Auto Insurance Discounts: Who Qualifies And Why?

Auto insurance discounts are a great way to save money on your car insurance. There are many types of discounts available, including driver history discounts, affiliation discounts, vehicle-related feature discounts, personal trait discounts, customer loyalty discounts, and policy-related discounts. Driver history discounts are often given to those with a clean driving record, while affiliation discounts are based on your job, school, or clubs. Vehicle-related feature discounts apply to cars with safety add-ons or electric vehicles, while personal trait discounts are given to students with good grades or homeowners. Customer loyalty discounts reward those who have multiple policies or cars insured with the same company, and policy-related discounts are earned based on how you buy and pay for your policy. It's important to shop around and compare rates from different companies to ensure you're getting the best deal, as discounts and eligibility requirements vary by insurer and state.

Student Discounts

Students can often get discounts on their auto insurance, which can make a big difference to their overall insurance costs. Most insurance companies offer discounts for students who are in full-time education and can maintain a certain grade average, usually a B grade or higher.

Good Student Discounts

Full-time students who can maintain a "B" average or better are often eligible for a good student discount. This is available from most of the top insurance companies, including:

• GEICO
• Nationwide
• Allstate
• State Farm
• Liberty Mutual
• Progressive
• Farmers
• USAA

Affinity Membership Discounts

Students who are members of fraternities, sororities, alumni associations, honour societies, or other student organisations may be eligible for an affinity membership discount. GEICO, for example, offers this discount to members of these types of organisations.

Distant Student Discounts

Students who live away from home, usually more than 100 miles away, may be eligible for a distant student discount. This is because they are less likely to be using their car regularly and so are considered lower-risk drivers. Progressive and Liberty Mutual are two companies that offer this discount.

Good Driver Discounts

Although not strictly a student discount, many insurance companies offer good driver discounts to those who have a clean driving record. Students who are also good drivers can, therefore, benefit from this additional discount.

Defensive Driving Discounts

Defensive driving courses are a great way to save on your auto insurance. Many insurance companies offer discounts for drivers who take a defensive driving course, and these can be substantial savings over time. The exact amount of the discount will depend on your insurance company and your policy, but some companies offer up to a 10% discount on your premium for 3 years.

Defensive driving courses are designed to help you become a safer driver and can be taken online or in a classroom setting. They cover topics such as traffic laws, safety tips, and driving techniques to help you avoid accidents and violations. These courses are often approved by state agencies, such as the Department of Motor Vehicles (DMV), and can also help you reduce points on your driver's license.

To find out if you are eligible for a defensive driving discount, contact your insurance company or agent. They will be able to provide you with a list of approved courses and any requirements that you need to meet. It's important to note that some companies may limit this discount to specific groups, such as seniors or teens, so be sure to ask about any restrictions.

In addition to saving on your insurance, completing a defensive driving course can also help you become a more confident and safer driver. It's a great way to brush up on your driving skills and knowledge, especially if you are a new or inexperienced driver.

Don't leave money on the table! If you're looking for ways to save on your auto insurance, taking a defensive driving course is a simple and effective way to reduce your premiums and improve your driving skills at the same time.

Loyalty Discounts

The amount you can save with a loyalty discount varies depending on the insurer. You can save up to 20% on your annual or semi-annual premium. Generally, you should expect somewhere in the 10% to 20% range. For example, State Farm offers an average savings of 20% for multiple policies and 17% for multi-car policies.

It's important to note that loyalty discounts may not always give you the best rate. Insurance companies have been known to increase premiums while offering loyalty discounts, resulting in zero savings. This practice is known as price optimization. Therefore, it's recommended to shop around and compare rates from different insurers to ensure you're getting the best deal.

Vehicle-Related Features Discounts

Vehicle-related features can help you save a lot on your auto insurance. Here are some of the vehicle-based features that can get you a discount:

Safety Equipment

Safety equipment like anti-lock brakes, airbags, and automatic seat belts can get you a discount on your insurance premium. These features protect drivers and passengers, potentially reducing the risk for insurance companies. While not all companies offer safety equipment discounts, it is worth checking with your insurer to see if you are eligible for any savings.

Anti-Theft Devices

If your car is equipped with anti-theft devices such as alarms, tracking systems, or kill switches, you may be eligible for a discount on your comprehensive auto insurance coverage. Some companies may require these devices to be factory-installed to qualify for the discount. Anti-theft devices reduce the risk of theft, making your vehicle less costly to insure.

New Vehicle Discounts

Some insurance providers offer discounts for policyholders with newer cars. This is often referred to as a "new car discount" and typically applies to vehicles less than three years old. The specific definition of "new" may vary by insurer, so be sure to check with your insurance company.

Vehicle Age

In addition to discounts for newer vehicles, some insurers may also offer discounts for older vehicles. For example, vehicles from the 1990s or earlier with factory-installed airbags may qualify for a safety discount. Older vehicles may also have lower insurance rates due to their decreased value over time.

Daytime Running Lights (DRL)

If your car is equipped with factory-installed daytime running lights, you may be eligible for a discount on your liability, collision, and medical payments coverages. This discount recognizes the added visibility and safety that DRLs provide to drivers.

Anti-Lock Braking System (ABS)

A factory-installed anti-lock braking system (ABS) can also get you a discount on your liability, collision, and medical payments coverages. ABS helps prevent wheel lock-up and maintains vehicle control during sudden stops, making your car safer to drive.

Telematics / Usage-Based Insurance (UBI)

Some insurers offer discounts for vehicles participating in a Telematics or Usage-Based Insurance (UBI) program. These programs track driving statistics such as miles driven, acceleration, braking patterns, and location using a telematics device or a smartphone app. By enrolling in a UBI program, you may be able to receive a discount on your insurance premium.

Combat Auto Theft (CAT) Program

If you live in New York State, your vehicle may be eligible for a discount if it participates in the Combat Auto Theft (CAT) Program. This program allows law enforcement officers to stop vehicles displaying an official decal during the prime vehicle theft period between 1 a.m. and 5 a.m. By participating in this program, you can help reduce the risk of auto theft and potentially lower your insurance costs.

Personal Traits Discounts

Personal trait discounts are a category of auto insurance discounts that are based on the driver but not their driving habits. These include:

Good Student Discount

Full-time students who maintain good grades (usually a B average or above) often qualify for a discount on their auto insurance. The age limit for this discount varies by insurance carrier. For example, Nationwide offers this discount to students aged 16 to 24, while Progressive offers it to students up to 25 years old.

Homeowner Discount

Some insurance companies offer a discount to customers who own a home, even if they don't have homeowners insurance through the same company. Progressive, for example, offers a discount to homeowners even if their home insurance is with another company.

Student Away-at-School Discount

Students who leave their cars at home while they're away at college will be driving less, which can qualify them for a discount. Requirements vary by company but usually include a minimum distance to the school and age limits. For example, Progressive requires drivers to be in school at least 100 miles away from home and be 22 or younger to qualify.

Frequently asked questions