“I don’t need a discount for auto insurance” – No One Said Ever.
Auto insurance is a bit too high in some states and hence it makes it difficult for the drivers to afford it. But auto insurance is mandatory for every driver to get on the road in the United States.
When it comes to buying car insurance, we always have two options; one to buy it from a company which everyone is telling you about and pay whatever they ask, or second, do your research, compare the prices and get a list of auto insurance discounts to ask for.
This blog is your guide to inform you about the types of car insurance discounts you can get in your state.
Can Car Insurance Discounts Make A Significant Impact On The Final Premium Cost?
The formula for calculating the final premium cost of auto insurance is:
(Base Rate + Surcharges) – Discounts
- Base Rate: It is determined by your insurance agency after reviewing the risk factors
- Surcharges: The charges that add to the Base rate based on your driving tickets. It can be a speeding ticket or a DUI.
- Discounts: As per your eligibility the company will evaluate your profile and decide the discount you can get.
From this formula, it is clear that the more discount you get, the more impact it will make on the final premium cost. Let’s have a look at five car insurance discounts you should ask about your insurance carrier.
Car Discounts based on the Profession of the Driver:
Some states and insurance agencies provide low income car insurance to drivers who have a very low earning profession. There are certain professions that get special consideration by most of the insurance agencies. Some of these are military employees, federal employees, professionals like lawyers and teachers, etc.
Let’s have a look at these professions and how much discount they get from insurance providers.
Discounts on Auto Insurance for Military and Federal Employees
Drivers under this category usually get an 8 to 15 percent discount.
There are insurance companies in the USA that honor the citizens who are serving the nation. Veterans or Retirees who were in the military or federal services also get retirement discounts from insurance companies. Insurance companies like USAA have a separate- exclusive auto insurance model for the defense and military personnel.
Car Insurance Discounts for Organizations
The insurance companies provide a 2 to 10 percent discount for this category.
Insurance providers try to do partnerships or affiliations with big organizations, companies, or universities. The employees of the company or alumni of the university get a special discount when they buy car insurance from that company.
Car insurance Discounts for Good Students
Students with good academic score can get a 5 to 25 percent discount
Students who have maintained a B average throughout getting discounts as high as 25 percent from certain insurance companies. It requires the driver to be a full-time student and the insurance company will ask for proof of scholastic records.
Auto Insurance Discounts for Away-from Home Students
Students away from their home can get a 5 to 25 percent discount.
This discount is for the parents whose children went out of the city to study or for a job. If you know that no one is going to use that car, then you just have to inform the insurance agency. The company will check if the driver is over 100 miles away from its parents and will provide a discount of up to 25 percent.
Car Insurance Discounts for the Senior Driver
Senior drivers get a 5 to 10 percent of discount
Drivers in the United States with an age of over 55 years get a mature or senior person discount. Most of the companies require the driver to receive a certification of the Mature Driver Improvement Course. This course helps the drivers to brush up their knowledge about defensive driving tips.
Do you have clean driving record? Get discounts on auto insurance.
Features in Your Car Discount
Insurance companies give discounts to drivers who have more safety features. If your car comes with features like anti-lock brakes, anti-theft devices, or VIN stitching, you will get discounts.
Here are the features which provide a bit of assurance to the insurance company and as a result provides you some discounts:
Passive Restraint Equipment:
Drivers get a 25 to 30 percent discount for this feature
Passive restraint equipment includes seatbelts and airbags. If the car has this equipment, the company usually provides a good discount amount on the personal injury protection or medical payment coverage of the policy.
Anti-Theft Car Feature
This feature gives a 5 to 15 percent discount to the driver
Most of the high-end cars come with anti-theft features, but if your car doesn’t have one, then we recommend not to spend extra money on it. The insurance company provides this discount on comprehensive coverage premiums. Which is not much as compared to the cost of buying anti-theft devices?
New Car Discount
New Car Owners gets a 10 percent discount
This discount depends majorly on the insurance carrier and the state. We always recommend drivers to check the car insurance rates by state before buying a policy. Each company has its regulations to consider a car new. Moreover, some insurance companies also create a contract for a specific amount of time with a discount. It can be for two years or five years depending on the insurance provider.
Insurance Companies provides 5 to 10 percent ABS discount
Mostly an insurer checks if the ABS is factory-installed or not to approve this discount. We recommend, always verify with your carrier before making the payment. Based on the type of the car and policy a driver might save between $20 to $100 per year.
Vehicle Usage Based Discounts
With the latest technologies, tracking human behavior has become effortless. Insurance companies also leverage technology to track the driving behavior of the driver. There is a gadget that is capable of monitoring the real-time data of the driver.
Once a driver gets into the contract with the insurance carrier, it will insert a gadget into the OBD port of the vehicle. This gadget acts as a widget and measures metrics like mileage, average speed daily, driving time, and even braking activity.
The company then collects your data for 6 months and based on that it decides if you are eligible for a discount. Please note; Sometimes if the data reveals harsh driving or speeding, the cost of the premium might increase.
Safe Driving Discount
This type of auto insurance discount is to promote safe driving by rewarding good driver habits.
The percent of discount depends on the company
Insurance companies keep a check on the record of the driver. The drivers with more than 3 years of accident-free record get a good discount on the premium. This discount is applied automatically at the time of upcoming renewal after 3 years.
Safe Driver Discount
The insurance provider gives 10 percent of safe driver discounts
A driver will be declared a safe driver if he or she has conversation habits. These habits include driving at low speed, making sure all the passengers wear seatbelts and less aggressive braking. Some companies combine safe and good driver discounts, try to make it clear with your company.
Low Car Usage and Mileage
This discount can vary as per the insurance companies up to 20 percent
If you are sure that you don’t drive your car much, then this discount can save you a good amount of money. All you have to do is inform your insurance agent that you don’t use your vehicle much and you are eligible for the discount. You might have to agree to install their driver monitoring technology to get the discount.
Defensive Driving Discount
The driver gets a 10 to 15 percent discount
To get this discount, the driver has to take defensive driving lessons from a registered or certified school. After completion of the course, the driver will be eligible to get a discount on personal injury, collision, and liability coverage.
Discount Based on Your Policy
This type of car insurance discount depends on your type of policy. There are certain discounts you can have either by altering your policy or by asking the company for the discount.
Let’s have a look at each type one by one:
Buying Insurance for more than one Car Discount
A driver can get up to 25 percent of savings from this discount
This happens when a driver with over one car buys the insurance for all of them from one company. The company then combines the policy for each car and provides a discount of up to 25 percent to the driver. The percentage and amount of discount depend on several factors like the type of car and duration of the policy.
Auto Deduction Discount
It can be a fixed amount of $30 or between 5 to 10 percent
This discount type is available with the companies that have the infrastructure to manage the billing process online. When a person selects auto deduction, the insurance company gets some assurance about the on-time monthly premium. And Hence; they give a small discount to promote this method of payment.
This varies for every insurance provider, mostly it is up to 3 percent
Homeowners discount is provided by some limited companies. This discount is valid when a driver has his own house. The insurance carrier gives up to a 3 percent discount to the driver, even if the home insurance is not from their company.
The driver can get a 5 to 25 percent of discount
This discount is applicable when the driver buys other insurance from the same company. For example, a driver wants to buy insurance for the house. The company will bundle up the two policies and provide a discount of up to 25 percent. The more assets a driver protects by buying the insurance from the company, the more discount company provides.
Early Policy Renewal Discount
The insurance company provides a 3 to 10 percent off discount for this type.
When a driver buys a discount before expiring the previous one, the company provides this early renewal discount. The time of your renewal also affects the discount amount, and it varies for a different company. Some companies allow the renewal of only 3 days before the expiration, some allow a month prior.
Complete Payment Discount
Insurance companies provide 5 to 10 percent discount for this type of discount
When a driver pays the entire annual or half-annual premium amount upfront, then this discount comes into the picture. The company rewards the advance payment option and hence provides a 5 to 10 percent of discount. This discount has a separate page, so make sure you ask the agent for this discount, before making the complete payment.
Customer Loyalty Discount
Depends on the insurance company
This type of discount is important because of the increasing competition among insurance companies. To keep their customers for a long time, the insurance agencies provide loyalty discounts. This discount varies with every company; some provide this separately, some bundle it with another discount.
Start Comparing and Get Lowest Rates for Your Full Auto Insurance Coverage Policy.
How to Get Discounts on Car Insurance?
Now that you are aware of the types of insurance discounts available for the drivers, it is important to have a look at the ways to get the best discount. Following are a few things to keep in mind:
- Clear the coverage terms
It is common to get distracted by the discounted price of the policy. Have you ever noticed there’s always a copy of every brand available in the market? The copy is always cheaper because it looks like a branded product.
But when it comes to quality and durability, it is nowhere around the brand. The same happens when buying a huge discounted policy. Sometimes it’s not what it seems.
- Be aware of the price optimization model
Insurance agencies use price optimization as a method of calculating how much a customer can pay. Along with that price, optimization provides information on how much the customer will tolerate the increase before switching.
Make sure you are not sending any signals to the company that you are capable of paying more premium.
- Shop Around
It is highly recommended to change your insurance provider every year or every two years. Customer loyalty is not much appreciated in most insurance companies. Before renewing your policy every year, make sure to shop around and compare the pricing.
- Don’t push yourself to get discounts
Most of the time; drivers end up paying more to get discounts. For example, high-end safety features can get you a discount of 20 percent. But these safety features include anti-theft devices which cost hundreds and thousands of dollars. Compare the actual discount you will get after adding these devices.
- Don’t Buy The Extra Coverage If You Don’t Need
Some companies push the drivers to get full coverage insurance by giving them good discounts and deals. If you feel you don’t need full coverage and it is not mandatory in your state then you can avoid spending extra money.
Wondering If Your Company Provides All of the Above Mentioned Car Insurance Discounts?
Every insurance carrier has its own rules and methods. Hence we created this detailed list of all the top insurance agencies in the USA.
|Discount||Description||Esurance||21st Century||Geico||AAA||Liberty Mutual||Mercury||Farmers||Metlife||Progressive||The General||Safeco|
|Affiliation/Affinity||Employer, school, team, club, or membership in the participating group||Yes||Yes||Yes||Yes||Yes||Yes||Yes||–||–||–||–|
|Good Student||New or Student drivers with a GPA of 3.0 or higher||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Anti-lock Brakes||Modern braking systems||Yes||Yes||Yes||–||Yes||Yes||Yes||Yes||–||Yes||Yes|
|Daytime Running Lights||Modern lighting systems||–||–||Yes||–||–||Yes||Yes||–||–||–||–|
|Claims Free/Accident Free||Filed zero claims in previous 3 years||Yes||Yes||Yes||–||–||–||Yes||–||–||–||Yes|
|Distant Student||Students with 100 plus miles distance from home and travel by car||–||Yes||–||Yes||–||–||Yes||–||Yes||–||Yes|
|Driver Training||Younger drivers who complete approved course||–||Yes||Yes||Yes||–||Yes||Yes||Yes||–||Yes||Yes|
|Defensive Driver||Completely approved defensive driving course.||Yes||Yes||Yes||–||–||–||Yes||Yes||Yes||–||Yes|
|Early Signing||Switching carriers before renewal date||Yes||Yes||–||–||Yes||–||Yes||–||–||Yes||–|
|Full Payment||Upfront premium payment for the entire year||Yes||Yes||–||–||Yes||–||Yes||–||–||Yes||Yes|
|Good Driver||No moving violations / accidents last 3 to 5 years.||Yes||Yes||–||Yes||–||Yes||Yes||Yes||–||Yes||Yes|
|Anti-theft Devices||For cars with theft protection devices like alarms or steering wheel locks||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||–||–|
|Green Vehicle||Hybrid, electric or alternative fuel||–||Yes||–||–||Yes||–||Yes||–||–||–||–|
|Loyalty||Policy in force for 1 year||–||–||–||Yes||–||–||Yes||–||Yes||–||Yes|
|Homeowner||Own house or condo||Yes||–||–||–||–||–||Yes||–||Yes||Yes||Yes|
|Multiple Policy||Auto policy combined with home or other insurance from the same carrier||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||–||Yes|
|Passive Restraint||Car with airbags along with automatic seatbelts||Yes||Yes||Yes||Yes||–||Yes||Yes||Yes||–||Yes||–|
|Low Mileage||Covers below 7500 – 15k miles per year||Yes||–||Yes||Yes||–||Yes||Yes||Yes||–||–||Yes|
|Multiple Vehicle||Buying auto insurnace policies for all the different cars from the single carrier||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Mature Driver||55+ w approved course||Yes||Yes||–||–||–||–||Yes||Yes||–||–||–|
|Military||Household member of active defence service members||–||Yes||Yes||–||–||–||Yes||–||–||Yes||–|
|Newer Vehicle||Bought in 3 years or newer||–||Yes||–||–||–||–||Yes||–||–||–||–|
|Paperless/Autopay||Online automatic premium payment||–||Yes||–||–||Yes||–||Yes||–||Yes||–||–|
Buy Your Policy Wisely!!
Buying auto insurance in the USA is not as simple as it sounds when you need to save money. It requires time and effort to search for the different types of discounts and the right policy as per the requirements.
Keeping that in mind we at RateForce have the only objective to provide the best and cheapest car insurance to our customers. Get updated information about the latest discounts and policy premiums from the top insurance companies in your city.