How many times have you logged into one of your credit card or bank accounts and seen a bogus charge or late fee appear out of nowhere? You wanted to call the company right away and have them refund your money, but you had no idea what to say to get the fee waived. So you just let it slide. Time after time.


This is part six in a six part series by financial expert and bestselling author Ramit Sethi. Republished from his ebook Powerful Telephone Scripts, each post will help you negotiate lower fees, eliminate late charges, and master the art of talking to customer service reps. Today: how to optimize your car insurance rate.


Most of us pick our insurance rate once, then never go back again. But if you take the time to do a little research and make a few phone calls, you can save hundreds of dollars each year.

Here's the step-by-step process for optimizing your car insurance rate:

1. Check to see if you have the right amount of coverage. Nobody teaches us about this kind of stuff, so when you bought car insurance, you may not have known which coverage to choose.

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2. Figure out what kind of coverage you current have and how much you're paying. Don't be lazy—do this. If you don't have your current info in front of you, how can you hope to save? Either call your car insurance company or use their website.


3. Start shopping around. I prefer the phone because I can usually sweet talk the rep into telling me about other deals that the websites don't offer. Computers, however, seem to be immune to my charm.

I made it easy for you. Here are the phone numbers of the big insurers:

Geico: 1-800-861-8380

AAA: 1-866-539-8033

Allstate: 1-866-704-9900

Progressive: 1-800-776-4737

State Farm: They offer no phone number! However, you can get to their auto insurance site here

21st Century: Don't use this worthless insurance company. I used to use them, but they sent me multiple envelopes in the mail every single week until I finally canceled them. The rates were great, but the hassle wasn't worth it.


4. Be an expert caller by asking detailed questions. With each call, you should say: "AAA (or whoever) is offering to insure me for $X less (silence)." See what they do. Note: Negotiating lower insurance using this technique is much harder to do with car insurance than banks, so don't expect very much from this.


Now it's time to start digging deep and asking detailed questions to uncover the saving they've been hiding from you. The majority of people won't even know to ask these questions, so you may catch some reps off guard.

Try these:

"How much would I save if I insure my car and house with you?"

"What about renewal discounts? How long have I been a member with you? What can you offer me as a discount for long-term membership?"

"Can I save money by pre-paying my entire year up front?"

"Let's check my car. I know other firms offer discounts for featurs like anti-lock brakes. What about you? What kind of low-mileage discounts do you offer?

"If I enrolled in a defensive driving course, what kind of discount would you offer?

"What about discounts for my employer?" (Tell them the specific name of your employer.)

"Some insurance companies offer discounts for low-risk occupations. What kind of competitive rates do you offer?"

"Am I paying for roadside assistance? What other additional 'benefits' am I paying for?"


If you already pay for AAA, you don't need roadside assistance through your car insurance. Also, check your credit card—they may offer roadside assistance. Just make sure to call them and ask how much it really costs to use it—some offers for "roadside assistance" really mean "we will assist you by calling someone for you and then charging you out the ass."

A Few Other Strategies

Here's another trick. Ask your insurance company: "Can you walk me through any deductible charges that could save me 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 dedectible from $200 to $500 could reduce your collision and comprehensive coverage costs by 15 to 30 percent. 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.


Also, many organizations like AAA, Costco, credit cards, large employers, associations (AARP, teachers' union), and more offer discounts on car insurance. Log into their website and browse to "perks."

Don't forget: Insurance is not a commodity. If you pick the cheapest provider to save $50/year and they end up not fulfilling your claim—which you could have reasonably known by searching out reviews of the company—it's your fault. Pick a good company because it can be worth thousands of dollars.


As you've seen, "negotiating" lower car insurance is mostly about keeping up with the changing rates and making sure you're wringing every last benefit from your policy, so set a calendar reminder to do this once per year.


Powerful Telephone Scripts | I Will Teach You To Be Rich

Ramit Sethi is a New York Times best-selling author who writes about personal finance, psychology, and careers. He was recently featured in Forbes Magazine next to Warren Buffett as one of 20 Wealth Wizards. He also teaches word-for-word scripts to make extra money , lower your monthly bills , and improve your salary negotiation .


Illustration by Nick Criscuolo.

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