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From great discounts on student and multi-policy insurance to safe driver savings, there are plenty of ways to save on your car insurance premiums.
Telematics-based Car Insurance Discounts
Written by: Daniel Robinson Written by: Daniel Robinson Writer Daniel is a writer for the Guide team and has written for a number of automotive news sites and marketing firms in the US, UK and Australia, specializing in the topics of car finance and car care. Daniel is the guide team’s authority on car insurance, loans, warranties, car service and more.
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Edited by: Rashawn Mitchner, Edited by: Rashawn Mitchner Managing Editor Rashawn Mitchner is an executive team editor with over 10 years of experience covering personal finance and insurance topics.
Using car insurance discounts can often be the difference between cheap car insurance and overpriced premiums. Fortunately, the best insurance companies offer a variety of discounts based on driving history, addiction, vehicle features and customer loyalty.
We, the team of guides, will explain the various car insurance discounts available to motorists and ways to reduce car insurance rates. Remember that prices can vary between insurance companies, so it’s important to shop around and compare quotes from several leading car insurance companies.
The Guide team is committed to providing reliable information to help you make the best possible decision about your car insurance. Because consumers trust us to provide objective and accurate information, we’ve created a comprehensive rating system to rank the best car insurance companies. We collected data from dozens of auto insurance providers to rank companies based on a variety of ranking factors. After 800 hours of research, the final result was an overall rating for each provider, with the top-scoring insurers at the top of the list.
Telematics Insurance Coverage
While each auto insurance company offers a slightly different range of auto insurance discounts, there are a few that are common across the industry. Most of these standard car insurance discounts can be broken down into the following categories:
Most insurance companies find ways to reward safe drivers. Here are some common types of car insurance discounts for those who maintain good driving habits:
After going three to five years without an accident, you can get big discounts with many of the best car insurance companies. The requirements for a good driver’s discount vary from provider to provider, so be sure to check with your agent if you’re eligible.
This type of discount comes with a telematics program that tracks your driving habits through a mobile app or plug-in device. If you avoid sudden stops, rapid acceleration and speeding by participating in such a program, you can often save up to 30% by renewing your policy with certain companies.
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Taking a defensive driving course usually only takes a few hours, but it can save you 10% to 15% on your car insurance premiums. Before signing up for a driving course, make sure it is approved by your provider. Some companies only offer these discounts to younger drivers and seniors.
If you only drive occasionally, you can save up to 20% on your car insurance premiums. The average driver puts about 12,000 miles on the odometer each year. Those who drive less than 7,500 miles each year often qualify for savings. Some insurance companies require a telematics device to verify mileage.
A driver profile often matters as much as driving behavior when it comes to car insurance discounts. These savings opportunities depend on the drivers’ personal characteristics:
Almost all car insurance companies offer some kind of discount to good students. This is great for customers as insurance rates are particularly high for drivers under the age of 21. Full-time students who maintain at least a “B” average often receive discounts of up to 25%.
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Discounts are available for college students who leave their vehicles at home while attending school 100 miles or more from home. This can also be called long distance study discounts.
USAA only provides insurance to active duty military members, veterans and their immediate families. Many other carriers offer military and veteran discounts of up to 15%. Discounts vary for federal employees, and Geico offers particularly generous savings for drivers in this group.
Insurance companies have different relationships with industry organizations and alumni associations. Geico is an industry leader that partners with more than 500 professional and college organizations to offer discounts.
Some insurance companies offer discounts to drivers 55 and older. You’ll also find incentives for drivers over 55 to improve their skills with online driver improvement programs.
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You can get many discounts in connection with your insurance with car insurance companies. Some of these discounts are automatically applied and you must apply for others. Here are some of the most common types of policy discounts:
These discounts are usually easy to find because insurance companies have many incentives to offer you different types of coverage. You can get a wide range of savings by bundling your car insurance with home, life, boat or other types of insurance. Some companies even offer a 25% discount on the total premium when you combine policies.
The savings options vary from discounts on multiple cars. Some insurance companies, such as State Farm, offer discounts of up to 25% if you add multiple vehicles to your policy. Many companies offer a 10% discount for insuring multiple cars.
Full pay, automatic pay and paper print discounts fall under this umbrella. By paying the full amount upfront, you often save around 10%, whether it’s six months or a year.
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By setting up automatic payments from your checking account, debit or credit card, you can save between 5% and 10%. By going paperless, insurance companies save costs and often reward them with a 10% discount.
You can also get special car insurance discounts related to your vehicle. Some companies even offer discounts just for insuring a new car. Here are some other common discounts on car accessories:
Installing an anti-theft cover can save you between 5% and 15% on comprehensive coverage, although it’s usually the cheapest element of total protection. If your vehicle is a frequent target of car thieves, it is worth having anti-theft insurance, even if the discount is small.
Many insurers offer a five to 10% collision premium discount for factory-fitted anti-lock braking systems (ABS). It is a good idea to ask the agent to confirm this discount as it should be applied automatically.
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This type of discount applies to seat belts and front airbags. You can save up to 30% on personal injury protection (PIP) or medical premiums (MedPay) just by having factory fitted seat belts and front airbags.
Usage-based programs can help good drivers save more on car insurance. Most leading auto insurance companies offer some type of discount based on usage, although many programs are not available in all states.
So how does it work? Telematics insurance programs monitor your driving habits in real time. They can do this using a mobile app, a plug-in device or a Bluetooth tracking beacon. Depending on the carrier and state, you may be able to select a device type. Most programs offer a sign-up discount, which is replaced by a discount based on your driving habits when your car insurance is renewed after the initial tracking period.
People who are careful and drive very little usually see the best car insurance discounts based on usage. If you practice bad driving habits while in a consumption-based program, you may simply be penalized with a reduced discount or no discount at all. But some programs, like Progressive’s Snapshot®, can actually increase your rates based on your driving habits. Let’s take a closer look.
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We at the guide team have evaluated all major car insurance providers to narrow down the best business insurance companies. Here’s how some of our top picks compare to regular car insurance discounts. Please note that discounts may not apply in all states.
Along with the standard discounts, these top providers offer some exclusive discounts that are unique to the company:
Geico is the only leading company that offers discounted auto insurance for federal employees at Eagle or above. Currently, the discount amount is 12% and it applies to the policyholder’s entire car insurance premium. Members of over 500 corporate and alumni groups can also receive a group membership discount.
USAA serves military members and their families, so they have some unique discounts on auto insurance. Drivers can get a 60% discount if they store their vehicles in a safe place, which can be useful during installation. USAA also offers a 15% discount on military base car storage.