Car Insurance Discounts to Help You Save Big on Premiums

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Owning and driving a car can be expensive. Between fuel, registration, maintenance, and insurance, your monthly costs start adding up

While you can’t control all of your costs, a big one that you do have control over is your insurance policy. 

The easiest way to save money on car insurance is to shop around and compare quotes at least once or twice per year. 

By simply switching providers (or telling your current provider you’ve been offered a cheaper policy), you can lower your premiums. 

Another great – but lesser known – way to save money on car insurance is by qualifying for insurance discounts. 

Which of the following might qualify you for a premium discount on your auto insurance policy?

  1. Working in a certain industry.
  2. Having specific equipment on your vehicle. 
  3. Taking a defensive driving course.
  4. Reaching a certain age.
  5. Having a certain GPA.
  6. Paying your premiums in full. 
  7. Renewing your policy early. 

What do you think? Which of the above can qualify you for an insurance discount?

If you chose any of them, you’d be correct. If you chose all of them, you’d be even more correct!

That’s right, there are all kinds of hidden insurance discounts that you may not even know you qualify for.  

Here’s the best part – you can qualify for and apply these discounts at pretty much any time

Be sure to ask about the discounts you think you qualify for:

  • If you’re shopping for a new policy and getting quotes.
  • When you’re getting ready to renew your policy. 
  • Even if your policy isn’t up for renewal.

Not all insurance providers advertise these types of discounts very clearly, sometimes you’ll need to do some digging and ask your company to apply them to your policy. 

Keep reading to learn more. 

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Types of Car Insurance Discounts

There are a variety of different categories of car insurance discounts, the major ones include:

  • Characteristics, demographics, and personality discounts.
  • Customer loyalty and policy-related discounts. 
  • Driver history discounts.
  • Driver’s training, driver’s education, and defensive driving discounts.
  • Discounts for vehicle equipment and vehicle types.
  • Group and affiliation discounts.
  • Payment, policy renewal, and quote-related discounts.
  • State mandated insurance discounts.

Discounts for Characteristics, Demographics, and Personality Traits

This is one of the broader categories of insurance discounts that you may qualify for at different times in your life. 

These include things like buying a house, getting married, having good grades, going away to college, or reaching a certain age. 

Demographic and characteristics-based insurance discounts typically range from about 1% to 35%.

Some examples of these types of discounts include:

Customer-Loyalty and Policy-related Discounts

Customer loyalty discounts are often offered by insurance companies when you stay with them.

Some loyalty discounts kick-in after an accident occurs that would otherwise raise your premiums. These are often referred to as accident forgiveness programs.  

Other policy related discounts include bundling multiple products with a single insurance company or adding multiple vehicles to your policy. 

On average, customer loyalty and policy discounts can save you about 2% to 25%.

Some examples of these types of discounts include:

Driver History & Driving Habits Discounts

Driving history discounts are related to your driving habits. 

Some insurance companies offer devices that can be installed to track your driving habits in real time. These are often referred to as usage-based insurance discounts. 

Alternatively, if you’ve been accident-free for a number of years or having received any traffic tickets, you may also qualify for discounts.

These types of insurance discounts typically range from about 2% to 30%.

Some examples of these types of discounts include:

Discounts for Driver’s Safety Course and Driver’s Training

Many insurance companies will offer discounts for completing driver’s safety courses.

The common ones include driver’s training for new drivers and a senior driving safety class for elderly drivers. 

However, completing a voluntary defensive driving course may also earn you a discount regardless of your age.

Discounts for driver’s training courses and defensive driving typically fall within the 2% to 15% range on average.

Some examples of these types of discounts include:

Vehicle-Type & Vehicle Equipment Discounts

Many insurance companies will offer discounts based on the type of car you drive and the type of equipment installed on it. 

For example, equipment designed to make the vehicle safer like anti-lock brakes or airbags, can earn an equipment discount.

Other types of discounts may apply if you drive electric or hybrid vehicles.

Car and equipment discounts often range between 2% and 35% or so. These often apply to only certain parts of your policy.

Some examples of these types of discounts include:

Group Membership, Affiliation, and Employment Discounts

One of the biggest types of insurance discounts that many companies offer is for affiliations with certain groups or being employed in certain industries. 

You can qualify for affiliation discounts for working for certain companies, having a certain job, having a membership in an organization, or being an alumni of certain universities.  

The discounts are often available either due to the fact that certain professions tend to be associated with less risky drivers or the group has partnered with a specific insurance company.

Affiliation based discounts typically range between 2% to 15% or 25%.

Some examples of these types of discounts include:

Policy Payment and Quote-related Discounts

Payment and quote related discounts are related to how you get your quotes and pay for your policy. 

These can include things like going totally electronic, finishing your quote over the phone, setting up auto-pay, or paying your entire premium up front.

Discounts like these can either save you a flat rate or up to 10% depending on the specifics. 

Some examples of these types of discounts include:

State Mandated Insurance Discounts

State mandated insurance discounts are ones that you won’t have to hunt for. Since these are required by state law, they should be automatically applied to your policy.

These types of discounts are ones that certain states will require insurance providers to offer to their customers. 

A common one includes discounts for senior drivers over 65 years old. 

Others include:

  • Senior drivers.
  • Defensive driving courses.
  • Clean driving history.

How Car Insurance Discounts Work

Standard car insurance policies calculate your policy base premiums on factors like:

  • Your demographics.
  • What kind of car you drive.
  • Where you live. 
  • What you use the vehicle for. 
  • Where you park your car. 

All of these factors add up to determine how risky it will be to provide you with an insurance policy. 

Discounts are then used to reduce your risk factors and reduce the costs of your premiums. 

Some categories of car insurance discounts are additional ways that insurance providers can classify you as a less risky driver. In other words, if you meet the qualifications of a certain discount, it means that you possess the characteristics of drivers that are less likely to be involved in an accident. 

Other types of discounts are designed to award good driving behavior, or a proven track record that you are someone who doesn’t get in crashes. 

And there’s other discounts that relate to how you do business with an insurance company. These include things like being a long-term customer, going paperless, or renewing early. Discounts like these are to the benefit of the insurance company to either save money on doing business with you or reducing customer churn.

Sometimes discounts will apply to your entire premium, while other discounts may only apply to a certain type of coverage, like personal liability or comprehensive coverage. 

Things to Remember about Car Insurance Discounts

Keep the following in mind when you’re looking for car insurance discounts:

  • Not all insurance companies offer the same discounts. 
  • You might have to call your insurance agent to get the discount applied to your policy.
  • Discounts can be capped or limited to a certain amount. 
  • Some discounts only apply to certain parts of your premium, not the entire bill.
  • Sometimes, you can save more money by switching providers than by hunting for discounts. 

How Much Can You Save on Your Premiums by Applying Discounts?

How much money you can save by applying insurance discounts to your policy depends on:

  • The state you live in. 
  • The type of policy you have.
  • Your insurance provider. 
  • How many discounts you have already applied to your policy.

In general, insurance discounts can range anywhere from 1-2% up to 25% (or more in some cases).

Different states and different insurance providers may have certain mandates on how insurance discounts can be applied. 

In some cases, the insurance company may cap the amount of total discounts that can be applied to your policy. Unfortunately, you’re not going to be able to add up all the discounts to get a free car insurance policy. 

To qualify for the biggest savings, you’ll need to do some research into which discounts will be most beneficial to you and get quotes from different insurance providers to see who will offer the most savings. 

How Do I Get a Car Insurance Discount?

Some insurance discounts are easy to apply or even automatically applied when you complete a quote online and set up a new policy. 

Other discounts may require a little bit more work to apply to your policy. 

Sometimes you’ll need to contact the insurance provider to ask them to apply certain discounts to your policy. This is simply because they may not be aware that you qualify or didn’t ask about it during the quote and policy signing process. 

A quick phone call or chat with customer service can potentially uncover some major savings

The first step to getting a discount on your car insurance is to meet the qualification criteria. Some are easier than others. Certain discounts, like completing a defensive driving course or having good grades, may require you to submit some paperwork to your insurance company. 

Another great way to not only find new discounts, but to also save money on your entire policy is to shop around regularly for car insurance quotes. 

Getting a quote is fast and free, and is an easy way to save money every year. 

While many insurance companies offer loyalty discounts, you may be able to save more money by switching providers. 

It’s recommended that you compare quotes at least once a year – usually before it’s time to renew your policy. 

What are you waiting for? Don’t leave money on the table! Start comparing quotes today for free.