Auto insurance is required by law in almost states, but the cost of car insurance can be prohibitively high for many drivers. Car insurance prices are tailored to each individual driver depending on characteristics such as ZIP code, age, credit score and claim history (although some states limit or restrict certain factors). Drivers can, however, save money on their car insurance coverage by taking advantage of insurer discounts.
How to Lower Your Auto Insurance Rates
Auto insurance discounts are typically divided into a few categories. Depending on what each car insurance company offers, you may be eligible for a discount based on your personal profile, driving history, or the features of your vehicle.
When looking for car insurance discounts, it may be useful to evaluate the discounts offered by your current insurance company and then compare them to the discounts on your existing policy to ensure that you're receiving the discounts you're eligible for. You can also contact your insurance company or agent and request a review to ensure that you are receiving any discounts that you may be eligible for.
Discount eligibility and amounts vary by the insurance company, so it may be worthwhile to shop around with various carriers to see if other companies offer unique discounts that could save you money on your policy.
Different kinds of car insurance discounts
Because discount eligibility and amounts vary by the insurance company, when looking for cheap auto insurance, it's important to shop around with different carriers. After receiving your quotes, go over the discounts and their impact on your insurance rates, and see if you're missing any of the discounts listed below.
Vehicle-specific discounts
Anti-lock brakes, adaptive cruise control, daytime running lights, and other safety features installed in your vehicle may make driving safer and assist you in avoiding accidents. Because of your lower risk, your car insurance company may offer you a discount for these features.
Discounts on safety features
Most new cars include standard safety features like anti-lock brakes, passive restraint, and air bags. You may even be able to customize your vehicle with additional safety features. Keep in mind, however, that each car insurance company is unique, and the qualifications for safety features and discount amounts may differ.
Discounts for anti-theft measures
Comprehensive insurance coverage protects you against car theft, which can be expensive for your insurer and inconvenient for you. As a result, some carriers may provide an additional anti-theft discount for deterrents installed in your vehicle.
Driver-specific discounts
Some auto insurance discounts are based on the characteristics of the driver, such as their age, profession, or membership in an affiliated group. While some discounts may be automatically applied, it never hurts to ask if you don't see it. Following are some discount examples:
Young driver discounts
Young drivers between the ages of 16 and 25. Young drivers have some of the highest average car insurance rates of any age group, but there are ways to get discounts. Some carriers offer a discount for completing a safe driving course designed for teen and young drivers in order to save money on car insurance for young drivers, while others offer telematics programs to help young drivers practice safe driving habits.
Good Student discounts
High school or college students who are currently enrolled full-time. Including student discounts is another way to reduce your auto insurance premium. High school and college students may be able to add a Good Student discount to their policy by maintaining a good GPA (typically a B-average or higher). Furthermore, college students who attend school far from home and do not use the family car may be eligible for a distant student discount. To be eligible for this type of discount, students must be enrolled full-time.
Military discounts
Active and former military members, and some qualified family members. Some insurance companies also provide military members with special discounts. You and qualified family members may be able to qualify for an additional discount if you are on active duty or active reserves, retired or honorably discharged, or both.
Other Driver Specific discounts
- Professionals discounts - Individuals who are in qualified industries, such as education or healthcare.
- Organizational-based discounts - Individuals who are members of or employed by partner organizations.
Driving Based Discounts
A clean driving record is usually the best way to qualify for many safe driving discounts because it shows insurance companies that you are less likely to file claims. Even if you don't have a perfect driving record, you may be eligible for a variety of driving-related discounts.
Safe driver discounts
A driver must not have been involved in an at-fault accident or received a conviction for a moving violation, such as a speeding ticket, within a certain number of years to qualify for a safe driver discount. The amount of time and the percentage of the discount may vary depending on the insurance company, so it's worth shopping around to see what different carriers have to offer.
Even if you have a blemish on your driving record, you can still strive to be a safe driver and save money. Many insurance companies now provide usage-based telematics programs that monitor safe driving habits. There is frequently a discount simply for signing up, and you may be able to earn the maximum discount based on how well you perform during the trial period.
Low-mileage discounts
Drivers who do not commute daily and drive very infrequently. The average driver drives around 13,000 miles per year. Drivers with lower-than-average annual mileage may be eligible for a low-mileage discount. If you drive less than the average American or only occasionally, a program designed specifically for low-mileage drivers may be worth considering. Most auto insurance companies also require odometer readings every year in order to properly calculate your rates. If you do not drive frequently, it may be worthwhile to contact your insurance provider to learn the requirements for this type of discount.
Defensive driving course discounts
For people who has taken a certified driving course online or in classroom. Considerations when shopping for car insurance for seniors may differ from those for other age groups, but this demographic may also be eligible for discounts. Taking a defensive driving course, for example, could be educational while also earning drivers a discount on their auto insurance. In most cases, the course will need to be approved by both the state and the insurer. Before enrolling, you should also ensure that the course is approved by your insurance company, as not all defensive driving courses will qualify.
Loyal Customer Discounts
Once you've found a company that works for you, you may be eligible for additional discounts if you combine your auto insurance with home, life, boat, or other types of insurance.
Multi-Car Discount
If you have more than one car, including both vehicles on a single policy could be a simple way to save money. Remember that the vehicle must be registered to you or your spouse if you are married.
Multi-Policy Discount
Most major insurers offer a discount for bundling. Whether you own or rent your home, having both your auto insurance and your homeowners insurance or renters insurance with the same company may result in a premium reduction. Bundling discounts may also be available if you combine your auto insurance with other policies such as life or umbrella.
Discount for Long time Customers
This discount could be interpreted in two ways depending on the carrier. Some insurance companies, such as Progressive, may offer this discount to new policyholders based on the number of years they have been continuously insured with a previous carrier. Other insurance companies may take into account how long an insured has been with them, though it is common that it is not included as a discount but is factored into the overall premium before discounts.
Other Discounts
We've covered the most common car insurance discounts, but there may be other ways to save money on car insurance. The following are some discounts that not all insurers offer, but it's worth asking about to see if you can include them.
Discount for new policyholders
Some carriers may offer a new policyholder discount to encourage drivers to switch car insurance companies. This additional discount may be available for the first few months of the new policy and then disappear.
Discount for married couples
Car insurance for married drivers may be less expensive than for single drivers. According to our analysis of Quadrant Information Services' average premium data, single drivers pay an average of $2,000 per year for full coverage car insurance, while married drivers pay less on average.
Discount for homeowners
Because homeowners are generally more financially stable than renters, they may be able to receive a discount on their car insurance because they are less likely to need to file claims. If your insurance company does not provide home insurance, making a multiple policy discount unavailable, you can inquire about a homeowner discount.
Billing Discounts
Depending on your billing and payment method, you may be able to earn additional policy discounts. Paperless billing, automatic billing, and paid-in-full discounts are the most common, but check with your insurance agent to see if there is anything unique to your company that you can participate in.
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