Stop Overpaying for Car Insurance: 4 Ways Drivers Are Lowering Their Bills
Many factors affect your car insurance rate — driving record, location, credit score. But there’s another factor that your current provider may not want you to know about: Hidden discounts.
If you haven’t shopped around for a new policy in a while, you may be missing out on discounts you’d be eligible for with a different provider.
We’ve dug in and found four ways for you to save on your auto insurance:
1. Bundle Your Coverage
You probably pay for other types of insurance, right? There’s home, renters, and life insurance, to name a few. One quick way to save: Bundle multiple policies with the same provider.
Each insurer sets its own discount policies, but consumers usually save anywhere from 5% to 25% on their premiums by bundling insurance.
If you’re in the market for multiple policies, this strategy is a proven winner.
2. Unlock Hidden Discounts
Insurers typically offer multi-policy discounts upfront, but even more savings may be available on top of that. The catch is, you usually need to ask for them. Most people don’t even know that hidden discounts exist, and even fewer know exactly what discounts they should ask about.
Here’s a rundown of common possibilities:
Good driving discounts
When you purchase auto insurance, the provider runs a risk assessment to determine how likely you are to file a claim. Customers with good driving records are less risky for insurers, since they are less likely to be involved in an accident.
You may qualify for discounts based on your driving record if:
- You’ve never had a traffic violation
- You haven’t gotten a speeding ticket in a while (usually three or more years)
- You haven’t been in an at-fault accident for some time (usually three or more years)
- You don’t have a DUI/DWI conviction
Insurance companies sometimes offer discounts to people in certain professions, including:
- Law enforcement personnel and first responders
- Military members (active duty or reservist)
- Doctors and nurses
- Engineers and scientists
Providers vary significantly in their policies, so it never hurts to ask if you qualify.
Multiple vehicle discounts
You already know that you could save by bundling multiple forms of coverage through the same provider. However, you might save even more if you insure multiple vehicles on the same car insurance policy.
The amount you could save depends on a few factors, such as the types of cars and how old they are and the driving history of each person covered on the policy. If everything lines up, you could save anywhere from 10% to 25% off your coverage.
Even if you decide not to bundle your home and auto insurance together, you could still save on your car insurance if you own rather than rent your home. Most insurers ask if you’re a homeowner or renter during the application process and build any applicable discount into your quote. However, others only offer this discount to customers who ask.
“Good behavior” discounts
Some insurers consider responsible behavior even if it doesn’t seem like it relates to your driving. So, you could score additional discounts for:
- Good credit
- Graduating from a defensive driving/driver training program
- First aid training
- Good grades
Note: If you’re not in school yourself but you have a good student on your policy, you may still be able to get a discount.
You may be able to qualify for special bonuses based on other factors. Common examples include:
- Drivers aged 50 to 70
- Married drivers
- Drivers with no gaps in their car insurance coverage histories
Others may apply. The only way to know for sure is to ask!
3. Consider a Usage-Based Policy
It probably seems obvious that the more you drive, the more likely it is you’ll file an insurance claim. Usage-based policies offer a potentially money-saving opportunity. These policies are available to people who don’t drive all that much. Providers vary in their mileage cutoffs, but the best discounts kick in if you drive under the national average. For 2020, this was approximately 12,000 miles or about 32 miles per day.
If you have a short commute, walk to work, or don’t otherwise use your car very much, tell the provider when you request a quote. You could be in line for a solid discount.
4. See if You Can Beat Your Current Provider
If you’ve never factored this information into your search for auto insurance, chances are you’re paying too much. It takes as little as 2 minutes to see if another provider can beat your current rate, and the savings could put hundreds of dollars per year back in your pocket. Get your rate now!