Quick Facts About Auto Insurance Discounts
Are you looking for the biggest car insurance discounts? By the time you finish reading this article, you’ll know how to maximize all available discounts to your advantage.
Buying car insurance can be expensive, but does it have to be? Well, you can knock down your premium by taking advantage of discounts.
When you contact a car insurance company, make sure to always ask about available discounts. Every insurance company can offer you discounts depending on what you qualify for.
You can cut your total policy cost by up to 40% depending on your eligibility, the discount type, and the insurer.
How to Get the Biggest Car Insurance Discounts
According to the Insurance Information Institute and Investopedia, the following are ways to get the largest and best car insurance discounts:
- Shop Around Before Buying
- Group Insurance Discounts
- Multi-Policy Discounts
- Multi-Car Discounts
- Good Student Discount
- Homeowner Discount
- Customer Loyalty Discounts
1. Shop Around Before Buying
Shopping around and comparing car insurance quotes certainly pays off. That’s because prices vary from company to company. The best decision you can make is to get at least three price quotes from different companies.
You can call insurers directly or get information online. GEICO, State Farm, and others can help you get a quote for free.
Keep in mind that price is only one of many important things to look out for. Before you buy a car and obtain insurance, ask your friends and family for recommendations. You can always contact your state’s insurance department if you need more information about the company you’re considering. Also, you can speak with the insurance company directly if you have any specific questions.
2. Group Insurance Discounts
Some companies can offer you price reductions with a group plan. Such group plans may be available to you from your employer, clubs, or associations that you’re a part of.
Make sure to ask your employer to see if a group insurance discount is available to you.
3. Multi-Policy Discounts
Also known as bundling, it’s still one of the most significant discounts you can get in 2023. To bundle your insurance policies means purchasing at least two types of insurance from the same issuer. For example, you can buy auto and home insurance, which will usually give you the largest multi-policy discount. At insurers such as Allstate, the discount can reach as much as 25%.
Of course, you can bundle other types of insurance policies, like life insurance and auto insurance, but you typically get a smaller discount for that. Rarely will you be able to get a better deal with two different insurance companies. So, do you own a home? If you do, consider an insurance issuer that can package your home and car policies.
RELATED: Stacked vs. Unstacked Insurance: Everything You Need to Know
4. Multi-Car Discounts
Another significant discount is the multi-car discount. If you insure two vehicles together, you can pay a lower rate compared to insuring them individually. Buying insurance policies for two or more cars from the same issuer will get you a multi-car discount, which can be as high as 25% with some insurers. Of course, first, you should ask the insurance company if they offer this service.
5. Good Student Discount
This discount is only for full-time students with good grades. High school or college students will typically need at least a 3.0 GPA and will also need to be younger than 25 years old to qualify. Issuers that offer good student discounts, which can be as much as 25%, will want students to provide a record of their grades.
Generally, young drivers pay higher rates. That’s why some insurance companies reward good students with a discount, figuring that a young driver responsible in school drives responsibly. Statistics prove that this is true.
6. Homeowner Discount
You may be surprised that owning a home can get you an auto insurance discount. Insurance companies offer this discount even when the client buys home insurance from another company. The reason is that homeowners tend to be more stable than renters.
If you’re a homeowner, you can claim this discount and combine it with the multi-policy discount to achieve maximum results.
7. Customer Loyalty Discounts
If you’re a long-time customer or carry more than one insurance policy, you can get rewards for your loyalty. You may qualify for a discount when you move one of your insurance policies to your auto insurance company.
A little advice about loyalty discounts you should be aware of: Car insurers use a practice called price optimization. They charge their loyal customers higher rates since they are not likely to switch companies.
For that reason, it’s essential to compare auto insurance rates regularly. Note: Your final rate may still be higher at your current company, even with a loyalty discount.
Review Your Insurance Policy Annually
Remember to review your car insurance at least once yearly, speak to your car insurance company, and inquire about other discounts. Even though discounts save you money, remember to look at the total cost. It’s much more important than the number of discounts you receive.
Remember this last piece of advice: The best way to keep your premium low is by maintaining a clean driving record and a good credit score. These two factors can save or cost you tons of money.
Editor’s Note: This article has been updated for accuracy since it was originally published.
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