  The opportunity costs and savings have a lot of value over time, and can fund the deductible if done correctly with no accidents.

Bundle your Home and Auto

The last step.  I save for the end of the discussion so I can see the impact of all other negotiating efforts.

This step also includes renters insurance.  Even though I don’t rent… Although probably not much of a discount due to the low renters insurance premiums.

This is something I do as a opportunity to save, I currently bundle my auto and umbrella.  I reviewed the bundling impact of my homeowners – but at this point hasn’t produced the appropriate savings.  It may be Geico’s policy on landlord policies or not having as large a risk appetite in my region for homeowners.

Being able to bundle will save money.  I keep it in mind after I have negotiated all other exposures and coverages, so the impact of bundling can be quantified.

In the world of autonomous vehicles these points are subject to change.  I will update as new negotiating tactics become available.

For those readers with an agent or broker, please utilize their expertise to negotiate lower auto premiums.

Comment below if you have other experience “How I negotiate lower auto insurance premiums” using a different technique.  I think we could all benefit.

About the author

Arnold Smith

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