Whether you love your ride or just the places it takes you, cars are expensive, and they need to be protected. But your car insurance doesn’t need to cost a trunkload, you’ve got countless fuel-ups and tune-ups to worry about.
Thankfully, the discounts you need are out there. Heck, you may already be getting them—but wouldn’t you love more?
Everything from your job to your kid’s rock-star grades could qualify you for big savings on your premiums. And our independent insurance agents can help you find the deeper discounts you may have never thought about so you can spend less on your bills and more on the good things in life.
But first, let’s chat about car insurance discounts. Buckle up.
What Are Car Insurance Discounts?
When you insure your car, you're signing up to pay premiums (usually monthly or quarterly payments) in exchange for coverage. If you get into an accident or your car’s damaged, your insurance company promises to pay as long as certain conditions are met.
Simply put, car insurance discounts are a nice little way to lower those premiums of yours. But most insurance discounts don’t work quite like those coupons you love.
They’re more like a giant secret formula that the insurance company uses to calculate how likely you are to get into an accident. The more positive factors you add to the algorithm (which means the less likely an accident is), the less you’ll pay.
Things that might go into the secret formula include your age, gender, location, marital status, credit score, and driving record. Two things that never go into the formula, however, are your race and religion, since those characteristics are protected by law when it comes to insurance.
Insurance discounts also vary widely from state to state. This is because of differing state laws, population densities, climate, and natural disaster risks.
Densely populated coastal states like Florida and Louisiana have higher insurance premiums than rural, high-and-dry ones like Idaho and Vermont. Some states mandate more comprehensive insurance coverage than others, which drives up costs.
Another factor in car insurance discounts is the size of your deductible. A deductible is the amount of money in damage that you agree to pay (usually a few hundred to a few thousand dollars) before your insurance coverage kicks in.
The higher your deductible is, the lower your premiums will be, since the insurance company is on the hook for less money and they pass those savings on to you.
You’ll know if you’re getting a military or veterans’ discount, but you might not realize you’re getting a marriage discount, too. It’s all part of the special formula.
Insurance companies (also called carriers) don't like to share their exact formulas with customers. It's key to their bottom line, so they consider it proprietary information. Luckily, we've got insider knowledge. Here's what carriers are really thinking when they offer you savings on your car insurance.
What Car Insurance Discounts Are Available?
4 Major Types of Discounts
There are nearly as many car insurance discounts available as there are runaway french fries under your driver’s seat—lots. And they can all be divided into five major types:
- Safety discounts: These are discounts you can get if the carrier decides that certain actions of yours make you less likely to get in an accident. Good driver discounts fall into this category, as do weirder discounts like marriage, good credit, and good student discounts.
- Bundling discounts: These are discounts you can get if you buy multiple types of insurance through the same carrier. Say you need to insure your home and your car. If you get both with the same company, they’ll probably cut you a deal. Ditto if you insure multiple cars on the same policy.
- Group discounts: These are discounts you can get if you belong to a certain association or profession. Commonly offered group discounts include those for military members, teachers, and government employees. Other niche discounts include those for farmers, clergy, and even dentists.
- Loyalty discounts: These are self-explanatory — they reward customers who stay with the same insurance company for a long time. You might also get discounts for referring friends and family to your carrier.
That's the big picture, but more specifically, you’ll be looking for discounts like these:
- Good driver: This is a simple one. If you have a squeaky-clean driving record, your insurance will be cheaper.
- GPS device: Some carriers may offer to install a GPS device in your car to get a closer look at your habits. Stickler for speed limits? Hate night driving? Those habits can save you money when tracked by a GPS.
- Safety classes: Similar to GPS tracking, some carriers offer safety classes for drivers. Pass the class and they'll slash your premiums.
- New car/safety features: A new car means up-to-the-minute safety measures, like help with parallel parking and rearview cameras. Carriers will reward you. (So go ahead and splurge. You're saving!)
- Good student: Teen driver at the wheel? If they get good grades, some insurance companies translate that to sweet savings on insurance. (College drivers on your plan, or their own, may also qualify for good student discounts.) If a student is a conscientious wunderkind in one area of your life, they're likely to be one behind the wheel, too. Go figure.
- Good credit: Like the good student discount, but for adults. If you've got a good track record of paying your bills, carriers see you as a safer bet and offer you a better rate.
- Marriage: Married drivers are safer drivers, statistically speaking. That's why it's worth giving your insurance agent a call when you're home from the honeymoon: You're likely to qualify for savings.
- Gender: On average, women pay less for car insurance than men do, since they generally get into fewer accidents. You don't have control over this one, but it is a discount!
- Location: Insurance companies hate rush hour as much as you do. If you live in an area with light traffic (or zero, if you're in the boonies), you can get a better rate. Ditto for low crime areas. Your location also matters because available discounts can vary widely between states.
- Age: With great age comes great wisdom. (Usually.) The older you get, the better your driving tends to be. Carriers will reward you, especially with the big drop that comes at age 25.
- Bundling: Carriers want your business, so they'll give you a discount on your car insurance if you add a home, renters, motorcycle, or similar insurance policy with them. This is probably the easiest and most transparent insurance discount to get.
- Multiple cars: This is a sub-type of bundling discounts, and it's exactly what it sounds like. Insure multiple cars with one carrier and you'll get a discount.
- Military and veterans: Current service members and veterans receive insurance discounts almost across the board. If you're in this category, or you're the spouse or child of a service member or veteran, this should be one of the first things you tell your agent.
- Teachers: Carriers may offer teacher discounts to recognize their valuable work. You should always let your insurance agent know what you do for a living (so they can look out for other discounts), but it's extra-important if you're a teacher, since this is such a common discount. This discount may be offered through your union, so be sure to ask there.
- Union or professional association: Professional organizations often cut insurance discount deals for their members. Ask your rep or local leadership for details.
- Social, religious, and retirement organization: Just like professional organizations, social organizations cut insurance discount deals, too. Everyone from banks to advocacy groups like AARP offers discounts. Check websites and ask around the groups where you're a member.
- Loyalty: Love your insurance carrier? There are big benefits to sticking around. Loyalty discounts kick in after a certain number of years with a carrier.
- Referral: Love your insurance company, part two? Don't be shy about recommending them to friends and family. You might get a nice kickback discount.
Bonus round: high deductible discounts. If you agree to pay a higher deductible in case of an accident, your premiums will be lower. The insurance company will owe less in case of an accident, so they pass those savings on to you.
Choosing a high deductible makes sense if you have enough savings on hand to cover minor car repairs on your own.
How Hard Is It to Get Car Insurance Discounts?
The short answer: not very. Even with a spotty driving record, there will probably be some discounts you qualify for. If you have a good record, there will be even more.
The longer answer is that the hardest part of getting car insurance discounts is understanding when you're getting the discount. Some carriers will advertise their discount programs, while others just quietly factor savings into the final deal.
There are hundreds of insurance carriers in the United States. Each has a different focus and formula, which means that each offers slightly different discounts.
Famous carriers like GEICO and Progressive put tons of money into advertising catchy discount programs, but that doesn't mean you're getting the best deal.
You may be getting the one big advertised discount, but you could be getting overcharged on everything else, because one-size-fits-all companies have less time to design coverage just for you.
The more tailored-to-you your insurance is, the more discounted it will be, even if you're not getting any flashy coupon-style deals.
If you're having trouble getting car insurance discounts, make sure your agent knows as much about you and your driving habits as possible. That way they can plug that information into the insurance formula, finding you more savings.
If you have a history of accidents, tickets or impaired driving, it helps to shoot for the bundling and group discounts first. Try to stay with a carrier as long as possible to net those sweet loyalty discounts. In the meantime, keep your nose clean and those good driver discounts might not be so elusive, after all.
How Do I Get Car Insurance Discounts?
First, remember that you're probably already getting discounts based on stuff you don't have a lot of control over: your gender, marital status, location, and age. They might not be spelled out as discounts, but they're still saving you money.
The next step is to do a little bargain hunting, both with an insurance agent and with your social network. Be sure to ask any major organization you're a part of if they offer discounts.
That includes your union or other professional organization, bank, advocacy groups like AARP, and your place of worship, if you have one.
Remember, carriers can't take your religion into account, but your place of worship may organize discounts for its members, or encourage you to work with a certain company. For example, Thrivent Financial offers financial and insurance services primarily to Lutherans.
Working with an independent insurance agent is another great way to get discounts. Since they aren't bound to one company's super-secret insurance formula, they can comparison shop between carriers and help you find the best deal.
If you're shopping for a car, you can start working with an independent agent to compare costs before you even sign the papers. Here's what goes into calculating insurance for a new (or new-to-you) car:
- Value: The cheaper the car, the cheaper the premiums.
- Safety: New features like rear cameras, pedestrian detection, and emergency braking can lower premiums.
- Cost of repairs: If a car costs a lot to repair, it'll up your premiums (because your carrier wants to break even).
- Attractiveness to thieves: If your car's at risk of being stolen, it'll also up your premiums (same deal as above: your carrier needs to cover their costs).
- Engine size/power: The more powerful your car, the worse an accident might be, so a large engine ups your premiums.
It's a popular myth, but a car's paint color actually doesn't affect your insurance costs. Drab colors aren't cheaper to insure and bright ones aren't more expensive. You can splurge on that cherry-red convertible in peace.
After factoring in group discounts and the make and model of your car, your agent will start running the numbers. You'll probably start by filling out a questionnaire, and your agent will ask you questions to fill in any gaps.
Don't be shy about speaking up if you think they're missing something. A good agent wants to know as much about you as possible so they can find you the best deals.
Here are the basics of what an insurance agent needs to know about you so they can get you the most car insurance savings:
- Your job, retirement status and/or any US military affiliation
- Marital status
- The size of your family (and who else might be driving your car)
- Driving habits (where, how often and how many miles you typically drive)
- The make and model of your car and any safety features it offers
- Whether you're open to bundling additional insurance (homeowners, business, multiple cars, etc.)
- Credit score
- If there's a student on your plan: their SAT/ACT test scores (high school students) and GPA (both high school and college students)
- What size deductible you're willing to accept (higher deductibles mean less coverage but lower premiums)
Getting discounts on your car insurance doesn't have to stop when you pick a plan. Keeping your agent updated on major life events — like marriage or a job change — can help you qualify for discounts you missed the first time around.
The Benefits of an Independent Insurance Agent
Well, now you know how discounts work. But we all know how valuable your time is, so why do the hard work yourself? Our independent insurance agents stay on top of the industry and all the latest discounts so you don’t have to. That means they’ll help find the right coverage at the right price for you.
They’re not just there in the beginning, either. If you get in a jam and need to make a claim, they’ll help you meet deadlines and ensure you’re getting all the benefits you’re entitled to.
TrustedChoice.com Article | Reviewed by Paul Martin
©2020, Consumer Agent Portal, LLC. All rights reserved.