Questions You Can Ask Right Now to Lower Your Auto Insurance Premium

10 Questions You Can Ask Right Now to Lower Your Auto Insurance Premium

If you won't be driving as much this year, call your car insurance company and let them know. You might be able to reduce your payment right away.

Your annual mileage is a factor in how much your car insurance costs, and because driving has decreased significantly since the beginning of the COVID-19 pandemic, you may be overpaying your auto insurance premium, according to several experts.

“Let's say your annual mileage was 12,000 last year and is now only 8,000 this year — that's a significant change,” says Laura Adams, an insurance expert and host of the “Money Girl” podcast. “Let them know you're driving fewer miles, and you should be able to pay less.”

Any individual relief you may receive in this manner would be in addition to the reductions that companies implemented for everyone at the start of the pandemic. According to consumer advocates, these reductions are insufficient in comparison to what companies are saving, and insurers could do better for their customers.

According to data from the National Highway Traffic Safety Administration, Americans drove 264.2 billion fewer miles in the first half of 2020, a 17 percent decrease from the first half of 2019. When there are fewer cars on the road, there are fewer accidents, and insurance companies profit by not paying for accidents and other claims.

According to a recent statement from the American Property Casualty Insurance Association (APCIA), a trade association for insurance companies, insurance companies will return about $14 billion in refunds and credits to auto customers in 2020 because people are driving less.

However, according to a state-by-state analysis by the U.S. Public Interest Research Group, a consumer advocacy organization, insurance companies have benefited financially from fewer claims but have barely compensated customers since the pandemic began. COVID-19 relief varied by state and insurer, but the majority of insurers returned less than half of a month's average premium, according to the report. (According to the report, State Farm, GEICO, and USAA provided “better” relief than other insurance companies in many states.)

“When people are struggling financially, every dollar counts,” says Jacob van Cleef, a consumer watchdog associate with the organization. “When you add up what insurance companies were willing to give back, it was underwhelming, to say the least.”

According to several experts we spoke with, more collective relief from insurance companies is unlikely, but insurers may give you a discount to keep you as a customer if you ask.

“Insurers will continue to work with policyholders to adjust their policies in 2021,” APCIA vice president Mark Sektnan says in a statement. “Policyholders are encouraged to communicate any changes in their driving habits to their insurer in order to discuss premium adjustments if those changes have not already occurred automatically.”

That is why now is the ideal time to take the initiative and request a lower car insurance premium if you drive less — or, at the very least, a discount or two that isn't based on mileage. Jannese Torres-Rodriguez, a personal finance expert and the host of the “Yo Quiero Dinero” podcast, says she simply logged into her insurance company's online portal, updated her yearly mileage, and saw immediate savings.

“I thought, ‘Why am I paying for 15,000 miles of coverage a year when I'm driving less than 5,000 miles now?'” Torres-Rodriguez says. “I believe there is a lot of wiggle room here. Obviously, it is up to the insurance company, but the last thing they want right now is to lose your business.”

We've got you covered if you're not sure what to say or where to begin.

How to Ask for a Lower Auto Insurance Premium

According to Torres-Rodriguez, a good place to start is by informing your insurance company of your goals.

First, see if you can manage your auto insurance policy online without making a phone call. However, if your only option is to contact your insurance company and negotiate, there are four things to keep in mind when speaking with them:

• Stay polite — but firm. Do not contact your insurance company to request a lower auto rate. Even if the initial response is negative, you must enter the conversation with logic and civility. 
• Prepare to make your case for why you want a lower rate, whether it's because you drive less, are financially strapped, or for another reason.
• According to several experts we spoke with, any discounts you receive will most likely be prospective. That means that any money you've already paid toward your auto insurance premium will most likely not be reimbursed.
• Investigate competing insurers' rates, and if they are lower, include that information in your pitch.

If you already have auto insurance but want to get a better rate, say the following:

• Hello, my name is ____ and I’ve been a policyholder with you since [date]. My circumstances have changed, and I now believe that I am overpaying for auto insurance each month. I'd like to reduce my auto insurance premium due to [reasons, such as lower mileage, financial difficulties, etc]. I looked into other insurance companies to see if they could insure me for less money for the same amount of coverage. What options do you have for me to continue being your customer while also saving money on my end?

As the conversation progresses, ask detailed questions to uncover any potential savings you aren't aware of. “You can definitely have multiple discounts,” Torres-Rodriguez says. Here are ten questions you can ask your auto insurer in order to reduce your premium:

1. Are you providing any financial assistance to people who are struggling financially during the COVID-19 pandemic, such as extended grace periods, waivers of late fees and penalties, or payment plans?
2. Do you provide low-mileage discounts? If that's the case, how do I qualify? (Mileage regulations vary by state and insurance company, but many insurers provide low-mileage discounts to people who drive fewer than 5,000 to 10,000 miles per year.)
3. How much money would I save if I combined my home and auto insurance policies with you?
4. What about customer loyalty or renewal discounts?
5. Is it possible to save money by paying my entire annual premium in advance?
6. Do you provide discounts for safety features such as anti-lock brakes or airbags?
7. Can I get any safe driver discounts?
8. Do you provide any discounts for employers? (Inform them of your employer.)
9. Am I paying for extras such as roadside assistance or accident forgiveness?
10. Can you walk me through any changes to my deductible that I could make to save money? (By requesting a higher deductible, you can significantly reduce your monthly costs. However, raising your deductible only makes sense if you have enough money set aside to pay it when you file a claim).