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From great discounts for students and multi-policy insurance to savings for safe drivers, there are dozens of ways to save on car insurance premiums
Auto Insurance Premium Savings
Written by: Daniel Robinson, Written by: Daniel Robinson Author Daniel is a writer on the Guides team and has written for a number of automotive news sites and marketing companies in the US, UK and Australia, specializing in topics such as car finance and car care. Daniel is an expert on the Guides team for car insurance, loans, warranty options, car services and more.
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Edited by: Rashawn Mitchner, Edited by: Rashawn Mitchner Managing Editor Rashawn Mitchner is an editor on the Guides team with over 10 years of personal finance and insurance experience.
Taking advantage of car insurance discounts can often be the difference between cheap car insurance and overpriced premiums. Fortunately, top insurance companies offer dozens of discounts based on driver history, affiliation, vehicle features and customer loyalty.
We at the Guides team will explain the different types of car insurance discounts available to drivers and ways to reduce car insurance premiums. Remember that prices can vary from insurance company to insurance company. That is why it is important to shop around and compare offers from some of the best car insurance companies.
The Guides team is committed to providing reliable information to help you make the best possible decision about insuring your vehicle. Because consumers depend on us to provide objective and accurate information, we have created a comprehensive rating system to create our ranking of the best car insurance companies. We collected data from dozens of auto insurance providers to evaluate the companies based on a variety of ranking factors. After 800 hours of research, the final result was an overall rating for each provider, with the highest scoring insurers at the top of the list.
The Ultimate Guide To Saving On Car Insurance
While each auto insurance company offers a slightly different range of auto insurance discounts, there are some that are common across the industry. Most of these standard car insurance discounts can be grouped into the following categories:
Most insurance companies find ways to reward safe drivers. These are some of the common types of car insurance discounts for those with good driving habits:
If you stay accident-free for three to five years, you can get significant discounts from many top auto insurance companies. The requirements for a good driver’s discount vary from provider to provider. So remember to ask your agent if you qualify.
This type of discount comes with the use of a telematics program that tracks your driving habits – either through a mobile app or a plug-in device. If you avoid sudden stops, rapid acceleration and speeding while participating in such a program, you can often save up to 30% when you renew your insurance with some companies.
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Completing a defensive driving course usually only takes a few hours, but can save you 10 to 15% on your car insurance premiums. Before signing up for a driving course, make sure it is approved by your provider. Some companies only offer these discounts to younger drivers and seniors.
If you only drive occasionally, you can save up to 20% on your car insurance premiums. The average driver has about 12,000 miles on the clock each year. Those who drive less than 7,500 miles per year are often eligible for savings. Some insurance companies require a telematics device to check mileage.
When it comes to car insurance discounts, driver profile is often just as important as driving history. The following savings options are based on the driver’s personal characteristics:
Almost all car insurance companies offer some kind of discount to good students. This is an advantage for customers as insurance premiums are particularly high for drivers under the age of 21. Full-time students who have at least a “B” average are often eligible for great student discounts of up to 25%.
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There are also discounts for students who leave their cars at home while attending school 100 or more miles from home. These can also be referred to as student discounts for distance learning.
USAA offers insurance exclusively to active military members, veterans and their immediate families. Most other providers offer discounts of up to 15% to military members and veterans. Discounts for federal employees vary, with Geico offering particularly generous discounts to drivers in this group.
Insurance companies have various connections with industry organizations and alumni associations. Geico is the industry leader here, partnering with over 500 professional and academic organizations to offer discounted rates.
Some insurance companies offer discounts to drivers aged 55 and over. In addition, you’ll find incentives for drivers over 55 to improve their skills through online driver improvement programs.
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There are many insurance-related discounts when it comes to car insurance. Some of these discounts are applied automatically, others you have to request. Here are some common types of policy discounts:
These discounts are usually easy to find because insurance companies have many incentives to get you on different types of coverage. Combining your car insurance with home, life, boat or other types of insurance can give you a lot of savings. Some companies offer up to 25% off the entire insurance premium when you bundle policies.
The savings potential varies depending on the multi-car discount. Some insurance companies, like State Farm, offer discounts of up to 25% when you add multiple vehicles to your policy. Many companies offer discounts of 10% for insuring multiple cars.
This term includes full pay, automatic payment and paperless statement discounts. If you pay the full premium upfront, you can often save around 10% – either for a period of six months or a year.
Average Cost Of Car Insurance In 2023
By setting up automatic payments from a checking account, debit or credit card, you can save 5 to 10%. Going paperless saves insurance companies on some fixed costs and therefore often rewards this with a 10% discount.
Information about your vehicle can also get you special discounts on car insurance. Some companies even offer discounts just for insuring a new car. Here are some other common discounts related to vehicle features:
Installing an anti-theft device can save you five to 15% on your comprehensive insurance, although it’s usually the cheapest element of your overall protection. If your vehicle is a frequent target for car thieves, installing an anti-theft system is a good idea, even if the discount is small.
Many insurance companies offer discounts of five to 10% on your comprehensive insurance premium for factory installation of an anti-lock braking system (ABS). Please ask your agent to confirm this discount as it should be applied automatically.
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This type of discount applies to seat belts and front airbags. You can save up to 30% on your Personal Injury Protection (PIP) or Medical Insurance (MedPay) premiums by simply installing factory seat belts and front airbags.
Usage-based programs can help good drivers save more on car insurance. Most leading auto insurance companies offer some form of pay-as-you-go discount, although many programs are not available in all states.
So how does it work? Telematics insurance programs track your driving behavior in real time. You can do this via a mobile app, a plug-in device or a Bluetooth tracking signal. Depending on the provider and state, you may be able to select the device type. Most programs offer a discount for signing up, which is replaced by a discount based on your driving habits when your car insurance is renewed after the initial tracking period.
Those who are careful and don’t drive often see the best usage-based discounts on auto insurance. If you engage in bad driving habits while participating in a pay-as-you-go program, you may be penalized simply by receiving a reduced discount or no discount at all. However, some programs, like Progressive’s Snapshot®, can actually increase your rates based on your driving habits. Let’s take a closer look.
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At the Guides team, we have evaluated all the major car insurance providers to select the best insurance companies in the industry. Here’s a look at how some of our top picks work when it comes to regular car insurance discounts. Please note that discounts may not be available in all states.
In addition to standard discounts, the following top suppliers offer some unique discounts for companies only:
Geico is the only leading company to offer a discount on auto insurance to federal employees at the Eagle level or higher. At this point, the discount amount is 12% and applies to a policyholder’s entire car insurance premium. Members of over 500 corporate and alumni groups can also receive a group membership discount.
USAA targets military members and their dependents and therefore offers some unique discounts on car insurance. Drivers can get a 60% discount if they keep their vehicles in a safe place, which can be useful when deployed. USAA also offers a 15% discount for storing a vehicle on a military base.
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Progressive is the only company on our list of top providers that offers discount car insurance just for teenagers
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