Do You Know About These Auto Insurance Discounts?

by Mark Heidelberger

Do any of these auto insurance discounts apply to you? If you don’t know, you should. They might be able to help you save quite a bit of money.

As of May 2022, the US Department of Transportation Federal Highway Administration reported that Americans were driving an average of 13,476 miles annually. The need for insurance grows with each passing year. And it’s not getting any cheaper. One obvious way to keep costs low is to price shop. Seek out quotes from various insurance providers and choose the one that best fits your budget.

According to State Farm agent Paul Cashman, a 30-year veteran of the industry, general quotes are typically based on the driver’s age, zip code, type of car, and driving record. However, purchasing insurance based on these factors alone without considering the various discounts each insurer offers means you could be leaving money on the table.

Multiple Lines

Bundle your auto insurance with other products the insurer offers, such as homeowners, renters, life, or umbrella insurance. Some companies even offer discounts for buying non-insurance products like Roth IRAs.

In the case of, say, renters insurance, the discount on the auto portion could be twice the cost of the renters policy, meaning you pay less in total for having both than for only having auto insurance. Cashman notes that bundling auto, renters, and umbrella policies can sometimes save you up to 20% on the auto, 20% on the renters, and as much as 50% on the umbrella.

Low Mileage

Premiums are calculated partly on how many miles you drive annually, so living close to your place of employment or even retiring could reduce your premiums. A 1993 study by the University of Michigan’s Transportation Research Institute noted that drivers 75 years of age and older were in fewer accidents than many younger groups because retired folks drive far fewer miles. Some insurers will reduce premiums for anyone driving less than 7,500 miles per year with discounts reaching as high as 50%.

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Loyalty

Cashman admits that the loyalty discount could be one of the most significant on your policy. At some insurers, discounts increase every year you’re a client, maxing out at a specified number of years that will vary by insurer. Some will maintain your loyalty discount if you leave and come back within a year. This allows you to try out other insurers risk-free to see if you’re truly getting the best price. In addition, loyalty discounts occur independently of your age, driving record, annual mileage, and other factors.

Vehicle Safety

New technological innovations like 360-degree camera systems, automatic braking, and blind-spot warning systems have all been instrumental in reducing the number of accidents. Purchasing a newer car with more safety features and a higher overall safety rating can result in a premium up to 40% lower. Cashman suggests contacting your agent for premium estimates on new cars you’re considering to see which one gives you the best premium before you buy.

Defensive Driver

Online courses designed to teach defensive driving skills are offered by groups like the National Safety Council, and many insurers will reward you for taking them by discounting your premium. Certain states even make these discounts mandatory. Requirements will vary from state to state.

Good Student

Most insurers offer discounts to full-time high school and college students for maintaining at least a B average, making the dean’s list, or ranking in the top 20% of their class. Some insurers may discount up to 25%. Age restrictions may apply, and State Farm defines “full time” as 12 or more units, according to Cashman. The idea, though, behind the discount is that responsible students are also typically responsible drivers.

Occupations

According to DMV.org, drivers who are employed in what insurers consider “low-risk professions” can sometimes be eligible for a reduction in premiums. Examples include scientists, teachers, nurses, pilots, engineers, first responders, and certified public accountants. Statistics have shown that people engaged in these professions are involved in far fewer accidents than the national average. Ultimately, your insurer will decide which occupations qualify and for how much.

Reviewed October 2022

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