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Auto insurance is a requirement in almost every state in the country. Even if there is no requirement, it’s likely something every driver wants to have. Since auto insurance is more of a necessity than other types of policies and is used more often, it can be costly. This means that looking for a discount on auto insurance is even more critical for buyers.
Saving Money on Your Car Insurance
The key to reducing your auto insurance premium is to find as many discounts as you can take advantage of. Insurance companies provide many auto policy discounts, ranging from savings tied to lifestyle situations to automotive equipment. According to NerdWallet, many of these discounts are linked to a lower risk of the insurer having to pay higher claims, such as a good driving discount.
Driver Safety Discounts
As mentioned in Value Penguin, your driving habits will likely play an important role in the type of discount. Some of the largest discounts are related to driving skills that indicate you have a lower risk of having an accident. A common one is an accident-free discount. It usually requires you to be accident-free for three to five years and typically will be applied automatically once you have reached that goal.
Insurance.com says that safe-driver or good-driver discounts can take up to 10 percent off your premium if you are a more conservative driver. Many insurance companies now have programs that monitor your driving in order to qualify you for these discounts. These monitors look for speeding, aggressive braking, and other unsafe driving habits.
Another discount based on driving habits is the low-mileage discount, which rewards drivers who use their vehicles less often. Typically, this is for drivers who put less than 7,500 miles per year on their car.
Other Driver Discounts
You can also enjoy a discounted rate based on other factors. If your college student goes to school more than 100 miles away, and they’ve left their car at home, you can earn a 5 percent to 25 percent discount on auto insurance for that car.
Mature drivers may also see a discount, sometimes up to 10 percent, if they are over age 55. To earn this discount, drivers may be required to take a mature driver improvement course, which is similar to a defensive driving course.
You can also request a discount if you work for the government, either as a federal employee or part of the military. Some insurers will offer a direct discount of 8 percent to 15 percent, while other companies will provide less-expensive insurance for military members and their dependents.
Policy Car Discounts
How your policy is set up may also provide you with additional discounts and an overall lower premium. One of these discounts is known as the homeowner discount, which can be used when you have a homeowners policy along with the auto policy. In some cases, you can get the discount even if your policy is with another insurer. If your insurer offers this, the discount typically will be applied to the liability, personal injury protection, and uninsured/underinsured part of your premiums.
If you have more than one driver with a vehicle in your household, you will definitely want to take advantage of available multi-car discounts. Policy Genius mentions that putting additional cars on your policy can save you up to 25 percent. Typically, the vehicle owners will need to be related by blood or marriage to qualify.
Vehicle Discounts
Certain vehicle attributes will also gain discounts if they are designed to protect the car or the passengers. If you have a car anti-theft system, you can get a discount of 5 percent to 15 percent, Forbes states. These devices can help deter theft and make vehicle recovery easier but, in some cases, they can be more expensive than the discount. But if you can find one that makes the discount worth it, or would like the extra peace of mind, you can receive discounts for anti-theft systems that are GPS-based, such as OnStar.
Anti-lock brakes can also earn you a discount of up to 10 percent. Since the brakes must be factory-installed to qualify for the discount, they will be automatically included when the insurer provides your vehicle quote.
Passive restraints such as front airbags and seatbelts can also earn you a discount since they can significantly lower the risk of personal injury in the event of an accident. This type of discount can take anywhere from 25 percent to 30 percent off your premium price.
New-car discounts are available from some insurers, but the term “new car” can be different for each one. Sometimes, this discount may be allowed for cars up to a year old, but it will normally expire after three years.
Car safety equipment will also qualify you for additional discounts. Some of the equipment that may qualify you are daytime running lights and driver-assistance features.
Other Types of Auto Insurance Discounts
While there are several discounts related to lifestyle, affiliation, driving habits, and car features, there are also discounts that don’t fit in a broader category. These discounts include:
- Defensive driver: Some insurers will discount your rate if you take an approved defensive driving course.
- Good student: Students could earn up to a 25 percent discount if they maintain a B average or higher.
- Pay-in-full: With some insurers, you may receive a 10 percent discount if you pay the entire cost of your policy upfront.
- Paperless: Having your bills come to you electronically may offer a small discount.
- Alumni and professional associations: Belonging to certain alumni or professional groups can provide you with a discount.
- Bundling: Combining your auto policy with homeowners or other policies, such as renters, boat, or RV coverage, can get you a discount of up to 25 percent.
- Customer loyalty: Long-time customers may receive additional discounts when they purchase new policies from their insurer.
There is no shortage of discounts when it comes to auto insurance. So taking advantage of the available discounts can help you maximize your savings and get the lowest premium possible.
Sources:
https://www.valuepenguin.com/car-insurance-discounts
https://www.nerdwallet.com/blog/insurance/car-insurance-basics/car-insurance-discounts/
https://www.forbes.com/advisor/car-insurance/discounts/
https://www.insurance.com/auto-insurance/car-insurance-discounts.html
https://www.policygenius.com/auto-insurance/how-to-get-car-insurance-discounts/
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