Driver Safety Car Insurance Discounts
These types of car insurance discounts reward drivers for their good driving habits. These are the most common discounts across insurers, and make up a sizeable chunk of consumers’ savings on car insurance rates.
|Discount name||Companies that offer the discount|
|Defensive driving||State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers|
|Accident-free||State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers|
|Safe driver||State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Liberty Mutual|
|Low mileage||State Farm, Allstate, Travelers, Nationwide, Progressive|
Improve Your Credit Rating
A drivers record is obviously a big factor in determining auto insurance costs. After all, it makes sense that a driver who has been in a lot of accidents could cost the insurance company a lot of money. However, folks are sometimes surprised to find that insurance companies may also consider when determining insurance premiums.
Why is your credit rating considered? Michael Barry, senior vice president and head of media relations of the Insurance Information Institute, puts it this way:
Many insurers use credit-based insurance scores. Its a contentious issue in certain statehouses… insurers will say their studies show that if youre responsible in your personal life, youre less likely to file claims.
Regardless of whether thats true, be aware that your credit rating can be a factor in figuring insurance premiums, and do your utmost to keep it high.
What About Bundling Insurance
Another way to save: Bundling your homeowner’s or renter’s insurance and auto insurance policies.
You’ve probably heard TV and radio commercials advertising this technique and perhaps thought it was just a trick to get your business. But bundling actually can save you money sometimes more than you think.
For example, I helped a woman get a quote on car insurance from State Farm a few months back and it turned out she didn’t have renter’s coverage. That insurance costs about $115 per year, and by bundling renters and car insurance, she saved $213 on a year’s worth of auto insurance.
That meant that not only was her renter’s policy effectively free, but she saved an additional $98. It’s almost as though the insurer paid her to have additional coverage.
Working to improve your credit can also lower your car insurance premium in many states. According to the National Association of Insurance Commissioners, an on-time payment history and the size of your outstanding debt have the most weight.
While it’s hard to compare different insurance policies from different drivers side by side due to the number of factors that go into an insurance premium, including type of vehicle, driving history, and location, a 2021 Bankrate.com survey found that the annual premium for someone with a poor credit score was $3,026 but it was $1,487 for someone with an excellent credit score.
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Get Discounts For Installing Anti
Individuals have the potential to lower their annual premiums if they install anti-theft devices. GEICO, for example, offers a potential savings of 25% if you have an anti-theft system in your car.
Your insurance company should be able to tell you specifically which devices, when installed, can lower premiums. Car alarms and LoJacks are two types of devices you might want to inquire about.
If your primary motivation for installing an anti-theft device is to lower your insurance premium, consider whether the cost of adding the device will result in a significant enough savings to be worth the trouble and expense.
Invest In Driver Training
Insurance is much more expensive for new and young drivers who don’t have a lot of driving experience or a history as an insured driver. Taking a Ontario Ministry Of Transportation approved drivers training course will qualify young and new drivers for additional savings.
More importantly, it will teach you how to become a safe and effective driver and establish good driving habits.
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Take Care Of Your Vehicle
Keeping your vehicle maintained not only makes it safer on the road, but you may be able to get a discount on your insurance. For example, in Ontario, insurance companies are required to offer lower car insurance premiums if you have winter tires. At isure, not only will you get a winter tire insurance discount, but ask us about our free tire coverage through isure-approved CAA Insurance. It covers you if a road hazard damages your tires.
Six Tips For Saving Money
At HUB International, we have several strategies for saving money that we discuss with our clients:
You can take advantage of discounts such as Good Student, which rewards teens with a grade point average of B or higher. If your student is eligible for this discount, it may save you hundreds of dollars on your car-insurance premium.
Completing defensive-driving courses can also earn you and your teen significant monetary credits toward your policy premium. Even more, your teen will hopefully drive away from this course with a better understanding of how to keep safe behind the wheel. Since even minor fender benders can drive up your insurance costs, its critical that your teen as well as all other family members listed on your policy do their best to keep their driving record clean of any accidents and moving violations.
Investing in accident forgiveness can limit the financial impact in the event your teen does get in a car accident. Since 16-year-olds have higher crash rates than drivers of any other age, we recommend that our clients with teens strongly consider this endorsement, which can cancel out the surcharge points that are typically assessed by your insurer after an accident.
Are you adding a vehicle to your household for your teen to drive? Look for a car with safety elements, such as anti-lock brakes, airbags, and anti-theft devices, as insurers will often reward you for having these features with lower car-insurance rates.
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Stop Worrying About Your Stupid Credit Score
Youve probably heard that you can get a better rate on car insurance if you improve your credit score. And that may be true with some insurers. But heres the thing . . . Credit scores are bogus! Theyre totally made up, and the sad thing is, the financial industry has convinced people that these made-up numbers matter.
In reality, your is just an I love debt score. Its based on how much debt you have, how long youve been in debt, what type of debt you have and whether youve made your payments on time.
So lets think about this again . . . When someone tells you that you should build your credit to save on car insurance, theyre reallytelling you to take on more debt, pay more money in interest and tie up more of your income in monthly payments. Thats stupid!
You know what works better? Paying off your debt. When you dont have any minimum payments or interest to worry about, all your income goes into your pocketand you can afford any car insurance you want.
Oh, and that credit score you used to be so worried about? Youll see pretty quickly that you can live without it.
Keep Young Drivers On A Parent’s Policy
Having a young driver on their parentsâ policy usually results in much lower auto insurance costs. Compared to the cost of insuring a teen driver on their own policy, we found that adding young drivers to their parents’ plan can save 66% on car insurance.
However, if your teen has a history of accidents, claims or tickets, expect higher insurance rates whether your teen is on your policy or their own. Itâs wise to explore pricing for both a separate policy for your teen driver versus keeping them on the family policy in this case.
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Savings For Signing Early
When you shop for insurance before your current policy expires, look out for the early signing discount. This tends to be a rarer discount â less than half of the major insurers we’ve looked into offer it. When it is available, you can get 3% to 10% taken off your total policy premium, depending on how far in advance you sign up for the policy. Travelers, for example, offers this discount if you sign up three days ahead of your current policy’s expiration.
Remove Unnecessary Coverage On Older Vehicles
With the diminishing value of an aging vehicle, youll want to determine if the deductible youll pay in the event of a claim and if what you pay is worth it.
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Consider Lower Coverage For Older Vehicles
Older cars may not deserve the same insurance attention as your shiny new Tesla or all of the bells and whistles of a Mercedes-type policy. If your car is on its last go-round, you may want to cut out collision coverage or comprehensive coverage for that vehicle, both of which cover damages to your car.
Whether you should drop either coverage depends on the value of your car and the relative cost to insure it. Experts suggest that if your car is worth less than 10 times the annual premium, buying coverage for that vehicle may not be a cost-effective option. One of the quickest ways to check the value is by scrolling through Kelley Blue Book online. For example, say your annual premium is $1,600 10 times that would be $16,000. If your car is worth less than $16,000, then it might make sense to lower insurance coverage for that car.
Improve Your Credit Score
According to NerdWallet, your credit score is a major player in determining your car insurance rates. Credit ratings are more impactful than driving records for certain car insurance companies. States such as Hawaii, Massachusetts, and California do not allow insurers to use credit as a factor in their prices.
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Take A Defensive Driving Class
In some states, discounts are available for drivers that take certain defensive driving courses. Some insurance companies provide these discounts only for teen and/or senior drivers. But taking such a class is beneficial for all drivers, even if your insurance company doesn’t offer any savings for it. Driving better, as mentioned above, and avoiding collisions and tickets do save money in the long run.
Keep An Eye On Your Credit
It doesn’t seem quite fair. In most states, insurers can use your credit history as a rating factor to set insurance premiums.
Insurance companies often refer to this as an insurance score because the rating mechanism may include other factors. However, your credit history might be costing you money on auto insuranceor it might be saving you money.
Insurance actuarial studies discovered statistical data that suggests a policyholder with poor credit is more likely to place an insurance claim compared to a policyholder with good credit. Based on this, most states allow the practice of using credit as a rating factor, although some restrict using credit as a rating factor to only auto policies.
Federal law allows you to check your credit report for free once every 12 months. Take steps to correct any inaccuracies you find on your credit report and look for ways to improve your overall credit history. The improvements you make now can affect more than just your interest rates and can save you hundreds or even thousands of dollars over time.
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Set The Right Deductible
A higher deductible reduces your premium because you pay more out of pocket if you have a claim. Hiking your deductible from $200 to $500 can cut your premium on collision by 15 to 30 percent. Go to $1,000 and you could save 40 percent. If you have a good driving record and havent had an at-fault accident in years, if ever, opting for a higher deductible on collision might be a good bet. Just make sure you can afford to pay that cost if your luck runs out.
How To Find The Policy Thats Best For You
Start by reviewing your current policy coverages to determine how much coverage you actually need. While this is time consuming, you may find some great ways to cut your current policy premium immediately, before you start shopping around.
Cast a wide net in looking for a new policy. The more agents and direct sellers you talk to and get quotes from, the more likely you are to find a better price, maybe even the absolute best price available. You can use an online price comparison tool, like the one that NerdWallet offers, to get a sense of what to expect. Keep in mind though, that the only way to get a truly accurate price quote is to speak with an insurance agent directly.
Be sure to inquire about any available discounts. Different companies will offer different discounts and calculate them in to your final premium quote.
Ask about bundling your policies as this can lead to even bigger discounts. Combine your auto insurance with your homeowners or renters insurance. Auto insurance is the riskiest insurance for companies to offer, so bundling it with a policy youre less likely to use makes it more enticing for insurance companies to offer a deep discount.
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When Is The Best Time To Get Car Insurance
It’s a good idea to get new quotes after a life event like getting married or when you hit an age milestone like age 18, 21 or 25, since those changes can lower your rates. You can switch car insurance at any time without penalties from most companies, as long as you don’t have a lapse in coverage when you switch to your new policy.
One case where you might wait to switch is if you’re expecting your rates to go up, such as if you’ve recently gotten a ticket. Insurers usually won’t see those changes until you go to renew, so it’s often best to wait until renewal and then get a few quotes to see which company is most lenient and offers the best rates.
Editorial Note: The content of this article is based on the authorâs opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
Bundle Your Policies And Save
You may have heard the term bundling when it comes to insurance. But what is bundling? Its actually one of the simplest ways you can reduce your insurance premium!
Bundling is when you buy multiple insurance products with the same provider, like your auto and home, auto and renters, or even your auto and life insurance. Bundling makes things simpler for you, since you can make one convenient payment to protect what matters most to you, and can help you lower your car insurance premium.
Want to find out more about bundling? Take a look at our insurance bundle FAQs to educate yourself on this smart move.
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Dont Drive A Lot Consider Usage
If you dont mind having your driving behavior tracked, consider usage-based or pay-per-mile insurance to lower car insurance costs. To participate, you use an app or install a small device in your car that transmits data to the insurance company.
Metromile, Allstate, Nationwide and Mile Auto all offer pay-per-mile insurance in certain states. With this coverage, you typically pay a base rate plus a per-mile rate. So if you dont drive long distances or commute daily, it could be a good option.
Several other insurers, including State Farm, Progressive, Safeco and Travelers, offer usage-based insurance programs that track behaviors like speeding and hard braking. They offer discounts or reduced rates for safe driving.
Its possible to get a discount just for signing up for some of these programs, so they might seem like a no-brainer. However, some insurers may increase your rates if youre deemed an unsafe driver. Make sure to check what behaviors are tracked and how your rate is affected before enrolling.
Bundle Auto Insurance With Home Renters Or Condo Insurance
Bundling your auto insurance with your home, renters, or condo policies is one of the quickest ways to save on insurance. Most auto policies do not cover personal belongings in your car, so youll need to purchase property belongings. Bundling auto with other insurance policies can save up to 20% off. For more information about Bundled Insurance, click on this link.
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Pay Attention On The Road
In other words, be a safe driver. This should go without saying, but in todays age of increasing in-car distractions, this bears mentioning as much as possible. The more mindful you are, the more accidents or moving violations youll be able to avoidevents that raise your insurance rates. Travelers offers safe driver discounts of between 10% and 23%, depending on your driving record.
For those unaware, points are typically assessed to a driver for moving violations, and more points can lead to higher insurance premiums .
Compare Rates From Different Insurers
Sometimes, the best way to reduce your car insurance costs is simply to switch insurers. Insurance companies usually use very similar rating factors when setting insurance premiums, but each insurer might weigh these factors differently.
For instance, if your credit history suffers a few dings, you might see an increase in premiums at renewal. However, another insurer might not weigh credit history the same way, possibly resulting in lower rates.
Insurance premiums also reflect the insurer’s costs for all policyholders. Let’s say your insurer experienced widespread claims following a major weather event like a hurricane. Chances are good that policyholders insured by that company will see higher premiums as a result. If another insurer didn’t have the same level of losses, that company’s rates may remain relatively stable.
Although it isn’t always advertised, insurers often cater to a certain market demographic. Some insurance companies might have better rates and more available discounts for young drivers, while others might be a better fit for married homeowners. It often pays to compare rates every year or two to be sure you’re not paying too much for your coverage.
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