Paul Sanchez
Auto insurance can be expensive, but there are ways to cut costs. Discounts are among the best ways to get cheaper car insurance, and while insurance companies try to apply these based on the information you give them, it's always worth asking your agent about potential savings. Discounts can be applied for a variety of reasons, including owning a home, driving safely, and getting good grades. They can also be applied for having multiple cars on your policy, or having other policies with the same company, such as home or renters insurance. You can also get discounts for having anti-theft devices installed, or for driving a low number of miles per year. It's worth noting that discounts vary by company and state, so it's always worth shopping around and comparing quotes.
| Characteristics | Values |
|---|---|
| Driving history | No tickets or accidents in the past 3-5 years |
| Affiliations | Employer, school, team, club or other membership |
| Vehicle features | Anti-lock brakes, alarms, tracking systems, kill-switches, anti-theft devices |
| Payment method | Automated payments, paid-in-full, paperless billing |
| Policy type | Multi-policy (bundling), early renewal |
| Driving courses | Defensive driving course, driver training course |
| Student status | Good student, student away from home |
| Vehicle ownership | Owning or leasing a hybrid or electric vehicle |
| Homeownership | Owning a single-family home or condominium |
| Occupation | Certain occupations, e.g. teachers |
| Military service | Active military personnel and their households |
| Number of insured cars | Insuring more than one car |
| Vehicle age | Owning a car that is 3 years old or newer |
What You'll Learn
Discounts for good drivers
If you're a good driver, you're in luck! Insurance companies see good drivers as less of a risk, so you can probably get a discount if you haven't filed an insurance claim and have a good driving record. This means no accidents, no traffic violations, and no claims. Even if you don't have a perfect record, some insurance companies still offer rewards for people who are working on improving their driving habits.
There are a few different types of good driver discounts. The first is an accident-free discount, which is for drivers who haven't had any accidents in a set number of years, usually three to five. The second type is a violation-free discount, which is for drivers who haven't had any traffic violations in the past three to five years. Some companies combine these two types of discounts into a single safe-driving discount.
In addition to these discounts, you can also save money by taking a defensive driving course. These courses teach drivers how to avoid and prevent crashes and how to use safety devices properly. They typically last four to eight hours and are offered in-person and online. After completing the course, you'll receive a certificate that you can share with your insurance company to receive a discount.
Another way to save is through usage-based insurance or telematics insurance. With this type of insurance, your driving is monitored through a mobile app or a device installed in your car, and you're offered discounts based on your performance. Most major insurance companies offer some form of usage-based insurance.
When asking your auto insurance agent for a good driver discount, be sure to mention any of the above qualifications that you meet. It's also a good idea to shop around and compare quotes from different companies, as the amount of the discount and the criteria for receiving it can vary.
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Discounts for students
Students can be eligible for a range of auto insurance discounts, which can be a great way to save money. While insurance companies should automatically sign you up for the discounts you qualify for, it's always worth asking about them and making sure.
Good Student Discount
The "good student discount" is offered by many insurance companies. This is available for students who are full-time and under the age of 23, provided they maintain a "B" average or above. This discount is typically around 10% but can help students save $100, $150, or even $200 on an auto insurance policy.
Distant Student Discount
If you're a student who attends school away from home, you may be eligible for a "distant student discount". Progressive, for example, offers this discount to students aged 22 or younger who attend a school that is 100 miles or more from their home address and do not have a car at school.
Teen Driver Discount
Students who are 18 years old or younger can qualify for a "teen driver discount". Progressive is one company that offers this discount.
Alumni Associations and Student Organizations Discounts
Some insurance companies offer discounts for members of alumni associations, colleges, universities, and select student organizations. GEICO, for example, provides these discounts to members of certain organizations.
Good Driver Discount
Students who have not been in an accident within the last 5 years can qualify for a "good driver discount". GEICO is one company that offers this discount.
Multi-Car Discount
If you have more than one car on your policy, you will likely be eligible for a multi-car discount.
Low-Mileage Discount
If you don't drive much, you can let your insurance company know that you work from home or only drive for pleasure, which may qualify you for a low-mileage discount.
Other Discounts
There are also other discounts that may be available depending on your insurance company and location. These can include discounts for having multiple policies with the same company, such as home or renters insurance, or for having safety features in your vehicle.
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Discounts for multiple policies
Multi-policy discounts are a way for insurance companies to attract customers and encourage them to insure multiple vehicles with the same provider. By offering a discount, the insurance company benefits from you not switching providers, and you benefit from a lower insurance premium.
The most common multi-policy discount is for car insurance paired with home insurance. This is because home insurance typically costs more than car insurance, so you benefit from the saving on a more expensive premium, while the insurer benefits from selling you a more expensive product.
Other policies that can often be grouped together with car insurance include vehicle-related policies such as caravan insurance, trailer insurance, motorcycle insurance, and boat insurance. Discounts are also usually available for multiple cars that are garaged at the same address.
The easiest way to get a multi-policy discount is to approach your existing insurance provider and ask if they offer such discounts. If they don't, you can shop around and switch to an insurer that does. Look for an insurer that offers discounts for all the types of insurance you need and offers a higher discount than its competitors.
However, it's important to ensure that you're getting the same level of coverage before switching policies. Compare the product disclosure statements of your current and new policies to make sure you're getting the same coverage for a lower price.
The amount you can save with multi-policy discounts varies by insurance company, but you can typically expect discounts of up to 25% on your insurance premium. The discount is usually the same, regardless of the number of policies you have.
It's worth noting that the advertised discount is often the overall savings on the policy as a whole and may not apply to each policy individually. Additionally, some companies may have a limit on the number of policies that can be discounted, typically four or five.
The basic requirement for a multi-policy discount is that all insured items, such as vehicles, are kept at the same address. Other requirements may vary depending on the insurance company. Some insurers may require that the insured items are in the same household and insured by related parties, while others may offer discounts to non-related people as long as they live together.
It's important to carefully review the requirements and restrictions of multi-policy discounts before switching or signing up for a new insurance policy.
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Discounts for low mileage
If you don't drive much, you're less likely to be involved in an accident and file an insurance claim, so it's worth asking your auto insurance agent about low-mileage discounts.
Some insurance companies offer reduced rates for those who drive fewer miles. This is usually for people who drive less than 7,500 or 8,000 miles per year, which is about 21 to 22 miles per day.
- USAA: The low-mileage car insurance discount is based on annual mileage.
- Safeco Insurance: Low-mileage discount requirements aren’t published.
- American Family Insurance: Get a discount for driving under 7,500 miles.
- Farm Bureau: Get a discount for driving under 7,500 miles (depending on the state).
- PEMCO: Get a discount for driving under 8,000 miles.
- State Farm: Discount for driving less than 7,500 miles annually.
- Auto-Owners Insurance: Requires you to drive less than 10,000 miles per year.
Some companies offer pay-per-mile insurance, where your rate is tied directly to your mileage. These programs usually include a base rate and a per-mile rate each month, and they track your mileage with a plug-in device or mobile app. Examples include:
- Metromile: People who drive 2,500 miles per year save about $947 with its pay-per-mile program compared to standard insurance.
- Allstate Milewise: Low-mileage drivers can save 50% with Milewise compared to standard policies.
- Nationwide SmartMiles: A driver went from paying $133 per month on a traditional policy to paying $95 per month for driving 500 miles monthly.
Another way to save money is to try a usage-based program like Snapshot from Progressive. While usage-based options aren't advertised as low-mileage car insurance programs, people who drive the least usually save the most.
How to get a low-mileage discount
Some companies require proof of low mileage each time your policy renews. You can submit your mileage and a photo of the odometer, or provide service paperwork that's at least 90 days old, plus a photo of your current odometer. An agent can calculate your average mileage from those documents.
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Discounts for anti-theft devices
Anti-theft devices are a great way to protect your car from being stolen, and they can also save you money on your car insurance. Many insurance companies offer discounts to customers who have anti-theft devices installed in their vehicles. This is because anti-theft devices reduce the risk of car theft, which helps insurers save money on coverage costs.
There are two main types of anti-theft devices: passive and active. Passive anti-theft devices, such as transponder keys, alarms, and automatic locking doors, work automatically without any input from the driver. Active anti-theft devices, such as steering wheel locks and brake locks, require the driver to take action, such as physically switching on the device.
When it comes to getting a discount on your car insurance for having an anti-theft device, there are a few things you should keep in mind. First, not all insurance companies offer discounts for anti-theft devices, so be sure to check with your insurer to see if they offer this type of discount. Second, some insurance companies may only offer discounts for certain types of anti-theft devices, so be sure to ask about any specific requirements. Third, you may need to provide proof of installation of the anti-theft device before receiving the discount. Finally, keep in mind that any discount you receive will only apply to the comprehensive part of your coverage, not your entire policy.
The amount of money you can save with an anti-theft device discount will depend on your insurance company and the type of device you have. For example, GEICO offers policyholders an anti-theft system discount of up to 23%. Other insurance companies may offer smaller discounts, but even a small discount can add up to significant savings over time.
In addition to saving you money on your car insurance, anti-theft devices can also provide peace of mind knowing that your vehicle is better protected from theft. According to the National Insurance Crime Bureau (NICB), vehicle thefts have been on the rise in recent years, with over 1 million vehicles stolen in 2023. By installing an anti-theft device, you can help deter thieves and keep your car secure.
In summary, if you're looking for ways to save on your car insurance, consider investing in an anti-theft device. By reducing the risk of car theft, you can not only protect your vehicle but also lower your insurance premiums. Be sure to check with your insurance company to find out if they offer anti-theft device discounts and what specific requirements they may have.
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Frequently asked questions
Discounts are given based on certain characteristics that insurers observe in their customers. These characteristics include driving history, age, profession, and more. Insurers reward customers who they deem to be less of a risk. For example, if you are a good driver, a student with good grades, a homeowner, or a loyal customer, you may be eligible for a discount. It is important to know the discounts you qualify for and to ask your agent if they have been applied to your policy.
First, do your research and find out what discounts are available. You can do this by reviewing your insurance company's website or by contacting their call center. Next, make a list of the discounts that you think you qualify for and reach out to your agent to confirm. It is important to be proactive and advocate for yourself, as your insurance company may not always alert you to all the discounts for which you are eligible.
If your agent denies your request, you can compare quotes from other insurance companies to find a better rate. It is a good idea to shop around at least once a year to ensure you are getting the best deal. You can also consider moving your policy to another carrier if you discover that you can get better rates and discounts elsewhere.
Yes, here are a few strategies to get discounts:
- Shop around for insurance yearly, especially for discounts. Discounts vary by company and state, so comparing quotes from different insurers can help you find the best deal.
- Don't fixate on discounts alone. Focus on the final price, as a company with fewer discounts may still have a lower overall cost.
- Be cautious about spending money on add-ons to qualify for richer discounts. Sometimes the cost of the add-on may outweigh the savings from the discount.
- Make sure you are getting the coverage you need. It is important to understand your insurance coverage and potential out-of-pocket expenses in the event of a loss.
