UPDATED: Mar 13, 2020
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Car Insurance Discounts
Car insurance discounts are one of the most effective ways that insurance companies attract new customers. Different insurers are always experimenting with ways to entice customers to either switch to their company, or just sign up new drivers for the first time. Some of the discounts are obvious, some are applied immediately when you sign up for a policy, and others are less obvious. On this page, we’ll go over some of the basics of car insurance discounts. Who knows, by the time you’re done reading this, you could be saving yourself a ton of money!
When you sit down to craft a policy with an insurance agent, there are some basic facts about you and your life that are so easily verifiable they will immediately qualify you for several lucrative discounts. Some of those discounts include:
- Your job (military, clergy, etc.)
- Your education level
- Homeownership (regardless of whether you bundle your homeowners and auto insurance policies)
- Your credit score
- Your age
- Safety features on your vehicle
- And many more
If you’re financially responsible enough to get a good credit score, then your auto insurance company assumes that you will be equally responsible behind the wheel; at least, that’s how the conventional wisdom goes. They also believe the opposite to be true. There are obviously situations where this isn’t necessarily the case. After all, there are millions of drivers out there who are safe and ticket-free, but unexpected financial troubles have left them with bad credit. Likewise, there are millions of motorists who are fortunate enough to have excellent credit, but have a laundry list of violations on their driving record. If you have bad credit, but aren’t living up to your insurance company’s expectations of also being a bad driver, be sure to sign up with a credit monitoring agency that can help you track and improve your credit score over time for free. Eventually, this can lead to some very dramatic savings.Good Credit Auto Insurance Discounts Legend: Excellent Credit Good Credit Poor Credit ALFA 21st Century State Farm Mercury Nationwide 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 $81 $93 $107 $93 $121 $179 $100 $124 $192 $122 $138 $189 $125 $139 $180
If you have gone several years without a speeding ticket, a fender bender, a traffic violation, or any other notable incidence of dangerous driving, then your insurance company will automatically classify use a safe driver. Depending on the number of years you have gone ticket- and accident-free, you could be eligible to save a lot of money. Generally, a driver must have a clean driving record for the most recent five consecutive years in order to qualify for a safe driver discount. However, there are some companies that offer such a discount for as little as three years of safe driving, or as many as seven years of safe driving. You’ll have to ask your insurance company for details.Safe Driver Auto Insurance Discounts Legend: Safe Driver Blemished Driving Record ALFA 21st Century State Farm Mercury Nationwide 25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 $93 $121 $286 $124 $149 $138 $375 $139 $256
Practice makes perfect, and that sentiment is especially true for safe driving. Young people are obviously at the highest risk for causing accidents because they have little experience with driving, and may be unsure of themselves behind the wheel. Middle-aged adults and senior citizens in the early part of their golden years are generally more mature, more experienced, and more likely to drive safely than other age groups. However, past a certain age, senior citizens lose their ability to see clearly, their reaction time slows down, and they may not be as physically coordinated as they were in the past. Based on all of these factors, auto insurance companies calculate premiums based on age-related risk, as you can see in the graph below.Age-Related Auto Insurance Discounts Legend: Average Monthly Premium 18 Year Old Driver 25 Year Old Driver 35 Year Old Driver 67 Year Old Driver 85 Year Old Driver 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 $305 $96 $76 $64 $128
Discounts You Should Be Asking For
It feels good to save money just for being you. And there are other ways you can accomplish the same task, but it might take a little bit more work on your part. It can pay – literally – to ask your insurance company if there are any additional discounts you might be able to qualify for if you can submit to them legitimate proof. We’ll talk about some of them in this section.
Within the last 5 years or so, usage-based insurance discounts have taken the industry by storm. Progressive calls this discount their Snapshot program; Allstate lets their customers save money with Drivewise; The Hartford refers to theirs as TrueLane; and you can qualify for the SmartRide discount if you happen to be underwritten by Nationwide. You can qualify for this discount by contacting your insurance company and asking them to send you a plug-in device or simply downloading an app to your phone that tracks your miles, your braking, your speed, and whether or not your vehicle’s on the road during safe driving hours. By keeping your mileage low, avoiding rush hour traffic, refraining from driving after midnight, and limiting how often you slam on your brakes, you can save up to 30% off your insurance premiums. That can cut your monthly payment down by 1/3! The savings are enormous.
Driver Education Classes
This one can either be used to preemptively get you a better deal on a future policy (i.e. teenagers taking driver’s ed before they get their official license), or by adults who have recently been convicted of a traffic violation and need to assuage any upcoming premium increases that their insurer may apply to their policy. This discount can also benefit senior citizens. As we said earlier, past a certain age, your many years of experience behind the wheel start to get eclipsed by the fact that your body can’t drive as well as it used to. So if you are a senior citizen who’s worried about being financially penalized for continuing to drive past the age of 75, it could be in your best interest to take a driving course and refresh your knowledge.
Good Student Discounts
It’s not enough to tell your insurance agent that you (or your young student) earn good grades; you’re going to have to prove it with some paperwork. Usually, your school can send you documentation of your GPA at your request or submit it to the insurance company directly if you ask them to. Be sure to follow up with your agent and ask them to explain to you how and when the discount will be applied, as well as how much you saved.
Speaking of student discounts, here’s a new and interesting way for your college student to save: it’s called the Away From Home student discount. If your child attends a major university located 100 miles or more away from your home, and if they leave their car parked in your driveway while away at school, they could get a discount. But you’ll have to ask your insurance agent for details.
These days, you can insure just about anything. The most common types of the property, of course, are your car, you’re home, your valuables, Any other types of vehicles you may happen to own (such as a motorcycle, an RV, a jet ski, a snowmobile, etc.), and even your life. Of course, if you take out an insurance policy on every single expensive piece of property you own, that can turn into an annoying, confusing mess very quickly. But not if you bundled most – if not all – of your insurance policies with the same company. When you do that, your insurer will give you some pretty substantial discounts. And the more policies you bundled, the more you can save.
The Importance of Talking to Your Insurance Company About Your Potential Discounts
At the end of the day, informative sites like ours can only give you a snapshot of all the potential discounts you may be eligible for. The truth is that discounts will vary from state-to-state, as well as from company to company. There are thousands upon thousands of discounts out there just waiting for drivers like you to take advantage of. But the only way you’ll know for sure that you’re getting the most discounts apply to your policy is to talk to your agent. They’ll be able to help you figure out which discounts are applicable based on your personal circumstances so that you can save the most money.
Of course, you can also help yourself save more money by shopping around for different quotes from multiple companies at once. Our fast and easy quote generator can help you find a better deal and 5 minutes or less. Give it a try!