Will car insurance companies price match?

The way consumers shop today is drastically different from the way they shopped just 10 years ago. Young adults are capturing the interest of many companies because they spend approximately $200 billion each year and are more willing to purchase products from small businesses and online retailers.

Consumers of all ages are also spending more time researching products and services before they make a purchase, and that includes comparing prices from all available retailers and service providers.

For instance, one industry report from comScore released in 2014 revealed a growing trend toward online auto insurance shopping.

From 2011 to 2014, the number of consumers indicating that they were likely to purchase car insurance online increased approximately five percent.

Since this trend is reflected in all consumer markets, many retailers have adopted price matching policies in an attempt to retain loyal customers.

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Why won’t car insurance companies match prices?

When you fill out an application for car insurance, the company must look at a long list of factors in order to determine how likely you are to file a claim.

This starts with your driving history, but it also includes many other factors related to your lifestyle, behaviors and personal qualities.

For instance, crime rates in your neighborhood will determine your likelihood of filing claims for car theft or vandalism.

Each insurance company determines the exact equation they use to generate rates, and they all weigh the factors differently.

The variety of quotes that you receive when comparing insurance prices online is a result of companies using their own formulas to assign risk.

When you ask a company to match the price of a competitor, you ask them to use that company’s risk evaluation over their own.

Insurance companies do follow state guidelines when it comes to revealing how they determine rates, and they can see what other companies are reporting.

Consumers also have the freedom to select their insurance carriers. These factors do stimulate competition in the industry, but it doesn’t come in the form of direct price matching. Instead, they offer discounts to encourage customer loyalty.

Read More: Compare Best Car Insurance Companies That Beat Quotes

Competing through Car Insurance Discounts

Complete an online comparison search to obtain quotes from at least a few companies. You can then call up one or more of those companies and ask what your options are for lowering your quoted rate.

While they won’t overlook the risk that they have assigned to you as a driver, most companies have at least a few discounts for which you may qualify.

If you tell them that you received more affordable rates from their competitors, they may work a little harder to help you qualify.

Here are a few discount options:

— Switch Discounts

While car insurance is required for drivers in most states, statistics show that the number of consumers shopping for insurance is decreasing year by year

Many adults tend to do their research and then continuously renew their policies without comparing for better deals. They may go years without even thinking about switching to a new policy.

As a result, insurance companies often offer programs that entice consumers to switch from other companies. Study the programs offered

Study the programs offered by several companies, and then select the one that will benefit you for the longest period of time. Some discounts expire as soon as you renew your policy.

— Organization Discounts

If you’re a member of some select automobile-related organizations or clubs, you may receive a slight discount on your insurance rates.

You have to determine whether paying for an organization membership is worth the investment when compared to the discount you may receive.

— Bundle Discounts

If an insurance company offers renter or homeowner insurance as well as car insurance, you can often get a discount just by taking out policies for your home in addition to your vehicle.

You have to consider what you are currently paying for renter or homeowner insurance to determine if this is a valuable discount for you or not.

— Equipment and Safety Discounts

Many companies now offer discounts to drivers with safety equipment installed in their vehicles.

For instance, you may receive a discount if you have an alarm system or buy a new car with OnStar.

Some companies also offer discounts after you complete a defensive driving course. Others may send you a bonus check or reimbursement if you go a specified period of time without filing a claim.

— Limited Distance Discounts

If you don’t have a long commute time for work and don’t put too many miles on your vehicle, you may qualify for a discount based on a lower frequency of travel.

Many insurance companies won’t advertise this type of discount even if they have a policy in place.

Lower Car Insurance Rates Start Online

When you contact an insurance company, start the conversation by stating that you have received more affordable quotes from other companies online. (For more information, read our “Is it cheaper to purchase car insurance online?“).

Ask for the determining factors that were used to settle on your quoted rate.

It may help to research the discounts offered by the company before you make the call so that you know which ones you are qualified to secure.

This gives you more leverage during the negotiation of your best and final rate.

Start comparing car insurance rates now by entering your zip code in our FREE tool below!

Case Studies: Exploring Car Insurance Pricing Dynamics

Case Study 1: Jack’s Negotiation Success

Jack, a diligent shopper, decided to compare quotes from multiple car insurance companies online. After receiving several competitive offers, he contacted his current insurance provider to negotiate a better rate.

Jack informed the insurance company about the lower quotes he had received and expressed his willingness to switch if they couldn’t match or beat the price. The insurance company, understanding the value of customer retention, offered Jack a discount to retain his business.

Case Study 2: Sarah’s Discount Hunt

Sarah, an experienced driver, was determined to find the best car insurance price. She used an online comparison tool to obtain quotes from various companies. While reviewing the quotes, Sarah noticed that one company offered a lower rate compared to her current insurer.

Instead of immediately switching, Sarah called her current insurer to discuss the competing offer. Although her insurer couldn’t match the price, they offered Sarah other discounts and incentives to encourage her to stay.

Case Study 3: Michael’s Bundled Savings

Michael, a homeowner, recognized the potential for bundled savings. He found an insurance company that offered both car and homeowner insurance. By combining his policies with this company, Michael could take advantage of a discounted rate for his car insurance.

To make an informed decision, Michael compared the bundled rate from the new company to his existing policies with separate providers.

Case Study 4: Emily’s Safe Driver Discount

Emily recently completed a defensive driving course and wanted to explore potential discounts. She contacted her current insurer and mentioned the additional safety training she had completed.

Recognizing Emily’s commitment to safe driving, her insurer offered her a discount for completing the course. This discount, combined with other factors, contributed to a lower rate for Emily’s car insurance.