How to lower car insurance — in 4 steps
Step 1: Find how much coverage you need
Most U.S. states — besides New Hampshire and Virginia — require you to get car insurance as well as a certain amount of liability coverage you need.

When it comes to the amount of liability that’s required, you’ll typically need to find coverage in three areas:

Bodily injury (per person). This is the amount that is covered for each person who gets hurt during an accident.
Bodily injury (total). The most an insurance company will cover for bodily injury per accident.
Property damage (total). This does not include your own property. This amount only covers the damage sustained to the property of others.
Though every state requires you to get a certain amount of liability coverage, the full amount of the coverage varies.

Here’s a comprehensive list of car insurance minimum coverage requirements for each state (e.g., Alabama requires $25,000 for bodily injury per person).

STATE BODILY INJURY (PER PERSON) BODILY INJURY (TOTAL) PROPERTY DAMAGE (TOTAL)
AL $25,000 $50,000 $25,000
AK $50,000 $100,000 $25,000
AZ $15,000 $30,000 $10,000
AR $25,000 $50,000 $25,000
CA $15,000 $30,000 $5,000
CO $25,000 $50,000 $15,000
CT $20,000 $50,000 $25,000
DE $25,000 $50,000 $10,000
FL Not required Not required $10,000
GA $25,000 $50,000 $25,000
HI $20,000 $40,000 $10,000
ID $25,000 $50,000 $15,000
IL $25,000 $50,000 $20,000
IN $25,000 $50,000 $25,000
IA $20,000 $40,000 $15,000
KS $25,000 $50,000 $25,000
KY $25,000 $50,000 $25,000
LA $15,000 $30,000 $25,000
ME $50,000 $100,000 $25,000
MD $30,000 $60,000 $15,000
MA $20,000 $40,000 $5,000
MI $20,000 $40,000 $10,000
MN $30,000 $60,000 $10,000
MS $25,000 $50,000 $25,000
MO $25,000 $50,000 $20,000
MT $25,000 $50,000 $20,000
NE $25,000 $50,000 $25,000
NV $25,000 $50,000 $20,000
NH* $25,000 $50,000 $25,000
NJ $15,000 $30,000 $5,000
NM $25,000 $50,000 $10,000
NY $25,000 $50,000 $10,000
NC $30,000 $60,000 $25,000
ND $25,000 $50,000 $25,000
OH $25,000 $50,000 $25,000
OK $25,000 $50,000 $25,000
OR $25,000 $50,000 $20,000
PA $15,000 $30,000 $5,000
RI $25,000 $50,000 $25,000
SC $25,000 $50,000 $25,000
SD $25,000 $50,000 $25,000
TN $25,000 $50,000 $15,000
TX $30,000 $60,000 $25,000
UT $25,000 $65,000 $15,000
VT $25,000 $50,000 $10,000
VA** $25,000 $50,000 $20,000
WA $25,000 $50,000 $10,000
D.C. $25,000 $50,000 $10,000
WV $25,000 $50,000 $25,000
WI $25,000 $50,000 $10,000
WY $25,000 $50,000 $20,000
*(Coverage is optional but this is the minimum if you purchase it)
**(Required if you choose to purchase coverage. If not, you must pay a $500 uninsured motorists fee)
Other coverage options
Aside from state requirements regarding liability, most car insurers will provide five other coverage options. Deciding which ones you want is a matter of personal preference and factors like how old your car is.

The coverages are:

Uninsured motorists. Some states require you to be insured to protect against uninsured motorists. This coverage helps you in the event that you get into an accident with someone who isn’t insured and can’t pay for your car repair and/or medical bills.
Medical costs. If you’re injured in an accident, the insurance company will pay some or all of your medical bills (depending on the coverage and how much the bill is).
Personal injury protection. Like uninsured motorists coverage, some states require you to get this as a minimum. This pays for any medical expenses or lost wages you might encounter due to a collision.
Collision. This coverage typically protects your vehicle against collisions with other motorists or objects. Good if you’re prone to accidentally backing up into the mailbox.
Comprehensive. This coverage tends to cover the whole gamut of things that might happen to your car such as hail, water, and fire damage; if it gets stolen; vandalism; or total destruction. I wouldn’t suggest getting this coverage if your car is already pretty old or isn’t worth much.
As I discussed in my article on how much auto insurance you need, I highly suggest you get collision and comprehensive coverage as well. Along with liability insurance, you’ll be insured against the likeliest of events that will occur to you and your car.

There’s even a good chance you’ll need those policies anyway if you’re leasing your vehicle.

So consider your options and decide what you want out of your insurance coverage. Once you do that, you’ll be ready for step two.

Step 2: Find your current plan
If you don’t have your current plan in front of you, how can you know how to lower your car insurance?

That’s why you need to find out what your current policy looks like. Go digging through the glove compartment for it, check your files, or call your insurance company. This is important information you can leverage when negotiating with your current insurance provider.

At the very least, you need to know how much you’re paying and for what services.

Here are the numbers of the most popular car insurance providers that you can use to call to find out your policy now.

Geico: 1-800-861-8380
AAA: 1-888-883-8417
Allstate: 1-877-810-2920
Progressive: 1-800-776-4737
State Farm: 1-800-STATE-FARM (1-800-782-8332)
By now you should have your policy in front of you. This includes what type of car insurance coverage you have as well as your deductibles and how much you’re paying in premiums.

You’re now ready to begin comparing it with other car insurers.

Step 3: Shop around
To start, you can use a rate comparer tool such as this one to compare quotes from different insurers.

I prefer talking to a rep on the phone, though, because they always tell me about other deals that the websites don’t offer.

When consulting with a rep or looking up quotes online, be sure to find out how much exactly you’ll be paying in these two areas:

Premiums. This is the price you’ll pay for your plan. Typically, insurers offer 6-month and 12-month policies, and provide options for payment plans including paying for coverage all at once, quarterly, or month by month.
Deductibles. This is the portion you’ll pay out of pocket before your insurer pays the rest.
Not many people know this but you can actually lower your premiums by opting for higher deductibles. According to a report from InsuranceQuotes.com, you can lower premiums by 9% by raising deductibles from $500 to $1,000.

This is all a matter of personal preference though. If you’re a good driver and/or don’t typically drive your car often, opt for higher deductibles for lower premiums.

If you’re accident prone, drive a lot, or have kids that plan to learn how to drive soon, definitely opt for the lower deductible.

No matter the case, you should know exactly the coverage you want along with the limits for each. That way it makes everything much simpler to compare.

To help keep everything organized, you can use an Excel or Google Spreadsheet. Here’s a good template to leverage during your search.

Insurance
Once you get a few solid quotes, compare them to what you’re currently paying. You’re going to be able to make a sound argument with your insurance rep as to why you should get a lower rate once you do.

Which brings us to…

Step 4: Lower your car insurance with this script
Now it’s finally time to call up insurance reps — including the one you currently have — and negotiate an awesome deal with scripts.

This is the meat of how to lower car insurance payments.

Before you do that, though, there are two things to keep in mind when speaking to a representative.

Stay polite — but firm. Don’t just call up the rep and scream, “GIVE ME LOWER CAR INSURANCE!!!!” (I’ve tried, it doesn’t end well.) You need to handle the negotiation with finesse and civility — even if the representative is short with you. Nothing throws a wrench into negotiations quite like pissing off the one person who can help you.
This is not a win/lose situation. You can’t just make a demand and expect the person to give it to you. However, insurance companies are willing to offer discounts to make or keep high-value customers. Prepare to make your case as to why you’re such a good customer and you’ll see results.
Keep those two things in mind when you call up the representative and I promise you, you’ll find a great deal.

Renegotiate your current policy
If you already have a car insurance policy but just want to negotiate for better rates, use the following script.

ACME INSURANCE: Hello, Acme Insurance. How may I help you today?

YOU: I’d like to negotiate a policy. [Other insurance company] is offering to insure me for $XXX less for [coverage]. I’d like to know if there’s a better deal from you, please.

Wait for their response. Negotiating with this technique is much harder to do with car insurance companies than banks — but it is possible. If they’re stubborn and try to shoot you down, keep pressing at it. Don’t make it easy for them to say no.

ACME INSURANCE: Sorry, but our rates are fixed at this time and we can’t change it due to [some BS excuse about why they can’t give you a lower rate].

YOU: Well, I’ve been a good driver for X years now and would love a lower rate. What else can you do to help me?

ACME INSURANCE: Hmm, one second sir. I see that you’re a really good customer. I’m going to check with my supervisor. Can you hold for a second?

[hold]

I was able to check with my supervisor and can lower that policy by X%. Does that work?

Getting a response like that is the best-case scenario. However, there might be the chance that they deny you a discount based on this tactic alone. If this happens, I suggest you do the following:

Don’t stop until you get a yes. Persistence is integral in negotiations. If you keep at it and make a strong case, they’ll be backed into a position where they’ll want to give you what you want.
Try again later. Like the Magic 8-Ball says, sometimes you just have to try again later. If the first car insurance rep keeps shutting you down, thank them for their time, hang up, and dial again for a new rep. This one might be a little more amenable to your suggestions.
Refocus your negotiations. If they won’t give you a discount because their competitors are offering better rates, don’t worry. There are still other ways to get fantastic deals — which I’ll go into in the next section.
This isn’t the only way to get a lower car insurance rate, though. By asking certain questions, you’ll be able to unlock deals you didn’t even know existed.

Negotiate a new policy
You might be searching for your first car insurance policy ever. Or you might be looking to see what’s better than your current one.

No matter the case, it’s time to start digging deep and asking detailed questions to uncover the savings these companies have hidden from you. The majority of people won’t even ask questions like these, so reps will be caught off guard — giving you the advantage.

First, you’re going to want to start the same as above. Here it is again.

ACME INSURANCE: Hello, Acme Insurance. How may I help you today?

YOU: I’d like to negotiate a policy. [Other insurance company] is offering to insure me for $XXX less for [coverage]. I’d like to know if there’s a better deal from you, please.

If they shoot you down, remember you can always:

Reiterate the fact that you want a better deal and keep persisting.
Hang up the phone and call back to negotiate with a different rep.
If one insurance company refuses to budge after three to five calls, change course and call a different one on your list. Rinse and repeat until you have a lower insurance policy.

10 scripts for lowering car insurance
If you get the lower rate — or even if you don’t — you can refocus the negotiations and start asking for the hidden deals that many car insurers don’t tell you about.

Here are 10 good scripts to ask to uncover those gems:

“How much would I save if I insure my car and house with you?” Some insurers will discount you if you insure your house through them as well as your car.
“What about renewal discounts? What can you offer me as a discount for long-term membership?” Reminding them of the fact that you’re looking to be a longtime customer goes a long way in ingratiating yourself to them.
“Can I save money by prepaying my entire year up front?” Many insurers will offer huge policy discounts if you prepay for an entire year.
“Let’s check my car. I know other firms offer discounts for features like anti-lock brakes. What about you?” Not many people realize this, but many car insurance companies will offer better premiums if your car has safety features such as anti-lock brakes, airbags, and four-wheel drive.
“What kind of low-mileage discounts do you offer?” If you find yourself taking the bus or biking to work more than you ever drive, you might qualify for a low-mileage discount with car insurance companies.
“If I enrolled in a defensive-driving course, what kind of discount would you offer? Oh, really? Which courses qualify?” Car insurance companies want you to be a safe driver. That’s why some are willing to discount you if you take a course aimed at making you one.
“What about discounts for my employer? (Tell them the specific name of your employer.)” Some employers partner with car insurance companies in order to get great rates for their employees. Check to see if your company does this.
“Some insurance companies offer discounts for low-risk occupations (engineers). What kind of competitive rates do you offer?” Insurance companies take a look at many things when it comes to determining your rate — including your employment. After all, a NASCAR driver is probably going to have higher rates than a CPA.
“Am I paying for roadside assistance? What other additional benefits am I paying for?” Many times, you don’t need certain benefits such as roadside assistance (if you’re in AAA, you already have it). In fact, many credit cards offer roadside assistance as well. Getting rid of these “benefits” could give you a good discount.
“Can you walk me through the deductible changes I could make to save money?” Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30%. Going to a $1,000 deductible can save you more than 40%. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.
Learning how to lower your car insurance seems like a lot of work — and it is.

But this is the work that 99.9999% of people out there won’t do, which means your returns can be substantial if you do them.

Try some of these tactics out this week and let me know what you find in the comments.

Beyond car insurance negotiations
If you couldn’t tell already, I LOVE negotiations — mostly because I got it from my parents.

I remember my dad once dragged me with him as he spent an entire week negotiating at a dealership on the price of a car.

After many days of back and forth with our salesperson, they finally reached a price they could agree on. BUT as he was literally about to sign the contract, he asked the dealership to throw in some extra floor mats.

They said no.

And he walked away.

An entire week’s worth of bargaining them down to an incredibly fair price, only to walk away when they didn’t give him something he could have bought for less than 50 bucks at Target.

What’s my point? Two things:

My mom and dad are incredibly Indian.
You have to be stubborn to be a good negotiator.
I’m a big believer that negotiations can open up HUGE savings for you.

That’s why I want to give you something that’ll help you save and earn more money through negotiations and other proven systems: The Ultimate Guide to Personal Finance.

The money you save on lowering your car insurance is great, but it’s small compared to everything you can save when you optimize your personal finances.