Insurance companies price their auto insurance policies based upon a number of factors that have been shown to be predictive of loss costs. Companies have a number of auto insurance discounts that, if applicable, could save you money. While some of these discounts are commonly applied, some insurers have a host of credits available that are not well advertised. Many of the available discounts will only be applied if your agent is made aware of your eligibility, so it is important that you ask your agent about the available discounts and that you determine which ones you may qualify for.
Some Of The Most Commonly Used Auto Insurance Discounts Are:
- A Multi-Car or Package Discount: Often times insurers will provide a discount if you have multiple cars insured with them or if you place both your homeowners and your auto insurance with them. Discounts can be 10 percent or more;
- Good Student Discount: Often times insurers will offer a discount for drivers who are full-time students when they can provide a recent report card that shows achievement of grades above some qualifying threshold. Generally, these discounts only apply to students 21 years of age or less. As young drivers usually have high rates, good student discounts can often make a big difference in your premium;
- Alarm/Anti-Theft Device Discount: If your vehicle is equipped with an alarm system, a GPS vehicle locator program (such as OnStar or LoJack), or something similar, you will likely qualify for a discount;
- Safe Driving Discount: When you have few or no losses, accidents, or moving violations in the past 3 to 5 years, you generally qualify for significant discounts;
- Customer Loyalty Discounts: Many insurers have customer loyalty programs that reward you with additional credits or reductions in your deductible based upon the number of years you have been with them. Often times, these rewards are limited to drivers who have not had a claim in some specified period of time;
- Low Mileage/Pleasure Use Only Discounts: When consumers drive very few miles each year, there is often a discount in the rate. Tell the truth to your agent about your annual miles driven. If you drive to and from work each day, do not tell your agent that your use is pleasure only. Most insurers now have ways to check your annual miles driven for each vehicle. Honesty is always the best policy;
- Marriage/Domestic Partner Discount: Many insurers offer discounts to those who are married or partnered. If you are married or partnered, make sure you inform your insurance agent.
Other Discounts May Be Available To You That Are Not As Well Known:
- Advanced Shopping Credit: A number insurers provide lower rates when you shop for your insurance more than a certain number of days before it is to become effective. People who shop in advance of their expiration dates tend to be more responsible in the way that they drive too. So, shop early;
- Driver Training/Defensive Driver Training: Some insurers offer discounts to drivers who can prove that they took and passed a formal driver training or defensive driver training program. While these discounts are mostly limited to drivers aged 21 and under, some insurers offer discounts to more mature drivers who have recently attended similar training;
- Affinity Discounts: Insurers often have a variety of discounts that apply when you are a member of a given organization or group. Examples include:
- AAA members;
- AARP members;
- Sierra Club members;
- Graduates of a particular college or university (ask about your college or university);
- Active Duty or History of Service in America’s armed forces;
- Ask your insurance agent about what affinity discounts may be available.
- Paid In Full Discounts: Insurance companies will often provide a discount if you pay your premium in full up front. Sometimes, this discount can be significant. Ask your agent or broker about this option if you can afford it;
- Garaging Your Vehicle: Some insurers charge less if your vehicle is garaged vs. parked on the street. If you have the availability of off-street, secure parking, ask your agent about this as a potential discount;
- Occupational Discounts: Some insurers offer discounts to people who work in certain occupations. Some of the more common qualifying occupations are:
- Police Officers;
- Federal Government Employees;
- Ask your insurance agent about your occupation.
- Good Credit Discount: Many insurers use elements of your credit profile in their pricing plans. Generally, the better your credit, the higher the discount. So, managing your credit may improve your insurance premiums. A number of insurers only look up the credit profile of the first driver listed on the application for insurance, so it is advisable to list the member of your household with the best credit first on the application. (Click Here to see related article: Credit Score Drives Your Auto Premium.)
Discounts And Price Are Just One Part Of The Equation:
Discounts are a wonderful thing, and you should work with your insurance agent to make sure that all of the discounts that you may be eligible for are applied to your policy. However, the quality of the coverages provided, the type of claims service the insurance company provides, and the financial strength of your insurer are also important. Talk to your insurance agent about your limits and coverages first, then begin shopping for the best priced program that meets your individual needs.
Click Here to download A Consumer’s Guide To Auto Insurance, brought to you by the National Association Of Insurance Commissioners.
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