Smart shoppers know that price matching is a good way to secure a good deal on the goods and services you want. From groceries at Wal-Mart to books on Amazon, many items can be purchased at a discount if that low price is offered elsewhere. If this strategy works well for regular household goods, it’s reasonable to wonder whether insurance companies function the same way.

Auto Insurance is one of the most competitive industries in the modern world. As an inelastic good, the demand for insurance rarely moves beyond a fixed number; there simply are not enough new drivers to create much demand for insurers. Moreover, new drivers tend to be riskier to insure than those who are experienced, so most insurance companies are not eager to extend affordable policies to young people. Instead of courting new drivers, most insurance companies focus on ways to lure customers away from a competitor.

Do Rates Really Vary Between Companies?

The amount of variance between insurance companies will depend on several factors. One of the most important factors is the state where the policy is sold. Some states require insurance companies to abide by certain pricing regulations, which in turn keeps their prices fairly static. Other states are much less restrictive about pricing.

Additionally, insurance companies are required to report their rates, which allows others in the industry to see how much other companies are offering and adjust their own prices accordingly. This means that a certain amount of “price matching” is happening behind the scenes for most insurers.

The base rate of most insurance companies is usually fairly standard. What causes the rates to fluctuate from one insurer to the next is variation in the way discounts are applied and risk is assessed. Discounts will reduce the base rate, and risk factors will cause the base rate to increase.

These assessments are not identical from one company to the next. For example, some companies may offer unique discounts, and other insurers may cater to certain demographics more than others. Some insurance companies specialize in offering coverage to high-risk drivers, so insurance for that group of customers may be cheaper among those insurers than through another company.

What Companies Offer Price Matching?

Some insurance companies are more vocal than others about price matching. Progressive, for example, often advertises competitor’s rates on their own site as a way to convince potential customers that they are getting the best deal. Their “Name Your Own Price” program also serves a similar role; by allowing customers to choose their desired insurance price, they can offer competition for any range of competitor prices.

Although some companies make price matching their platform, most insurance companies will adjust their rates when approached with a competing offer. If you receive a lower quote from a competing insurance company, you can approach your own agent to see whether your rates could be adjusted similarly. Just be sure that you inspect the policy carefully when you do this. Some companies may appear to match the price of a competitor while actually offering very different coverage.

Ways to Get the Cheapest Price from Any Insurer

In many cases, if an insurance company is offering you a particularly low rate, it may be because that company has discounts that your normal insurer does not have. Whenever you receive a quote, don’t be afraid to ask why you received the price that you did. This will make it easier for you to approach other insurance companies for a potential price match. If one company is offering a discount for a certain safety feature on your vehicle or a class you’ve taken in the past, any insurer may be willing to extend the same discount.

Some insurance companies offer a discount specifically to customers who switch from an existing policy to theirs. If you explain to your insurer that you’ve been offered a substantial discount from another company, your insurance company may be willing to lower its rates in order to keep your business.

Of course, if your current insurance company is not willing to work with you, it may be time to find a new company. Although the cheapest insurance policy is not always the best choice, it’s never a good idea to stick with a company that won’t make an effort to comply with your wishes. The best insurance companies reward their customers for their loyalty. If you’re not receiving those rewards and can receive a cheaper policy through a different insurer, it’s time to start comparison shopping for the best new deal.