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3 Types of Car Insurance Discounts

The 3 Main Types of Car Insurance Discounts

Available car insurance discounts vary widely from insurance company to insurance company. It can get overwhelming trying to discover all the discounts that are offered, and the ones you might be able to apply to your car insurance premium.

Essentially, there are 3 categories of insurance discounts, and most discounts fall into those main categories. We'll explain these below, so you can be better informed as you receive your car insurance quotes.

Driver Discounts

Most auto insurance companies offer several types of discounts to drivers based on driving history, student status, professional organizations, age, and how and when they use their cars.

Common driver discounts include the following:

  • Good driver/claim-free – Drivers with a safe driving history free of accident claims will have a great chance of obtaining discounted rates (3 consecutive years).
  • Good student – Many car insurance companies offer discounts for:
    • Being a good student (typically, this means having a B average or higher).
    • Recently graduating.
  • Auto club – Some car insurance providers give reduced rates to drivers who get roadside assistance from an auto club like AAA.
  • Professional organization – Being a member of certain professional groups may save you money on car insurance.
  • Low-risk occupation – Many car insurance companies offer savings for certain professions that have lower rates of accidents and claims by drivers in those jobs.
  • Driver training – You may be able to lower your premium by completing a(n):
    • Accredited driver's education course for new drivers.
    • Defensive driving course.
      • This option is generally offered to senior drivers.
  • Low-mileage – Many companies will offer a significant discount for drivers whose mileage falls under a certain cap.

Vehicle Discounts

Your vehicle can have a big impact on the cost of your car insurance. Auto insurance companies may reward you for having features that reduce their risk by offering you a break in your premium. Vehicle features that reduce risk include:

  • Safety equipment – Having certain devices installed in your vehicle can earn you savings. Some of the more common discounts are for:
    • Passive restraint – This refers to automatic seatbelts that fasten without you having to do anything.
    • Anti-lock brakes.
    • Airbags.
    • Anti-theft protection device.
  • Alternative fuel – Having a car that takes alternative fuel may get you some savings, based on your insurance company.
  • Hybrid vehicle.
  • New car.

Policy Discounts

Certain factors that don't directly affect you as a driver, or the risk factor of your car, can still affect the premium of your policy. These considerations typically make writing your policy easier, giving car insurance companies an incentive to offer you discounts. Policy discounts include:

  • Multi-vehicle – You can save money by insuring multiple vehicles on one policy.
  • Full payment – If you pay your entire premium up front, you may get a discount for doing so.
  • Renewal/customer loyalty – Insurance companies like loyalty. Continuing to renew year after year can save you money.
  • Bundling – You can often get a reduced car insurance premium by combining multiple policies, like homeowner's and car insurance.
  • Homeowner's – You can often get a discount for owning a qualified home.

Discounts will vary widely among insurance companies, and the terms of these discounts will vary as well. Remember to do careful comparison-shopping when purchasing car insurance, and ask about any discounts that might apply to you.

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