What Types of Discounts do Auto Insurance Companies Offer?

March 16, 2018


You need car insurance – it’s the law. That doesn’t mean you have to overpay for it, though. Shopping around and finding auto insurance companies that offer the largest discounts is crucial. While each company has their own requirements, you can count on a few discounts almost anywhere.

Multi-Policy Discount

If you need more than one type of insurance, it’s best to get them all form one company. This way you can get the multi-policy discount. Even insuring two cars with the same company may net you a small savings.

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The largest discount generally occurs when you bundle homeowner’s and auto insurance. However, many companies offer discounts for other combinations. If you have life, health, and car insurance, discuss your options with several agents. You might be surprised to see how much you might save by bundling.

Good Driving Habits

Auto insurance companies generally offer discounts for ‘less risky’ drivers. Keeping a clean driving history can help you get this discount. This means no accidents or tickets for not following the rules of the road. Insurance companies base their premiums on the likelihood they will have to pay out in the future. If you prove you are not a ‘bad’ driver, they may give you a break on your premium.

Good Grade Discounts

Good grades don’t just get you into a good college. They can also save you money on your car insurance. Most auto insurance companies require a B-average or a 3.0 GPA. If a student has good grades, it shows that they are responsible. As a result, they decrease the risk for auto insurers, netting them a decent discount on their premiums.

Safety Features on a Vehicle

New cars are often privy to good discounts because of the safety features they contain. Anything that lowers the risk of something happening to you or your car can lower your insurance premiums. A few most common include:

  • Airbags
  • Anti-lock brakes
  • Anti-theft systems

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New cars often include new technology, which could mean more safety features. If you add anything after-market to your car that could lower the risk of theft or damage to yourself, make sure to let your insurance agent know.

Low Miles Driven

If you aren’t a frequent driver, you may get a discount for this. The fewer miles you drive, the less risk you pose for the insurance company. Ask each company what their threshold is for the ‘average’ driver. Then determine if you drive less than that amount. If so, let your insurance agent know because you could get a decent discount on your premium.

Full Payment Up Front

Most insurance companies offer the option to pay your insurance monthly. However, if you have the money and can pay the full premium every six months, you may get a small discount. If nothing else, you’ll save the extra few dollars insurance companies charge as a ‘convenience fee’ for monthly payments. However, most companies give a percentage off for those willing to pay for their insurance up front.

Miscellaneous Discounts

The above discounts are the most common. However, there are a few more some companies may offer. They include:

  • Professional organization – If you below to a specific organization, they may have worked out a deal with certain auto insurance companies
  • Auto club – If you have an AAA membership or any other auto club membership, it may net you a discount
  • Driving classes – If you take driving classes, especially defensive driving classes, you may get a small discount

Of course, each insurance company differs, so you’ll have to shop around. These discounts are the most common and are offered by most auto insurance companies. It pays to ask about these and any others they may offer in order to help you save on this costly, but necessary bill.

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