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How low can your auto insurance premium go?
Auto insurance is required in most states. That means that insurance companies don’t have to convince you that it’s a good idea to buy some – the way they do with, say, life insurance – so much as sell you on the idea that you should be buying it from them instead of the competition.
One way they do this is with the time-tested, consumer-friendly tradition of discounts.
There are a lot of different auto insurance discounts you can get from your insurer, but most insurance companies categorize discount types into three main groups: driver discounts (discounts having to do with you), vehicle discounts (discounts having to do with your car), and policy discounts (discounts having to with other policies you have, or how you pay).
Before you buy car insurance, you can save money right off the bat by ensuring that you’re buying the right amount of car insurance. Need to know how much car insurance you need? We can help you figure out your ideal coverage amount, plus get you free car insurance quotes from America’s top insurers.
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One of the major factors in determining your car insurance rates is, well, you. There are some things, like your age, that you can’t do much about, but you can take advantage of some of your personal details to save big on your premiums.
Many car insurance companies will give discounts based on affiliations with certain groups, and this often takes the form of occupational discounts.
Active military members can often get car insurance at a reduced rate, as can many different types of federal employees. Some insurers also offer educator discounts.
Besides these broad groups, you can also look for more employer-specific discounts. GEICO, for example, has insurance discounts for employees of Berkshire Hathaway companies. You can also get discounts for being an alumnus of some schools (more on that below), fraternities and sororities, or other groups.
Think you’re not eligible for a discount? There are discounts for members of USA Water Ski, so you never know. It’s always worth looking!
The most common type of student discount is a good student discount, which is pretty self-explanatory: if a full-time student keeps his or her grades above a certain threshold, rates stay low. It’s good for their education and for their wallet, if parents are teaching them the hard lessons about money management early by making them pay for their own car insurance.
As mentioned above, there are also college alumni discounts. Many insurers also offer discounts for college students while they’re actually still in college. It’s hard (or expensive) for a lot of students to bring their cars with them when they leave for college, but they’ll still need insurance for when they come back home. For those who won’t be using their car that often, they can get car insurance at a reduced rate so they’re still protected without paying full-time premiums.
And then there are discounts for how well or often drivers drive.
Good driver discounts are based on the number of claims filed, how many times you get ticketed, and so on. If you’ve ever had a fender bender, you know that it can raise your rates by quite a bit. But if you can go three to five years -- depending on the car insurance company -- without any incidents, you might be able to see a drop in your insurance premiums.
You can also get discounts for being an educated driver. Completing a driver’s ed courses can often get you a discount, but those are most commonly associated with new drivers. If you’re still looking to lower your rates, defensive driving courses can help you achieve the same results. Talk to your insurance provider about what certifications they honor with a discount.
Finally, look for low-mileage discounts. The less you drive, the less likely you are to be in an accident, so many insurers will give you a break if your annual mileage is low enough.
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A lot of auto insurance premium discounts are used for customer retention. Insurers want to give you every reason to stay with them and they want to make it worth your money to do as much business with them as possible: they want you to insure every car you have with them, plus other property, too.
That’s why you get things like bundling, multi-car, and multi-policy discounts. Most insurers insure more than just cars; they offer many more insurance products, and they want you to buy those, too. So when you get your car insurance through a certain insurer, chances are you’ll get a discount if you also get homeowners insurance, renters insurance, or another type of insurance through them as well. And if you have multiple cars, insuring them all through the same insurance company can get you a multi-car or multi-policy discount.
We can help you get an insurance checkup to see what your insurance needs are, and if you need more coverage, getting some if it in one place can save you money.
Family plans are also common for auto insurance. If you, your spouse, and your kids are all insured with the same company, you’ll probably get a discount. Plus, having all of your plans at one company makes it easy to avoid the hassle of multiple car insurance premium payments to multiple companies at different times.
How you pay can also save you money. Some insurers will offer a discount for going paperless with your billing, or for paying your annual premium in full all at once as opposed to monthly.
Obviously you should only do that if you have the cash to spare – sometimes you don’t have a choice but to spread payments out – but if you do, it can save you in the long run.
The most obvious time to focus on customer retention is when a customer has to renew their policy, which is why most insurers offer some sort of renewal discount to keep you from switching to a different insurer.
And, of course, there are discounts to make sure you do switch to a different insurer! Transfer or switch discounts are just that: Join up with an insurer and they’ll give you a discount for ditching the competition. This makes it worth shopping around when it comes time to renew your car insurance – just in case you can find a better deal elsewhere.
There’s a lot of flexibility when it comes to your auto insurance, and which car insurance discounts you’re eligible for can play a big role in which carrier you go with and how much you’ll pay every year. It’s important to do your research to see which company can get you the best deal.
It’ll pay off in the long run.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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