However, there are a lot of methods to save money on your auto insurance policy, even though it can be a big price.
Taking advantage of discounts offered by your auto insurance provider is among the most effective methods to cut costs and save money.
Discounts like these are given out by insurance companies as a way to show appreciation for particular categories of drivers or vehicles, and they can cut the overall cost of your coverage by a sizeable amount.
In this article, we will discuss several popular discounts that may be applied to auto insurance, as well as how to make the most of these savings.
What to Know About Car Insurance Discounts
Discounts on auto insurance typically fall into one of five categories: driver profile, car equipment, payment, policy, and driver history.
The actual cost that you pay for auto insurance is more essential than the number of discounts that you receive, but taking advantage of discounts is one of the greatest methods to locate affordable auto insurance without compromising on the kind of service that you receive.
Bundling discounts, good student discounts, safe driver discounts, and discounts for numerous cars are among the most popular discounts available.
Various Categories of Discounts
For instance, your driving record and claim history affect whether or not you are eligible for discounts based on driver history. In addition, if your vehicle is equipped with particular safety features, such as airbags, anti-lock brakes, and daytime running lights, you can be qualified for reductions on the cost of the vehicle’s equipment.
- Driver Characteristics
This category considers personal factors, like your age, level of education, driving habits, and years insured with one company to determine discount eligibility.
- Vehicle Equipment
Having a newer vehicle or installing certain features in your cars — such as anti-theft systems or stability controls — can lower the cost of your car insurance.
- Payment
The way you pay for your policy and receive documents can reduce your car insurance premium. Going paperless, paying in full, scheduling automatic payments, and signing up online can help you save.
- Policy
Bundling different policy types — like home, auto, and renters — and insuring more than one car with the same company can earn you a discount deal on your car insurance.
- Driver History
Driver History \sHousehold driving history, including claims and ticket history, is used to determine car insurance discount eligibility for this category.
Your Final Discounted Rate Is the Most Important Number
Though it’s advantageous to get as many discounts as possible, the number you receive matters less than the final cost of car insurance.
For example, we found that Farmers Insurance offers the most deals of all car insurance companies, with 21 available. However, before discounts, Farmers cost $1,578 annually for full coverage car insurance while GEICO costs just $1,047 for the same coverage. That’s a $500 difference in rates, with GEICO being significantly cheaper than Farmers, even though Farmers has more discount deals available.
The Most Common Car Insurance Discounts
Bundling discounts, safe driver discounts, good student discounts, multiple car discounts, and anti-theft system discounts are the five most prevalent discounts available. We conducted research into these discounts to determine which insurance companies provide them and how much money you can save using each one, assuming any are available.
Good driver discounts
One of the most common auto insurance discounts is the good driver discount. This discount is offered to drivers who have a clean driving record, with no accidents or traffic violations.
To qualify for a good driver discount, you will typically need to have been driving for a certain number of years, and you will need to provide proof of your driving history.
The amount of the good driver discount will vary by the insurance company and by state, but it can be substantial. For example, some insurance companies offer discounts of up to 25% for drivers who have a clean driving record.
Multi-policy discounts
Another common auto insurance discount is the multi-policy discount. This discount is offered to customers who have multiple policies with the same insurance company, such as auto insurance and home insurance.
By bundling your policies, you can save money on your premiums, as well as simplify your insurance coverage.
The amount of the multi-policy discount will vary by the insurance company and by the types of policies that you have, but it can be significant. For example, some insurance companies offer discounts of up to 15% for customers who have multiple policies with the same insurer.
Low mileage discounts
If you do not drive your vehicle very often, you may be eligible for a low mileage discount. This discount is offered to drivers who have low annual mileage, typically less than 7,500 miles per year.
To qualify for a low mileage discount, you will typically need to provide proof of your mileage, such as a mileage log or a statement from your employer.
The amount of the low mileage discount will vary by the insurance company, but it can be substantial. For example, some insurance companies offer discounts of up to 20% for drivers who have low annual mileage.
Anti-Theft Discounts
If your vehicle has certain safety features, you may be eligible for a safety features discount. This discount is offered to drivers who have vehicles with features that are designed to reduce the risk of accidents or injuries, such as airbags, antilock brakes, or stability control.
To qualify for a safety features discount, you will typically need to provide proof of the safety features that are installed in your vehicle.
The amount of the safety features discount will vary by the insurance company and by the types of safety features that your vehicle has, but it can be significant. For example, some insurance companies offer discounts of up to 10% for drivers who have vehicles with certain safety features.
Student discounts
If you are a student, you may be eligible for a student discount on your auto insurance. This discount is typically offered to full-time students who have good grades, and it is designed to reward students who are responsible and focused on their education.
To qualify for a student discount, you will typically need to provide proof of your enrollment in a college or university, as well as your grades.
The amount of the student discount will vary by the insurance company, but it can be substantial. For example, some insurance companies offer discounts of up to 25% for students who have good grades.
Some Additional Common Auto Insurance Discounts
In addition to the common auto insurance discounts that were mentioned above, many other discounts may be available depending on your situation and the insurance company that you are working with. Some additional common auto insurance discounts include:
- Defensive driving discount: This discount is offered to drivers who have completed a defensive driving course, which is designed to teach drivers how to avoid accidents and handle dangerous situations. To qualify for a defensive driving discount, you will typically need to provide proof of completion of the course.
- Anti-theft discount: This discount is offered to drivers who have installed anti-theft devices in their vehicles, such as alarms, tracking devices, or immobilizers. To qualify for an anti-theft discount, you will typically need to provide proof of the anti-theft devices that are installed in your vehicle.
- Early signing discount: This discount is offered to drivers who sign up for a new auto insurance policy early before their current policy expires. To qualify for an early signing discount, you will typically need to provide proof of your current policy and the date that it expires.
- Loyalty discount: This discount is offered to customers who have been with the same insurance company for a certain number of years. To qualify for a loyalty discount, you will typically need to have been with the same insurer for at least three years.
- Credit score discount: This discount is offered to drivers who have a good credit score, as insurance companies often use credit scores as a factor in determining the cost of a policy. To qualify for a credit score discount, you will typically need to provide proof of your credit score.
Be sure to check with your insurance company to see what discounts are available, and to ask about any other discounts that you may be eligible for. By taking advantage of auto insurance discounts, you can save money on your policy and get the coverage that you need to protect yourself and your vehicle.
Companies That Offer the Most Car Insurance Discounts
Although the majority of insurance providers make the same standard reductions available, several of them also provide further reductions to entice new customers. Farmers, GEICO, Liberty Mutual, and Amica have the greatest number of accessible discounts, whilst Esurance, AAA, and Nationwide provide the fewest number of discounts.
Number of Discounts Offered by the Company
In Conclusion
Discounts on your auto insurance policy are an excellent method to cut costs on the coverage you purchase. You can considerably cut the cost of your policy by qualifying for discounts such as those offered for safe drivers, having multiple insurance policies, low annual miles, safety features, students, and excellent grades.
Be sure to check with your insurance carrier to see what discounts are offered, and ask about any other reductions for which you might be eligible.
Also, inquire about any other discounts that might be available. If you take the appropriate steps, you will be able to reduce the cost of your auto insurance policy while still receiving the level of protection you require for both yourself and your vehicle.
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