Auto insurance is something every driver needs, but this doesn’t mean you have to break the bank to get coverage. To keep your premiums affordable, you should look into what kind of car insurance discounts your provider offers. Car insurance discounts can help save you quite a bit of money on your insurance policy. There are over a dozen common car insurance discounts. Many of them you may not even realize you are eligible for. Reviewing and understanding car insurance discounts is crucial when you begin shopping for insurance. This tell-all guide can assist you with the process as it highlights the different types of discounts and exactly how much you could be saving.
Categories of Car Insurance Discounts
Car insurance discounts fall into five different categories, each of which applies to a different aspect of an insurance policy. They can relate to either the driver themselves, their vehicle, or their policy:
- Driver safety discounts
- Policy discounts
- Driver status discounts
- Vehicle auto insurance discounts
- Usage-based discounts
Types of Car Insurance Discounts
Car insurance companies give you numerous opportunities to save money using discounts. Discounts are very valuable and can assist you greatly with being able to afford good insurance coverage. Outlined below are some of the most common car insurance discounts you will come across when shopping for coverage. It is important to understand them so you are not missing out on any potential savings.
Also, keep in mind that what is explored in the following sections are just rough estimates for how much you could be saving. How much of a discount you are quoted may be higher or lower than what has been described here.
Safe Driving Discounts
Safe driver discounts are rewarded to those with good driving habits like wearing a seat belt, low driving speeds, mindful braking, among other things. So long as you are acting responsibly behind the wheel of a car, you can receive a break on your liability and collision premiums. You may see discounts around 10% or even higher, depending on the company and your driving habits. Some insurers do not differentiate between safe and good-driver discounts, which will be explored in a later section. They are similar, with some tweaks and requirements varying between insurers.
Accident-Free (Good Driver) Discount
A couple of national insurance companies, along with many others, offer good-driver discounts if you have been accident-free for three to five years. Accident-free, or good driver, the discount is usually applied automatically but do not freak out if you don’t qualify for it right away. At the time of your policy renewal, you can ask about it if you have accident-free for the specific time period. Good driver discounts typically range anywhere from 10% to 40%. What is defined as a “good driver” can vary from one company to another, so be mindful of that when signing up for a policy.
Defensive Driving Discount
Some insurance providers offer discounts if you take an approved defensive driving course. This may only apply if you are at least a certain age but could still be worth looking into. It’s a fairly simple way to save around 5% to 15% on your liability, collision, and personal insurance coverages. These courses teach you a plethora of valuable driving tips like how to be mindful of risks on the road, traffic awareness, and navigating in extreme weather conditions. To receive this discount, you tend to have to provide proof of completion. This discount may be applied when getting a quote if you have already completed a course.
Low Mileage Discount
Not using your car very often could save you some money on your insurance. A number of insurance companies provide discounts for drivers who drive less than 7,500 miles annually. How much you will save and requirements may vary by company. On average, you can receive a discount as high as 20%. Keep in mind that in order to qualify, you may have to sign up for vehicle monitoring technology so your provider gets an accurate understanding of how much you drive.
Good Student Discount
If you or a student driver living in your house is enrolled full-time at a high school or college and gets good grades, you may be eligible for a good student discount. In order to receive the discount, not only do you have to be a full-time student, but companies require them to maintain at least a B average and be between the ages of 16 and 25. Good student discounts can be very valuable, with the average savings as high as 25%. In order to receive this discount, you will need to submit a transcript to your insurance provider.
If you’re a parent with a teenage driver under your policy, you may be able to get a discount once they go off to college and no longer have regular access to their vehicle. If your child left their car at home and is at a college more than 100 miles away, you could receive a discount. This is due to the fact that they aren’t using the vehicle as much and tend to only have access to it on school vacations and holidays. This discount can result in a significant break on your premiums, with savings being as high as 25%.
Senior Driver Discount
Drives age 55 and older may qualify for a senior (or also known as “mature”) discount. This discount may come naturally as you turn this age or is the result of you taking an approved driving course. This course operates similarly to a defensive driving class and helps you brush up on your driving skills. Following completion of this class, you could see a 15% discount on your basic liability and property damage coverage. This can be incredibly helpful as your insurance rates will increase when you hit “senior” or “mature” age. Curb this change by utilizing senior driver discounts.
If you have served in the military or even worked as a federal government employee, you may be rewarded with a military discount on your auto insurance policy. A variety of companies honor this contribution to our country as veterans and retirees are also typically included in this discount. If this fits you, you may be able to receive a discount of up to 15% off your insurance premiums. Consult with your insurance agent to see if your occupation or military status allows you to be eligible for this discount. There are even insurance companies that specialize in providing auto insurance to military personnel that may be worth looking into as they tend to have affordable premiums even before available discounts.
Professional And Organizations Discounts
Being affiliated or partnered with a specific organization may get you a discount on your auto insurance policy. These types of organizations tend to be trade or professional organizations. Some providers offer discounts for certain university alumni groups. You should contact your insurance agent in order to see a full list of what organizations they offer member discounts for. How much you will save by being an organization member varies, but it tends to be on the lower, less-impressive end than other discounts. You could see savings ranging from 2% to 10% off.
Multi-policy discounts, also known as bundling, give you a break on your rates when you buy multiple insurance policies with the same company. This does not mean you are buying several car insurance policies in particular. Bundling refers to when you purchase multiple types of insurance under the same company. For example, if you are a renter, you can purchase both renter’s insurance and car insurance from the same company. As a sort of thank you, you will receive a discount on your premiums. This also works when you bundle car insurance with other insurances like condo, homeowners, motorcycle, boat, RV, and life insurance. The discount you receive varies based on what kind of bundling you do. On average, bundling homeowners insurance and car insurance can result in a discount as high as 25%, while renters may see an auto insurance policy discount of up to 10%.
Homeowner Auto Insurance Discount
Some insurance companies may provide you with a discount for being a homeowner even if you do not have a homeowners’ policy with them. This is due to the fact that homeowners are seen as financially responsible, meaning you are more likely to pay your insurance premiums on time and in full. This discount will apply to various aspects of your policy, including liability insurance and personal injury protection (PIP). How much you can save varies from one company to another. On average, expect an overall saving anywhere from 3% to 10%.
This discount kind of works like the multi-policy discount but is in regards to the number of cars you have. If you own more than one car, purchasing insurance for both of them under the same company can result in you getting a discount. This discount is generally advertised, with customers saving up to 25% on their auto insurance premiums. In order to receive a multi-car discount, more insurance providers will ask that all cars on the same policy be owned by the same person or their relatives. There have been some cases of insurance companies offering this discount to roommates. Consult with an insurance agent before deciding to go in on a policy with your roommate.
Early Signing Discount
Shopping for car insurance coverage before your existing policy expires can result in you getting an early signing discount. This is a fairly rare discount, but if you can find it, it may be worth your while to inquire about. Early signing discounts can get you up to 15% off your total premium. How far in advance you need to signup for a policy to get this discount varies by insurer. Typically, shopping one to two weeks prior to your existing policy expiration date is the best time.
Electronic Billing Discount
Electronic billing discount, also known as paperless billing discount, is available to customers who opt to get their insurance bills and policy documental online instead of being mailed a paper statement. This discount is not too popular anymore since many are billed electronically anyways. It also does not provide much of a break on your rates. On average, an electronic billing discount is around 6% off.
If you are able to do so, try paying your entire six-month or annual car insurance premium upfront. By doing so, insurers will give you a discount of up to 15%. Not only do you receive a discount, but by taking this route, you eliminate the possibility of paying a monthly finance or service fee for spreading out payments. You also avoid being late on monthly payments as everything is taken care of right when the policy begins. This could be a pretty financially-wise decision in the long run.
Being with the same insurance provider for a number of years can result in you receiving a loyalty discount. How much you receive with your loyalty discount may depend on how long you have had coverage with an insurer. For example, some insurers will reward you if you have been with them for at least five years, but every program varies by company and the state you are in. Some also do not exactly give out traditional discounts. Insurers have been known to reward long-term customers with accident forgiveness on one accident. If you are interested in a monetary discount, you can expect to see policy savings ranging from 2% to 10%.
Anti-Lock Brakes Discount
After installing an anti-lock braking system (ABS) in your vehicle, let your insurance provider know, and you may qualify for this discount. This discount may be automatically applied when you are getting a quote. The discount will apply to your collision coverage premium, and how much you will save ranges anywhere from 5% to 10% off. The discount amount depends on your car type and deductible.
Anti-Theft Car Discount
Installing anti-theft devices in your vehicle can get you a pretty nice discount on your comprehensive coverage. Depending on the insurance provider, you can get anti-theft discounts based on your vehicle safety features, both factory-installed and aftermarket installed. According to the National Highway Traffic Safety Administration (NHTSA), nearly 41% of stolen cars are never recovered. This causes headaches for both drivers and their insurance providers. Installing anti-theft devices not only save you on your insurance rates but also puts your provider at ease. You may be looking at a discount as high as 25%.
Some examples of these handy anti-theft devices include:
- GPS navigational system - GPS systems can be very helpful in pinpointing where your car is if it ends up stolen. Some navigational system companies can even stop a car thief from being able to restart your vehicle after stealing it.
- VIN etching - VIN etching is the process of engraving the vehicle identification number (VIN) on a car’s windshield and windows. This works as a deterrent for thieves as they would have to go through the trouble of replacing the vehicle’s glass in order to sell it. Having the VIN number on the outside makes it easier to detect the stolen vehicle. Some companies may even waive your comprehensive coverage deductible if you have VIN etching.
- Stolen vehicle recovery system - These kinds of systems help police track your stolen vehicle by sending a silent radio signal to a transceiver installed in it. In order to receive a discount, you will need to provide proof of installation to your insurer.
Passive Restraint Discount
Passive restraint refers to equipment like airbags and seat belts since they are designed to keep you in the vehicle and lessen your blow in the event of a collision. Insurers give out discounts for at least the front two seats having airbags and seat belts. This may be a fairly easy discount to score, given that all new cars already have passive restraint systems installed. If your vehicle meets the requirements, you could receive a discount of up to 40% on your personal injury protection coverage premium. Cars containing this kind of system are easier to insure because they are safer.
New Car Discount
If you have recently purchased a new car, you may be able to receive a new car discount from your insurance provider. This discount would go towards reducing the cost of your physical damage premium. However, this discount can differ by insurer and state, especially in regards to how “new” is defined. For example, some insurance companies may offer a new car discount if the driver is the vehicle’s first title owner and the car is a current model year. You can expect to see a discount of up to 15%. This discount will generally stay active for three years, typically without the need to renew.
Car Usage-Based Discount Programs
Some insurance companies reward safe driving via usage-based discount programs. Through these programs, insurers look at how much you drive, what your driving habits are, and when you drive in order to provide you with a break on your rates. Drivers can insert a device in their vehicle which will then measure speed, mileage, and braking habits. This type of discount will usually be applied when renewing your policy. If you are a safe driver, you can see a discount ranging anywhere from 5% to 40% off. Many will provide you with a discount just for enrolling in the program, and then, from there, the other part of the discount is based on your driving habits. It is important to note that your discount may not apply to your auto insurance policy.
Tips For Car Insurance Discounts
Car insurance discounts may not always be a straightforward thing. Understanding how discounts are advertised, for example, is incredibly important, so you are not caught off-guard when the bills come. It may be helpful to consider the tips and tricks outlined below in order for your insurance shopping to go smoother.
Be Mindful of The Fine Print
When you are looking into car insurance discounts, there are two words that are crucial: “up to.” As has been highlighted throughout this piece, some discounts are advertised as being able to save you “up to” a certain amount. This means what you see in an advertisement or a company’s website is not a guaranteed saving. It is only the highest amount an eligible driver can receive. For example, if you are looking for a multi-car discount, instead of receiving 25% off your premiums, you may only see 10% off. It is important to make note of if a discount is certain or an estimate so you are not surprised when you see your insurance bill.
Some Discounts Won’t Apply to Your Whole Policy
A number of car insurance discounts will not end up with you receiving a discount on your whole insurance bill. Instead, it may only let you get a break on a certain policy, like personal injury protection coverage or your collision coverage deductible. For example, passive restraint discounts only apply to personal injury protection coverage if you have purchased it as part of your policy. Discounts can be selective in where they offer help, so you should be mindful of that when inquiring about them. Still, they can serve as a very valuable way to save money. No discount should be overlooked for this reason.
Companies Can Limit Discounts
While you can be eligible for multiple discounts, insurance companies tend to cap the total possible discount percentage you are able to receive. For example, suppose you are eligible for two different discounts. In total, the percentage you may be looking at could be high, somewhere around 75% off your car insurance premiums. While this is very appealing and may even be exciting, a company’s discounts may be capped at 45%, meaning that the highest discount any driver will be able to receive. Work with your insurance agent to see what their company’s discount cap is set at.
Some Discounts Are Required
There may be some discounts that state’s mandated insurance companies provide to their clients. For example, some states require insurance companies to give discounts to drivers who take a defensive driving course and provide proof of completion to their provider. Senior or mature drivers may also see similar state-mandated discounts following completing a driving course. Check with your state’s department of insurance or ask your insurance provider of any discounts they must give you in accordance with state laws.
Not All Discounts Apply Automatically
Don’t be surprised if you have to ask about specific discounts in order to find out if your insurance provider offers them. Many discounts are not outwardly advertised by companies for unspecified reasons. When it comes to discounts like anti-theft and good student drivers, you will have to take a couple of steps to get such discounts. An insurance company simply won’t know your child’s grades or the safety status of your vehicle unless you submit reports as proof. Never be ashamed to ask about insurance discounts on a regular basis. You want to get the best price possible for coverage, just like millions of other consumers.
Discounts Vary From State to State
While states can mandate insurance discounts, they can also prohibit them. A discount you see advertised by your insurance provider may not actually be offered in your state. States can set their own auto insurance guidelines and regulations, so it is very important you have some knowledge of the laws when beginning your insurance shopping. Your insurance agent should be well-versed in what is and isn’t allowed regarding insurance in your state. If not, feel free to consult your state’s department of insurance. This is vital, especially if you are relying on certain discounts in order to be able to afford auto insurance.
Do Research on Car Insurance Companies
Many insurance companies advertise their discounts while others do not. It is important that you research all providers you are considering to see what discounts they may have available. You should look both nationally and locally as offered discounts can vary. This process will also help you get to know insurance companies, so you are able to determine which one best suits both your needs and your budget. Pull quotes and contact insurance agents if you have any questions. Be mindful of online reviews for auto insurance providers, as getting insight from actual clients can be very helpful, especially when in regards to available discounts. You never want to just settle for an insurance provider, as good coverage is crucial.
Auto Insurance Discount FAQ
What Are The Best Car Insurance Discounts?
Many insurance experts advise that bundling (or multi-policy discount) is one of the best discounts insurance companies offer. You can get this discount by purchasing multiple policies under the same insurance company. For example, if you have boat insurance with one insurer, look into their auto insurance policies. When you purchase both, you will receive a break on premiums. These breaks may sometimes be as high as 25% off, but it all depends on the company and the types of insurance you are purchasing. Good driver discounts are another great discount to be on the lookout for. Insurers absolutely love when you drive safe. By practicing good, smart driving habits, you may get a discount of up to 40% off.
When Are Discounts Applied?
When discounts are applied to your policy can vary. Some discounts are immediately like bundling and vehicle safety features discounts. Insurance providers naturally do this once you provide the correct information while applying for insurance. However, other discounts require action by the consumer. Like, for example, good student discounts require you to submit your teen’s school transcript. Once you take the appropriate steps, you should see the discount applied.
How do I Find Car Insurance Discounts?
Car insurance discounts can be found on the insurance company’s website or by talking to an insurance agent. Company websites serve as a great place to start to get an idea of what kind of discounts a company offers. However, they may not always lay out every discount. By consulting with your insurance agent, you will be able to get a better understanding of your insurance provider and the discounts you qualify for.
If you need dependable and affordable car insurance, contact Insurance Navy. We offer cheap car insurance quotes online to help drivers of all risk levels find good, cheap coverage. Give us a call today at 888-949-6289, or stop in at one of our many storefronts to get started. Our knowledgeable agents are always eager and ready to help.