Vehicle insurance companies offer various discounts for many reasons because they want to encourage actions and behaviors beneficial to them. The key savings are offered to drivers who proved to be low-risk and unlikely to make a claim anytime soon. However, some of the discounts may have nothing to do with driving patterns but more about showing responsible behaviors like being a good student. And sometimes, it may just be due to special arrangements they have with the organization you are a member of.
As far as motorists are concerned, being aware of the saving opportunities is the starting point. Then, they need to assess if the company offering the discount is competitive at all and therefore worth aiming to qualify for them. For example, if you think the AAA insurers are offering great coverage, excellent customer service and cheap car insurance, you would consider joining the AAA so that you can buy coverage from them and save around 10% for doing so.
Here are some of the discounts and how you can qualify for them;
Good driver discounts are offered to motorists who have clean driving records with no accident and traffic tickets in the last 3 – 5 years, depending on the company. This is one of the largest saving opportunities and most companies offer them ranging from 20 – 30%. Hence, almost every company you apply for a quote would look at your Motor Vehicle Record and include the discount.
Continuous coverage discount is offered for people who have unbroken auto insurance history. Many companies start offering some savings even after 6 months but discounts can range from 10 – 20% depending on how long you had continuous coverage and the company offering it. Most companies count your time with other insurers as well.
Married drivers get around 5% better rates in comparison to single drivers with many companies.
Homeownership qualifies motorists for 4 – 8% savings. They may need to send in the proof of homeownership and they must have the same address on their auto insurance and vehicle registration documents too.
The biggest bundling discount is usually offered to homeowners who bundle their home and car insurance and overall savings can reach 15% with some insurers.
Multi-car insurance gives an opportunity to families to insure their automobiles under one policy and save around 14% on average. Many providers are flexible as to who can buy multi-car policies and often people can include cars belonging to other family members in their policies.
Paying the premium in full can reduce your car insurance premium by about 8% with many companies and all you need to do is settle the premium at once, if you can afford it.
Automatic payment plans allow motorists the option to pay in installment and still save around 4% by setting up an EFT.
Advance purchase is another good way of lowering your vehicle insurance a bit more. The discounts range from 4 – 14% and State Farm offers the largest savings with 14%. Motorists need to buy or renew their policies 7 – 14 days in advance to get it.
Online purchase discount is another easy one to qualify for. Motorists need to get a quote and buy their auto insurance policies online directly from the provider to save 4 – 8%.
A good student discount offered to single youngsters under the age of 25, in full time education and have at least B grades. This would also apply to your parents’ policy if you are listed there. It ranges from 7 – 20%.
Distant student savings are offered to parents of students who are at a college at least 100 miles away from home and can range from 4 – 16%.
Membership discounts are offered by several auto insurers through membership programs with Costco, the AAA, the AARP and savings are around 10%. Also, you may need to be a member to get insurance from Farm Bureaus.
Some associations have special deals with insurance companies and their members can get lower rates because of it. GEICO has deals with over five hundred associations.
Low mileage discounts are offered to motorists who travel less and they are on average 3 – 5%. Companies may require a proof with odometer reading.
New car discount is offered by several companies to the owners of cars less than three years old.
Usage-based discounts are offered to qualifying motorists after checking the data sent to the insurance company by telematic devices installed in cars. Some companies offer an immediate 10% discount for joining the program but other savings may be delayed since the company may wait for a safe driving pattern to emerge.
Discounts for switching vehicle insurance companies are common and range around 5%.
Most of these saving opportunities are offered by the majority of vehicle insurers. So, it isn’t hard to find them. Motorists should get a few quotes first and not worry about who offers the most discounts. Providing they fill out quote forms attentively, automobile insurers will automatically include the discounts you qualify for in their premium calculations.
This makes comparison shopping easier as you can look at the final price to determine which company offers the best rates for you. For example, Farmers offer about 23 discounts and State Farm only 10 but State Farm is often cheaper than farmers. So, you may get better prices from some companies because they offer fewer but larger discounts and have lower rates to start with.