Types of Car Insurance Discounts
Various car insurance discounts are available, but most fall into four categories:
- Discounts for drivers
- Safety discounts
- Policy-related discounts
- Vehicle-related discounts
Discounts for Drivers
Insurance companies quote drivers on various factors that affect their car insurance rates. However, some might qualify for an insurance discount based on the driver themselves, not their driving habits:
An affinity discount saves you money on car insurance based on your membership in specific approved organizations. Qualifying organizations will vary based on your insurer, but membership in credit unions, professional organizations, fraternities, sororities, car clubs, employee organizations, and sports teams may make you eligible. Depending on your circumstances, you may be able to get affinity discounts at around 5–20%.
Good Student Discount
You might qualify for this discount if you’re a full-time student with decent grades. Most insurers offer it to students with a B average or higher. Depending on the policy, you can save a good bit — many good student discounts have the potential to save you 14% on average.
If you own a home, you may be eligible for savings. If your insurer offers this discount, you will likely qualify even if you get your home insurance through another carrier. Homeowners’ discounts can potentially reach an average of 14%.
It’s less common for insurers to offer discounts to those who rent their homes. However, many let you add renters’ insurance for only a few dollars more when you purchase car insurance through them.
Students Away at School
If you’re a student who lives at a school at least 100 miles from your home (and the insured vehicle), you may qualify for car insurance with student discounts.
The student-away-at-school (also called resident student) discount is for full-time students who only use the insured vehicle on school holidays. The amount can vary widely between insurers.
Senior/Mature Driver Discount
Students aren’t the only ones who qualify for discounts on their car insurance. Some insurers offer car insurance discounts for seniors who complete a specialized course for senior drivers.
Insurers are required to provide this discount in 34 different states and the District of Columbia. The senior/mature discount may save you as much as 15%.
Types of Senior Discounts:
Some insurers offer lower premium rates for senior drivers who maintain a clean driving record and demonstrate safe driving habits.
Discounts for Completing Mature Driver Courses:
Seniors can qualify for discounts by completing approved mature driver safety courses. These courses refresh driving skills and update older drivers on the latest traffic laws and regulations.
Retiree or Low-mileage Discounts:
Older drivers who are retired or semi-retired may drive less frequently than their younger counterparts. As a result, insurance companies may offer discounts for low annual mileage, reflecting the reduced risk of accidents.
Vehicle Safety Feature Discounts:
Senior drivers who invest in vehicles with advanced safety features, such as anti-lock brakes or collision avoidance systems, may be eligible for additional discounts. These features help minimize the risk of accidents and subsequent claims.
What to Look Out For:
Age-based Pricing Changes:
Some insurance companies might increase rates for older drivers due to age-related factors, such as slower reaction times or health issues. Be sure to compare quotes from multiple insurers to find the best rates for your situation.
As your driving habits and needs change, it’s essential to review your coverage and adjust it accordingly. For example, you may want to consider reducing or eliminating collision coverage on an older vehicle.
To take advantage of senior discounts, inquire about available offers when shopping for car insurance or renewing your policy. Regularly review your coverage to ensure it aligns with your current needs and driving habits. By staying informed and proactive, senior drivers can capitalize on their experience to secure lower insurance rates.
Military and Federal Employees Discount
Some car insurance companies offer discounts for federal employees or US Military members. The amount you can save through these price reductions varies significantly, but it typically runs an average of 12%.
Of course, some insurers, like USAA (United Services Automobile Association), only offer military car insurance. Their rates may be lower than those of other major insurers.
Some employers (typically larger employers) negotiate with major insurers to offer discounted rates to their employees. In some instances, these discounts can save you a substantial amount.
Remember that these price reductions typically remain effective as long as you stay with the same employer. If you don’t, you’ll likely lose the discount.
First responders, including police officers, firefighters, EMTs, and other emergency service professionals, play a vital role in their communities. To acknowledge their service and commitment, some insurance companies offer exclusive discounts on car insurance policies for these individuals and their families.
Types of First-Responder Discounts:
Some insurance providers offer direct discounts to first responders based on their profession. These discounts typically apply to the premium cost and may require proof of employment or professional affiliation.
Family Member Discounts:
In some cases, insurance companies extend first-responder discounts to immediate family members. This benefit recognizes the sacrifices made by the families of those who serve their communities.
Discounts for Professional Association Memberships:
First responders who are members of professional associations may have access to additional discounts through their membership. These discounts may be available through partnerships between the association and insurance providers.
Finding the Best Rates for First Responders:
Inquire About Discounts:
When shopping for car insurance or renewing your policy, ask your insurance provider about any available first-responder discounts. Be prepared to provide documentation to confirm your eligibility.
Not all insurance companies offer first-responder discounts. To find the best rates and coverage, it’s essential to compare quotes from multiple providers. This comparison will help you identify the most cost-effective option that caters to your unique needs.
By exploring available first-responder discounts and comparing insurance policies, first responders and their families can secure more affordable car insurance rates while ensuring adequate coverage.
Depending on the type of profession you’re in, your insurer may offer you a discount. Profession-based discounts differ from employer-based discounts — you only need to work in a specific industry, not with a particular employer. These are a few professions that commonly qualify:
- Doctors & Various Medical Professionals
Profession-based discounts tend to be modest but can sometimes reach as high as 18%.
Organizational discounts are similar to affinity discounts. If you’re a member of a professional, academic, or other organization, you might qualify for a discounted rate. Check with the organization and insurer to determine whether your organization qualifies before purchasing a policy.
Married Driver Discounts
There isn’t usually a single advertised rate for married drivers, but rates tend to be lower if you’re married. That’s because, statistically speaking, married drivers are often lower-risk and more financially stable. Most insurers will factor your marital status into your rate.
Driver Safety Car Insurance Discounts
Drivers who follow safe driving practices generally cost insurance companies less money. Fortunately, many insurers choose to reward these drivers with discounted policies.
Accident-Free and Good Driver Discounts
Some insurers offer good driver discounts. Generally, you’ll qualify if you have no car insurance claims history and a clean driving record. Some insurers look as far back as five years of your driving history to determine discounts for good driving. You can save around 10–30% on average with this discount.
Behavior-Based Discount Programs
Many insurers offer discounts based on how much and how safely you drive using a telematics insurance program. By tracking your driving habits through your car or an app, your insurance company can determine whether you qualify for a discount.
The average person drives 11,500 miles in a year; driving less than this makes you more likely to qualify for a behavior-based discount. Many of these programs offer an introductory rate reduction of about 5–10%. Over time, that can potentially increase to 10–15%.
Defensive Driving Course Discount
Defensive driving course discounts are another type of safe driver discount. Some insurers will offer savings of about 5–20% if you take an approved defensive driver course. Some of these courses are offered online.
Safe Driver Discount
With some insurers, a safe driver discount is the same as an accident-free or good driver discount. Other insurers let you use apps to track your speed, hard braking, rapid acceleration, phone use, and other factors while driving after you have signed up for a policy.
However, you need not rely on an insurer’s app for a discount. With SteadyDrive, you can track your driving for a few weeks. If you practice good driving behavior, you could get discounted quotes from multiple insurers.
It’s a competitive world for insurance companies. Most insurers also offer discounts that do not concern driver safety or demographics to attract more customers.
Customer Loyalty Discounts
You may qualify for a discount if you’ve simply been with the same insurer for an extended period. Generally, the longer you’ve been a customer, the greater the savings. Customer loyalty discounts can potentially save you up to 20% on your policy.
Multi-Policy Discounts & Bundling Insurance Discounts
You can save money on your car insurance rate by insuring multiple vehicles or combining homeowners insurance with your car insurance.
Automatic Payment Discounts
When you allow automatic payments, your insurer is more likely to be paid on time. As a result, you might be able to save 5–10% on your policy by setting up automatic deductions from your bank account.
Early Shopper Discount
If you’re thinking about switching insurance providers, this is an excellent discount to look for. It’s intended to reward customers who change their policy with some time to spare. Not all insurers offer it, but if they do, they usually require you to switch at least seven days before your current policy ends. You may save 2–15% on your policy with this discount.
When you pay for your entire insurance term up front, you can save on your total policy cost. Not all insurers have this option, but if yours does, you may be able to save 6–14%.
Sending insurance documents by mail is more costly than sending them electronically, so many insurers offer a discount if you choose paperless communications. Depending on the insurer, you can potentially save as much as 1–6% on your policy.
Safety or energy-efficient vehicle features may also qualify you for an insurance discount. Check to see if your vehicle qualifies you for these rate reductions.
Alternative Energy Vehicle Discount
Hybrid and electric cars can save you money on more than just fuel. Some insurers will offer you savings if you drive an environmentally friendly vehicle. However, the amount of the discount generally varies by state.
Discounts for Anti-Theft Devices
Stolen cars cost insurers money, so some of them will offer you a discount if your car has an anti-theft device like a steering wheel lock, a brake lock, or transponder keys. Depending on the insurance company, you may be able to save 5–25%.
New Car Discount
Newer cars tend to have fewer mechanical problems, so you might be able to save on your insurance premium if you drive one. Some insurers will give you this discount if your car is no more than three years old. Others have more stringent requirements. The new car discount could save you about 10–15% if you qualify.
Safety Equipment Discount
If your car comes with certain safety features, you may be able to save up to 20% on your insurance premium. Adaptive headlights, dual airbags, and electronic stability controls are three common qualifiers.
Discounts for Anti-Lock Brakes
Often, anti-lock brakes are lumped in with the more general safety equipment discount. But if your insurer does not offer a safety equipment discount, it might provide a separate discount of around 5–10% if you have anti-lock brakes.
Preferred Parking / Garaging Discounts
Some car insurers believe your vehicle is safer when you park in a garage or other private location. After all, secure parking lessens the risk of vandalism or theft. If your insurer does offer this discount, you might be able to save up to 5 - 15%.
How to Get Discounts on Car Insurance
Now you know about the many available auto insurance discounts. But how do you go about getting them? After all, most insurers don’t advertise every discount they offer prominently.
In some cases (often with the multi-car discount or safe driving discount), your insurer may automatically include the reduction when calculating your rate. In other cases (often with organizational deals or discounts for students with good grades), you may need to send the insurer additional documentation.
To make sure you know about all available discounts, it’s wise to contact your insurer directly. Many people sign up online without talking to a representative. Nothing is wrong with this, but you may miss certain discounts.
Speaking directly to an insurance agent might take some time, but saving money on car insurance costs is worth it.
It’s also a good idea to check with any organizations you’re a part of. Many employers offer employee perks that include insurance discounts. These may change from year to year.
Other Ways to Save on Car Insurance
Before committing to any auto policy, ensure you get the best rate possible. Here are some additional tips to help you save money on your car insurance.
Shop Around for Rates
Getting multiple car insurance quotes can seem like a pain, especially if you’re in a hurry to obtain coverage. However, different auto insurance companies can sometimes have large discrepancies in rates for the same or similar coverage.
To ensure you get the most accurate quote from each insurer, take your time and investigate all the discounts each one offers. If you anticipate needing coverage soon, do your best to give yourself time to investigate rates.
Compare Final Prices, Not Discounts
It’s easy to think that a larger discount always equals more affordable insurance coverage. Make sure that you don’t fall for this trap: always assess a policy’s total cost and the varying discounts you may be eligible for.
Some insurers may advertise large discounts because their rates are higher. One quote with no applicable discounts may be less expensive than one with several discounts.
Raise Your Deductible
This may not always be advisable, and you should only do it if you have enough money to set aside to pay the deductible (the amount you pay before your insurance company covers the rest) in case of a claim. But in many cases, even increasing your deductible by only a few hundred dollars can dramatically slash your rates.
Many people reduce their amount of coverage to save on their premiums. However, if you get in an accident, a low-coverage policy may leave you stuck paying a large amount out of pocket. Thus, raising your deductible could be the more financially sound choice.
Work on Your Credit
You already know that your credit score matters when applying for an auto loan. But do you know that it may also factor into your auto insurance rates? A 2015 study by Consumer Reports indicates that people with lower credit scores pay more in car insurance premiums.
Even increasing your credit score by a small amount can give you significant savings. So, if possible, consider paying down some debt or collections accounts. Also, avoid applying for new credit before getting a car insurance policy since new credit applications may temporarily lower your credit score.
The good thing about car insurance is that you won’t be denied coverage if your credit score needs work, but you might get a higher insurance rate. However, your premiums will likely decrease as your credit score goes up.
Compare Rates Before Purchasing a Car
If you don’t already have a car to insure, try getting quotes for each make and model of vehicle you’re considering. When deciding your insurance premium, your insurance will consider a vehicle’s age, price, safety record, risk of theft, and more.
Save on Car Insurance with SteadyDrive
In today’s economy, making your money go further is more important than ever. And thanks to SteadyDrive, it’s never been easier to save on car insurance! It only takes three simple steps to get started:
- Sign up — it only takes a few minutes, and it’s free!
- Download the app
- Drive safely
The SteadyDrive app tracks your driving behaviors, and if you’re a safe driver, you could qualify for a discounted quote from the nation’s top insurers to start saving on insurance.
RELATED: How SteadyDrive Can Save You Money
SteadyDrive is not an insurer or an insurance agent or broker. SteadyDrive does not provide you with an insurance policy, so make sure that you have insurance coverage while you drive. Please contact your insurer or an insurance agent or broker (if applicable) directly regarding questions you may have pertaining to auto insurance coverage. For more details, see SteadyDrive’s Terms of Service.
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