Best Auto Insurance Discounts

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Best Auto Insurance Discounts

When people think about buying insurance, they might not always think of promotions or discounts. This is because insurance is not a tangible good. Others just don’t know what discounts are available to them. The good news is there are plenty of ways to save money on car insurance, many of which you may have never thought of before. It’s in your best interest to shop around for the best auto insurance discounts and get cheaper coverage. Enter your zip code to compare rates, plans, and discounts in minutes.   

Why Do Insurance Companies Offer Discounts?

Like any other business, insurance is highly competitive. It is in the best interest of the insurance companies to offer discounts to the best drivers. They are the ones who provide a minimal risk that a huge payout or claim will ever be made. The insurance company will reward people who have few or no vehicular accidents and file fewer claims through cheaper rates. 

Many things go into determining the amount of the discount. These factors include the driver’s age; the distance traveled to and from work, and the number of young people on your policy. There are also discounts you can qualify for, like “good student” and a discount for completing a certified defensive driver class. The savings can add up to hundreds per year. 

Some states require discounts to be given by insurance companies to drivers who meet specific criteria. The most common of these would include taking a defensive driving course. Another one is driving for some years without a significant accident. It is also essential to better understand how insurance companies calculate their premiums, including the various risk factors they consider.

best auto insurance discounts

How Insurance Companies Calculate Monthly Premiums

First, an insurance company will typically issue you a base rate based upon your various risk factors. The criteria include things like a driver’s age, the vehicle being insured, and the length of time that you have been driving. 

Surcharges can then be added to the base rate. It depends on whether you have tickets or fines on your driving record and how many accidents you have been in. The number of claims that you have filed in the past will also play into your surcharged rates. These are just a few of the factors that can lead to additional charges added to your base rate.

At the same time, insurance companies can also offer discounts. This option will cause your base rate to decrease based on a variety of factors. Perhaps you have attended and passed a defensive driving course. You could also have several safety features in your car that decrease your overall risk of being seriously injured in a crash. If you are a great driver, discounted premiums will almost certainly come your way. If you park your vehicle in a garage at night, you can also qualify for a small discount with many insurers. 

So, your premium base rate will decrease if you pose a minimal risk to the insurer. To summarize, your final premium will be calculated as your base rate plus any applicable surcharges and minus and available discounts. Start comparing rates in minutes. Enter your zip code and compare up to 10 quotes in minutes.  

Available Auto Insurance Discounts 

As you can imagine, there are some different discounts on car insurance that might be available to you depending on your situation. These include the following:

Bundling Discount 

Car insurance is not the only coverage that you will typically need. If you agree to use the same insurance provider for all of your policies, you can bundle everything with one insurer. If you have two or more vehicles, you can bundle them under one policy and often save 10% or more. Also, if you own a home, you can bundle your homeowner’s policy together with your automobile for further savings.  

You will often be given a discount on the premium when you choose to bundle your policy with the same provider. It will end up costing you noticeably less money than if you were to purchase each policy separately from different providers.

Club Membership Discount

It can pay to belong to a club or association. These include auto clubs and credit unions. They often work out various auto insurance discounts with specific insurance providers if you agree to use them. This option is a good incentive for the insurance provider because they will be promoted exclusively by the club or organization. In turn, it’s more likely that members will choose them for their auto insurance needs. 

AAA is one such club that has been around for decades and has a membership in the millions. They will provide a specific percentage discount off the premium and pass those savings onto their members.  

Defensive Driving Discount

Take a defensive driving course, and many insurers will provide you with a discount upon completion. The reason is that you are perceived to carry far less risk due to the knowledge you have obtained from the class. The deduction can be as much as ten percent off your monthly premium, which means you could easily save $100 or more per year by taking the class. You will also learn a lot, and it might just one day save your life.  

Equipment Auto Insurance Discount

Not all cars are created the same, and this goes for safety features. If the vehicle that you drive comes with certain approved safety features, the insurance company will give you a rate break in many cases. It does depend on the type of equipment, but you can also install these items after you have purchased the vehicle. 

The insurance agent may ask to visually confirm that the safety equipment is present in your car, but it is worth it to get the discount and be safer at the same time. One example could be a rollover bar in a Jeep or surround airbags in a mini-van. The safer your vehicle is, in general, the lower your premiums will be.  

Good Student Discount

Young people who earn good grades in high school and college are seen to be at a lower risk when it comes to pricing policies. Encourage your children to get good grades, as this case results in a savings of up to twenty percent in some cases. Many insurers offer auto insurance discounts of 5% or more for young drivers who maintain a B or higher GPA ( grade point average). 

Good Driver Discount

This discount comes about from demonstrating a consistently clean driving record. You would think that every carrier offers this discount, but strangely, not all of them do. You will want to shop around and make sure you find a company that does. This could save you up to twenty percent off your base premium. Coupled with this discount are often other factors, such as where you tend to park your car and the distance you drive to and from work. Each deduction is worth pursuing, as you want to get the lowest rate possible.

Low-Mileage Discount

If you can demonstrate that you do not drive that much, you can become eligible for a low mileage discount. The rationale here is that you are at less risk of an accident if you do not drive that much. Motorists who drive less than 1,000 miles per month are usually considered low-mileage drivers. 

The amount of miles you drive each month is something you want to evaluate each time your premium comes up for renewal. For example, if you have changed jobs and your commute has been reduced a lot, you might find that you now qualify for lower rates. This is because you are much closer to home than when you first bought the policy and are less likely to get into a wreck. A low-mileage discount can be as much as ten to fifteen percent, so make sure you take advantage of it if you don’t drive much. There are also new insurers like Metromile and Root that offer policies based on the miles driven. To compare rates, enter your zip code.   

Military Discount

Members of the military often qualify for a discount on their auto insurance, so make sure to shop around see what carriers offer this. You can check out Goodtogoinsurance for specific insurers who give discounted rates to active military and veterans. Most insurers extend the savings to immediate family members as well. Some companies will also offer it to military retirees, so make sure to check on that as well.

Multiple Car Discount

If you agree to insure more than one of your vehicles with a company, you may be offered multiple car discounts. Two cars, for example, might be insured for less than the cost of one based on several factors. Ask about this deduction if you are going to insure more than one vehicle at a time.

Payment Method Discount

How you pay can often determine the amount of your discount on car insurance as well. You might save some money if you agree to make automated payments, right from your checking account or credit card. Ask for any applicable discounts and then see if it fits within your budget and how you typically pay your bills.

Potential Savings With Auto Insurance Discounts

The discounts represented here act cumulatively. The more you qualify for, the more you can save off your car insurance premium. Bundling and multi-car savings can knock off a significant portion of your overall cost. Others might only save you a percent or so, but every little bit counts. Also, keep in mind that not all discounts will apply to your entire insurance bill, as some might only apply to one part of your coverage, such as personal medical. 

Since this is a small portion of your entire car insurance policy, you might not notice much of a saving there. Many companies will often limit the amount of total discounted items that you can apply to one policy. This cap is usually set at around twenty-five percent. Your location often determines how much you can save, as some discounts vary in certain parts of the country.

Advice on Getting the Best Auto Insurance Discounts

By now, you should be able to see that discounts can add up to significant savings. The trick is qualifying for them so that it does not cost you money but instead saves you a lot. You don’t want to buy a more expensive car with the latest GPS alarm system just to save a few bucks off your insurance. However, you would like to take that defensive driving course, as it would be money well spent. Consider the following five pieces of advice that will help you get the cheapest policy possible.

1. Understand available auto insurance discounts

One recent survey estimates that only twenty percent of drivers today are taking advantage of available discounts on their car insurance. Remember that the insurance companies will not necessarily volunteer this information to you, as they want to get as much money out of you as they can. Instead, you want to be informed and ask about every discount that you qualify for. You can take this list with you the next time you meet with your insurance agent. You can also apply for discounts at sites like good to go insurance online, which is a lot faster. Ask about them one by one and see how much savings you can get. You might be amazed.

2. Do comparison shopping each year

Just because you have been with an insurance company for years does not mean they will reward you because of your loyalty. On the contrary, they may not even be offering you any rate discounts. Do not be shy here. Call around and ask about other companies’ discounts and see how they compare to your current policy. You could be shocked by the disparity regarding what is offered to you. Do this rate comparison test every year if you want to maximize your savings.

3. Do not become fixated on discounts

Discounts are great, but not if you have to go out of your way to qualify for them. It’s especially true if you’ll need to spend money just to qualify. Safety equipment, for example, can be expensive. The amount saved might not outweigh the cost of the equipment in the first place. Do not buy a second vehicle just to get a multi-vehicle discount. You get the idea. Look for concessions that are readily available to you. Never become so fixated on them that you lose sight of the big picture.

4. Pay upfront and save

Many people pay monthly for their car insurance because it fits better into their budget that way. When you do that, insurance companies tend to charge a bit more. This is because they must manage your account to make sure that you are consistently paid up. This is why many insurers will offer a nice discount, often as much as 3 percent, if you pay the entire premium upfront. If you can’t pay a year upfront, consider automatic payments and paperless billing, as this could result in a 1-2 percent discount.

5. Purchase only what you need

Take a close look at what your insurance company is offering you. Pay only for what you need. Remember, there will likely be some parts of your insurance coverage that you are required by laws in your state to maintain. Beyond that, the choice is up to you.

This guide detailing insurance discounts is designed to help you save money on your coverage. Remember to look for the best auto insurance discounts that you qualify for, so you can save the most. 

A fast and easy way to get your premiums reduced is by comparing Good to Go Insurance rates online. Enter your zip code and shop for the lowest rates in about five minutes. Get insured for less and save more on the coverage you need.