Auto insurance can be quite expensive, especially if you live in a state with high minimum coverage requirements. Fortunately, most insurance companies offer a variety of discounts for customers based on their characteristics and driving habits. While you can't adjust factors that may raise your auto insurance rates, such as your age, you can get a better rate by taking full advantage of these discount programs. Explore this comprehensive guide about how to get a discount on car insurance.
Bundle Your Policies
Combining multiple vehicles or multiple types of insurance policies with a single provider can significantly lower your rates. If you live with other people, consider shopping for a joint car insurance policy to save. If you own or rent your home, Policy Genius recommends choosing an insurer that offers discounts for adding your renter's or homeowner's policy to the mix. NerdWallet reports that Nationwide customers save an average of $710 per year by bundling multiple policies, while State Farm offers up to 20 percent off for this type of discount.
Many insurance companies offer discounted family plans. This can save you money if you have kids who are old enough to drive and still live in your household. For example, USAA offers a discount of up to 10 percent for new customers ages 25 and younger whose parents are also customers. However, the company offers coverage only to members of the military, veterans, and members of their immediate families. Farmers Insurance also offers a 10 percent discount to customers who add a new driver to their policies.
Renew Your Coverage or Find a New Provider
You might qualify for a discount simply for renewing your policy. NerdWallet notes that many insurers offer this type of program at renewal time to avoid losing customers to other auto insurance companies with lower rates.
Conversely, you might also be able to get a discount by switching to a new insurance company. For this reason, Value Penguin recommends shopping around for coverage quotes at renewal time, especially if you aren't thrilled with your current insurance company.
According to the Insurance Information Institute, most drivers can save by shopping for a new policy every year or two. However, the agency also cautions that you should check the financial strength of a prospective insurer before switching by reviewing data from a reputable rating site such as Standard & Poor's.
Raise Your Deductible
The Insurance Information Institute notes that you can save money on your monthly premium by increasing the amount of your deductible. The deductible is the cost you pay out-of-pocket when you file a claim for damage under your insurance policy. Available deductible amounts usually range from about $250 to $1,000. The lower your deductible, the higher your policy premium.
Lower Your Coverage Limits
If you drive an older car, you can probably drop expensive comprehensive and collision coverage to save money on your auto policy. The Insurance Information Institute recommends looking up the value of your car with a reputable source such as Kelley Blue Book. Generally, you can remove these policies if your car is worth less than 1000 percent (10 times) of the premium you pay.
Adjust Your Billing Method
Some insurance companies offer discounts based on how you pay your premium. For example, you can often save by paying your premium cost in full instead of in monthly installments. Many companies also offer a paperless billing discount.
Limit Your Mileage
Most insurers offer low-mileage price breaks for customers who rarely drive. After all, the fewer miles you travel, the less likely you are to have an accident. If you fall into this category, Investopedia recommends researching a pay-as-you-go policy. Also known as usage-based insurance or telematics, this type of coverage tracks your driving behavior and allows you to save money if you drive less than a maximum threshold (usually about 10,000 miles per year). You can also save based on how safely you drive with a telematics policy, which requires the use of a smartphone app or small device plugged into your vehicle. Examples include the Drive Safe & Save program from State Farm, the Snapshot program from Progressive, and Drivewise for Allstate customers.
Maintain a Safe Driving History
You can qualify for a safe driver discount if you have a history free of tickets, violations, accidents, and other claims. For example, Investopedia reports that Travelers Insurance customers save between 10 and 23 percent on premiums if they have a clean driving history. Most insurance companies offer this type of price break after three to five years of driving without incident.
If you take a defensive driving class, you could also qualify for a discount. In fact, some states mandate that insurers offer a discount for drivers who complete an approved education program.
Ask for a Student Discount
You may qualify for insurance discounts as a full-time college student, especially if you leave your car at home and live in the dorms. Look for an insurer who will offer a lower rate if you rarely drive during the school year so you will still have coverage when you do go home on breaks.
Both high school and college students can often get discounted rates for good grades. Many insurers offer this type of discount if you maintain at least a 3.0 or a B average. For example, NerdWallet reports that State Farm offers a discount of up to 25 percent for good grades.
Install an Anti-Theft Device
Many insurers lower your premiums if your vehicle has anti-theft equipment. For one, GEICO customers can save up to 25 percent with a car alarm, LoJack, or similar system, according to research by Investopedia. Balance the cost of adding this type of device with the amount you can potentially save.
Ask About Other Discounts
In addition to these discounts, other common discounts from auto insurance companies include:
Savings for affiliation with an alumni association or club
Savings for customer loyalty
Eco-friendly electric and hybrid discounts
If you don't see the option for discounts when seeking auto insurance quotes, ask an agent to see whether you qualify for savings programs.
Check this out if you need additional information, resources, or guidance on car insurance. https://www.caranddriver.com/car-insurance/
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