Want a better auto insurance rate? Just ask

Red car on coins

I'm the kind of person who will tell the waiter he brought the wrong order, the girl who will make an offer instead of automatically paying whatever's marked.

But it didn't occur to me that I could ask big corporations -- utilities, insurance and so forth -- for a better deal.

Until, that is, I got an offer in the mail from a different telephone company. The price was substantially better than what I was paying, but I didn't fancy the hassle of switching my service provider.

So I called my current telephone company. Sure, they said. They'd be happy to match the other company's offer. In fact, they'd beat it.

I had stumbled upon a little-known fact.

Big companies can often make you a better offer. In fact, they might be extending lower prices right now to customers who are exactly like you.

But they're not going to call and tell you about it. You have to call and ask.

The New York Times wrote about this phenomenon in the tale of Thomas Mitchell, an Arizona retiree who did some shopping around when AARP nudged him to call The Hartford for a car insurance quote.

Mitchell called.

The Hartford offered him the same coverage for half the price he was paying Liberty Mutual. When he reported this news to Liberty Mutual, it beat The Hartford's price, taking Mitchell's annual auto insurance premium from $2,537 to $1,207.

Mitchell was understandably irked that Liberty was willing to offer him a cheaper policy but hadn't bothered to tell him so.

But once you've signed up for coverage at a certain price, auto insurance companies aren't under any obligation to tell you if a better deal becomes available.

In fact, it's tough to know if you're getting the best deal in the first place.

Shop around for auto insurance, and you'll see that it's easy for one provider to post a quote that's half the price of another, even within the same insurance group.

An insurance rate is based on the insured person's age, gender, marital status, education, credit score, car type, occupation, location, the amount you drive in an average year and your driving record.

How much a salesperson takes in commission -- an average of 8.5% -- also matters.

Keep in mind, too, that not all coverage is equal. You'll pay more to get more coverage, obviously.

Most states (all but New Hampshire) require that drivers carry a minimum amount of liability insurance, which pays for the other driver's medical costs, car repairs and other costs if the policyholder is at fault in an accident.

Drivers typically choose to buy more coverage, however, to limit their out-of-pocket expenses in case of an expensive accident.

Cheaper auto insurance will do you little good if you can't wrench a check out of your carrier, so you should also consider a company's reliability and credit rating.

The National Association of Insurance Commissioners can help you figure out how much insurance your state requires and which auto insurance companies have the best credit scores and consumer satisfaction ratings.

So go talk to your insurance company.

Call your telephone carrier, your cell phone company, your home insurer and your life insurance provider.

Don't talk to an agent. Go directly to the company, either by telephone or in writing, if you feel like documenting your results, which is never a bad idea.

Mention that there's a lot of competition for your business, and ask if they can make you a better offer than what you're getting now.

The worst they can say is no.

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