Did you know that you’re likely missing out on some serious car insurance discounts? That’s right, you’re probably missing out on keeping more money in your pocket.
Chances are your insurance provider might have missed some great discounts to lower your rates. Typically, providers won’t ask or give you all the discounts right off the bat in order to use them later as retention tools when your premiums go up.
Don’t get stuck in paying more than you could be. Do your research before renewal so you can take advantage right away.
Finding the cheapest auto insurance goes beyond the initial price tag. Use this guide to find the best auto insurance discounts by knowing where to look.
What’s In Your Rate?
Before diving into how to get the cheapest rates, let’s get an understanding of what goes into calculating your rate.
Your rate is made up of three things: the type of car you drive, you as the primary driver, and the area that you live in. It also factors in drivers in your household, but typically only when they are newly licensed or have tickets/accidents.
The car that you drive has its own rates generated based on the year make and model. The vehicle safety, the average spend on claims, and the statistics of crashes that are reported create a rate for insurance companies to use.
Your driving record is important when it comes to the rate generation. Companies will take into consideration your license class, how many years you’ve been driving, and if you have any tickets or accidents on record. They will do the same for any additionally listed drivers. Typically the primary driver of the vehicle will be the biggest factor in the rate.
Where you live is also a factor when it comes to auto insurance rates. Your ZIP code is also a statistic that is used to determine insurance rates as higher claims areas will increase your insurance. Additionally, the distance you drive to and from work, and the average mileage you put into your vehicle annually makes a difference as well.
Broker vs Direct Writer
Additionally, when hunting for discount car insurance, you’ll want to know about the differences between a broker and a direct writer. Insurance brokers will have access to a variety of companies at once to give you the best rate on the market. Whereas a direct writer will have access to only their internal company rates and will not be able to shop your policy around for the cheapest price.
The benefit of one over the other is the offering of a loyalty discount, that most brokers will not be able to provide because your policy is shopped every renewal. We’ll get into this more below under the types of discount available.
Types of Auto Insurance Discounts
There are quite a few auto insurance discounts on the market, you’ll need to know what exactly to ask for. Take a look at your current insurance policy documents and see if you see any of these discounts listed.
Bundling Insurances
Do you have your home and auto policies insured at two different places? You’re likely missing out on a big discount by not bundling your coverages.
Most companies will offer an incentive for having multiple lines of insurance with them. This is usually the biggest discount that’s offered by companies to try to win all of your business with them. By bundling, you’ll also save yourself the time of keeping track of different renewals and instead have your insurance be a one-stop-shop.
Ask for a quote for your company to see which will be the cheapest option for you.
Distance & How You Drive
As mentioned earlier, how and how far you drive are important factors in insurance. They also provide you a discount depending on where you fall.
Check to see if your annual average mileage is accurate to what you’re driving, and make sure to update with your provider if your work commute has changed. Especially with COVID, most people have switched to working from home but haven’t updated their policies to reflect the change. They might be missing out on a discount for it.
Those without tickets and accidents may be able to take advantage of a ‘safe drivers‘ discount that some providers offer. Keeping your record clean definitely has its perks!
Vehicle Usage
The way you use your vehicle can also give you a discount. If you’re using your vehicle as a commute car, or if it’s just a pleasure vehicle you may be looking at different rates.
There may also be a discount if you only use your vehicle seasonally versus all year round. It’s important to clarify these things with your provider so that you can take advantage of the cheapest rates.
More Than One Car?
Do you own more than one vehicle in your household? Are they insured in the same place? If not, you’re missing out on a multi-vehicle discount.
Most providers will supply a discount for households with more than one vehicle insured with them. If you live with anyone who has an auto insurance policy check where their coverage is and see about switching over for discounts.
Driver’s Training
Have you got a teen in your house who’s freshly licensed? Did they complete driver’s training? You could qualify for a discount.
Its no surprise that new drivers generate a high premium, they’re obviously high-risk drivers! But that doesn’t mean you can’t do anything about it. If your teen completed a driver’s training course it’s worth mentioning to your insurance provider. Most providers will have a discount if you can show them the certification of completion and lower your teen’s rate.
How Do You Pay? (Full Pay Discount)
Do you pay your policy premiums monthly? Check with your provider about a full pay discount!
Some providers will give an incentive to customers who pay their policies annually instead of monthly. Savings can be anywhere from 2-10% off your total premium in the long run. If your provider doesn’t, check to see who does to take advantage of the cheapest rates on the market.
Affiliation (Teacher, Military, Union, Etc)
Are you a member of a qualifying society like a teacher, nurse, military/veteran, or part of a union? Have you mentioned it to your insurance provider? Call them immediately.
Most providers will supply a discount to affiliated members. If you’re unsure if you qualify, ask your provider what types of groups receive a discount with their company. Alternatively, your affiliated group may provide you with a list of companies that they are partnered with.
Senior Driver
Are you collecting your pension and at/passed the retirement age? Does your provider know this? Chances are you’ve just found yourself another discount.
A lot of providers understand that seniors live on a fixed income through their pensions. This makes high and rising rates difficult to juggle and often times has them selling off their vehicles due to affordability. Companies will provide a discount for seniors to help with the rising costs of insurance.
If you don’t see this discount on your policy documents, but qualify for it, talk to your insurance provider whether or not they supply this discount. Sometimes providers won’t assume the discount based on the age and will need to speak with you before applying it.
Loyalty
Here’s what we mentioned earlier about the benefits between a broker and a direct writer. Most companies will incentivize staying with them long term by offering a discount depending on the years you’ve been with them.
If you’ve been with your provider for quite some time, check your policy documents for this discount. It’s even a great habit to ask them what the discount amount is off your premium and if it increases over time. This will be a good gauge for you on whether or not to stay with the company for longer.
Auto Insurance Discounts Pro
Now you should be armed with everything you need to get the best auto insurance discounts on the market. Call up your provider to do a review of your policy even if it’s not your renewal period to check on your rate.
In addition to these, make sure to ask your provider for any other discounts available that you might qualify for. Some carriers may offer their own special discounts that might not be industry standard so it’s best to check in with them.
Be sure to check out our other content for more helpful tips and tricks for car owners.
