The 6 Most Common Auto Insurance Discounts
Owning a car is beneficial but expensive. According to a study conducted by AAA in 2019, the average cost of owning a vehicle ranges from $730-$770 a month. AAA came up with these figures after considering factors such as car insurance, fuel prices, and license costs. This is why most people ask their insurance agents for discounts. There are many types of auto insurance discounts you might be eligible for. They vary from one insurance company to another.
What Are Car Insurance Discounts?
Auto insurance companies observe specific characteristics in drivers that help them evade accidents. They then reward such drivers with car insurance discounts to cut their car insurance costs.
For instance, people who work from home drive less often and are less likely to cause accidents. In such cases, insurers lower their coverage costs in the form of discounts.
Some state laws require insurance companies to offer discounts to their clients in an effort to help lower accident rates by encouraging good behaviors in drivers.
Types of Car Insurance Discounts
Now let us look at the best auto insurance discounts that you can ask for from your insurer.
Good Student Discount
This discount applies to student drivers enrolled at a college or high school and aged 16-25. You generally need an average grade of B to qualify for this discount. The reasoning behind this discount package is that intelligent students are less likely to cause accidents than their lower-scoring counterparts.
The good student discount ranges between 7 percent and 25 percent. But you will lose the discount if your grades drop or you reach the upper age limit. You must therefore make periodic updates of your performance to the insurer to verify that you are still eligible for the discount.
Defensive Driver Discount
If you recently took the defensive driver course to become a better driver, you should check with your insurer if they offer this discount. The defensive driver discount ranges between 5 percent and 10 percent.
Some companies might offer you a discount if you are willing to take the course. Others allow you to take any of their approved online courses. However, they prefer that you have hands-on experience in driving first. The defensive driver discount varies from one insurer to another. It can apply to drivers of a certain age, mostly 50 years and above. Other times, it applies to new drivers, especially where state laws mandate the discount.
Good Driver Discount
Auto insurers love good drivers, and it is for this reason that they award them with coverage savings. Good driver discounts come in two main types. The first one is offered to drivers who maintain a clean driving record, free of traffic violations and crashes. The second option allows drivers who use vehicle tracking services to save some money.
Your insurer will assess your driving record for a certain amount of time to award you this discount. For example, if you have not been involved in an accident in five years, your insurer might offer you up to 26 percent in potential coverage savings. These discounts range between 10 percent and 40 percent based on your insurer’s evaluation.
New Car Discount
A new car discount, also referred to as a low mileage discount, requires you to have a car less than three years old. Other auto insurance companies offer discounts to drivers who drive less than 15,000 miles per year. New car discounts range from 10 percent to 15 percent. It might not be much, but it still cuts down your premium costs.
According to National Highway Traffic Safety Administration, more than 40 percent of stolen cars go unrecovered. This means that insurers are liable for payment. Anti-theft discount is for drivers who have installed anti-theft devices in their vehicles. It ranges between 5 percent to 25 percent off your coverage. You can get this discount for both aftermarket and factory-installed anti-theft devices. It all depends on your insurer’s policy.
The anti-theft discount aims to encourage car owners to take action to prevent their vehicles from being stolen. It has reduced the number of claims significantly.
Multi-policy or Bundling Discount
Most insurers will offer you a discount if you purchase two or more policies together. Common examples of policies you can bundle together with auto insurance to get a discount are homeowners and renters. You can also bundle your recreational vehicle policy with your auto policy, such as RV or boat insurance.
A multi-policy discount often ranges between 5 and 25 percent and is one of the best discounts you can get in the market. However, certain insurers do not offer bundling discounts. You should consult your insurance company to find out.
How Can You Get a Discount on Your Car Insurance?
To make sure you’re getting the best discounts possible, consult with your insurance company. You might be a good candidate for auto insurance discounts that you are not yet aware of.
For instance, your insurer might not know that you have a clean driving record or that you’ve equipped your car with an anti-theft device.
What Are the Eligibility Requirements to Get Auto Insurance Discounts?
Eligibility requirements vary according to types of discounts and insurance companies. You can qualify immediately for some discounts, such as the multi-policy discount. Others, such as the defensive driving course, require you to complete an action to qualify.
The Bottom Line
Being a good driver and operating your car with the highest safety measures in mind can help you save money on insurance. Insurers love drivers with a clean record. You can qualify for a good driver discount if you avoid accidents and traffic violations.
A multi-policy discount can save you the most money out of any type of discount. However, you have to insure your car with the same insurance company that you use for your boat, RV, house, or motorcycle to qualify.
New car, student, and defensive driver discounts are quite easy to earn. To be eligible, you must be a student, own a new car, or take a defensive driver course.