Auto Insurance Discounts: What You Need To Know

Car insurance discounts can help you save hundreds of dollars. There are more than a dozen common car insurance discounts that can help offset rising insurance, fuel and vehicle repair costs. The most common types of discounts include those for driver history, affiliation, vehicle-related features, personal traits, customer loyalty, and policy-related factors.

Driver history discounts are offered to those with a clean driving record, free from accidents, speeding tickets, and other violations. Affiliation discounts are based on your job, school, or clubs you're associated with. Vehicle-related feature discounts apply to cars with safety add-ons and electric vehicles. Personal trait discounts include those for good students and homeowners. Customer loyalty discounts reward those who renew policies and have multiple policies or cars insured. Finally, policy-related discounts include automatic payments, early shopper, paid-in-full, and paperless billing.

It's important to ask about car insurance discounts when considering a new policy, as combining individual discounts can lead to substantial annual savings.

Student Discounts

Students can get car insurance discounts from many major providers, including Progressive, Geico, State Farm, and USAA. These discounts can help to offset the higher insurance premiums that students and young drivers typically face. Here are some of the most common types of student discounts:

Good Student Discount

Students who achieve good grades may qualify for cheaper car insurance. This is one of the more common discounts and is usually available for students with their own policy or those listed as additional drivers on their parents' policy. To qualify, drivers typically need to be full-time students with a B average or above (a 3.0 GPA) and be under a certain age. The discount can reduce total insurance costs by 10 to 25%. Progressive, Geico, State Farm, and USAA all offer good student discounts.

Driver's Training Discount

In addition to rewarding good grades, many insurers also offer discounts for completing a defensive driving or driver's education course. Given the higher accident risk for young and student drivers, completing these courses demonstrates a commitment to safe driving.

Distant Student Discount

Students who live away from home and don't have a car at their school address may be eligible for a distant student discount. This discount recognises that the risk of an accident is lower if the student doesn't have regular access to a car. Progressive, Travelers, and Liberty Mutual offer this type of discount, sometimes called a "student away at school" discount.

Affiliation Discounts

Students who are members of certain organisations, such as universities, alumni associations, fraternities, or sororities, may be eligible for affiliation discounts. These are usually negotiated by the organisation on behalf of its members. Geico, for example, offers discounts for members of select organisations.

Telematics Discounts

Telematics programs use an app or in-car device to monitor driving habits in real time. Students can earn discounts by demonstrating safe driving habits. State Farm's Steer Clear program is designed for drivers under 25 and includes a training course and mobile app to record driving hours.

Discounts for Vehicle Safety Features

Safety features that help prevent serious accidents or property loss can lower your car insurance payments. However, the discounts may not be worth the cost of a new high-tech car.

GPS Tracking Devices

Some insurers offer a discount for GPS tracking devices, which can help locate a stolen vehicle.

Daytime Running Lights

Daytime running lights are headlights that turn on automatically when the car is started, helping to prevent daytime head-on and front-corner collisions. Some insurers offer a small discount for this feature.

Lane-Departure Warnings

Lane-departure warning systems use cameras to track the car's position and alert the driver if the vehicle drifts out of its lane.

Anti-Lock Brakes

Anti-lock brakes reduce the distance it takes for a car to stop and help to prevent accidents. Discounts for anti-lock brakes vary, but some insurers offer up to a 10% discount.

Airbags

Airbags cushion the blow for people during a crash, and most insurers offer discounts for vehicles with airbags. The discount offered may increase with the number of airbags in the vehicle.

Electronic Stability Control

Electronic stability control systems help prevent vehicles from skidding out of control and rolling over when drivers have to steer hard or turn on slippery roads. Insurers that offer a discount for this feature typically apply it to collision coverage.

Automatic Seat Belts

Many insurers still offer the same discount for automatic seat belts as they do for airbags.

It's important to note that not all insurers offer discounts for safety features, and the availability of discounts may vary by state. Additionally, the cost of adding extra safety features to your car may outweigh the potential savings on insurance.

Discounts for Anti-Theft Devices

Anti-theft devices are tools installed by a vehicle's manufacturer or a driver to protect a car from theft. Many insurance companies offer discounts to policyholders with anti-theft devices installed in their vehicles as it helps insurers save money on coverage costs.

Theft of a vehicle is only covered by insurance companies if the policyholder has comprehensive coverage. This is optional for vehicles that have been paid off but is mandatory for leased and financed vehicles.

There are several types of anti-theft devices available today that will earn you a discount from your insurance provider. These include manual, automatic, and remote disabling devices, as well as vehicle tracking systems.

Manual Disabling Devices

Manual disabling devices, also known as active devices, require the driver to physically switch them on. Examples include steering wheel locks, brake locks, and kill switches. Steering wheel locks prevent movement of the steering wheel, delaying or preventing theft. Brake locks make it impossible to push down on the gas pedal, while kill switches disable all electricity in the vehicle.

Automatic Disabling Devices

Automatic disabling devices, also known as passive devices, work without any manual input from the driver. Many new cars have these installed as standard. Examples include transponder keys, which must be present in the vehicle for it to be driven, and audible alarms, which blare loudly when unwarranted touch is detected.

Remote Disabling Systems

Remote disabling systems are a newer type of anti-theft device that connects to your smartphone, allowing you to decelerate, downshift, or lock the brakes remotely. These devices are often used in commercial vehicles rather than personal cars.

Vehicle Tracking Systems

Vehicle tracking systems help locate a stolen vehicle using GPS technology. Examples include GPS trackers, subscription services like OnStar, and vehicle recovery systems like LoJack, which uses radio frequency to locate the vehicle.

Getting an Anti-Theft Device Discount

To get an anti-theft device discount, check with your insurance provider to see if they offer this type of discount. Some companies may require specific devices to be installed, while others may not cover certain devices such as basic car alarms. You may also need to provide proof of installation. The discount you receive will depend on your insurance company, state, and type of anti-theft device installed.

Discounts for Policy Holders with Multiple Cars

If you have multiple cars in your household, you can save money by insuring them under a single multi-car insurance policy. This type of policy is offered by most major insurance companies and can lead to significant cost savings.

A multi-car insurance policy covers multiple vehicles under one policy. This is most common in families with two or more cars garaged at a single address. The primary driver, typically the policyholder, is the person who drives the most. Other household drivers can be added as named drivers. The insurance company will consider the driving records of all drivers when determining the premium.

How to Get a Multi-Car Insurance Discount

To get a multi-car insurance discount, you must own more than one vehicle. These can be cars, trucks, SUVs, or a mix of vehicle types. You will need to combine your vehicles under one policy, providing details about each vehicle and the drivers in your household. The discount will then be applied to your quote.

Benefits of a Multi-Car Insurance Policy

A multi-car insurance policy offers several benefits:

• Cost savings: Multi-car insurance policies typically offer a discount of up to 25% or more, which increases with the number of cars added to the policy.
• Convenience: You only need to manage one policy, with a single policy number, premium, and renewal date.
• Flexibility: You can customise the coverage for each vehicle, such as choosing comprehensive coverage for a newer car and liability-only coverage for an older car.
• Streamlined claims process: If multiple cars are involved in the same accident, you only need to file one claim and deal with one insurance company.
• Easier policy updates: Adding or removing vehicles from your policy is straightforward, and you can assign primary and secondary drivers to each car.

Requirements for a Multi-Car Insurance Policy

The main requirement for a multi-car insurance policy is that all the cars are kept at a single address and owned by family members within the household. There may also be a limit to the number of cars you can have on one policy, typically between four and five cars.

Discounts for Policy Holders with Multiple Policies

Policyholders with multiple policies can benefit from multi-policy discounts, also known as multi-line or bundling discounts. This is when you buy two or more insurance policies from the same company. This could be a combination of car insurance with home insurance, renters insurance, condo insurance, motorcycle insurance, boat insurance, RV insurance, or life insurance.

The discount will be applied to the third policy when you take it out, and to the first two when they are up for renewal, assuming you are still eligible. The policies should all have the same policyholder's name, date of birth, and mailing address.

The amount of discount offered varies by insurer. For example, GIO offers a 10% discount, while Allstate offers up to 25%. State Farm offers an average 23% discount for multi-policies, while American Family and Farmers each have an average of 18%. Insurers in the rating of the Best Home and Auto Insurance Bundles offer discounts of 10% to 25% or more for combining policies.

Bundling your policies can result in significant savings, and it is also more convenient to manage all your insurance policies on the same website or by calling the same customer service number. However, one drawback is that you may not save that much money, especially if you own a collectible or hard-to-insure vehicle. It is important to do your research and compare quotes from multiple insurers to find out if bundling is right for you.

Frequently asked questions