When you buy auto insurance, you likely want to get the best deal on the coverage you need. Your initial quote might seem high, but you can often significantly reduce the cost of your policy by taking advantage of car insurance discounts.
Learn more about what car insurance discounts are and the different strategies that can help you save.
- You might qualify for discounts based on your driving history, payment method, car features, or group affiliations.
- You can typically add discounts online, through an insurer’s app, or by phone.
- Some insurers offer discounts for having multiple policies, such as car insurance and home insurance. This is often called “bundling.”
What Are Car Insurance Discounts?
Auto insurance companies typically offer a comprehensive lineup of discounts that reward policyholders for factors that lower the costs of providing them with coverage. For example, your insurer might offer you a discount if you have a clean driving record or if your car has anti-theft equipment.
By investigating the available discounts offered by your insurer—or its competitors—you may be able to save 10% to 40% on your car insurance. Here’s a closer look at how to add car insurance discounts to your policy, as well as common discounts that can help you lower your car insurance premium.
How Do I Add Car Insurance Discounts to My Policy?
Adding insurance discounts to your policy requires you to contact your auto insurance provider. Often, you can do that in several ways, including over the phone, on a computer, or using a smartphone.
Add Discounts Online
If you have an online account with your insurer, you can likely log in and manage your policy, which might include adding any discounts that apply to you. If you’re requesting a car insurance quote online, the insurer might ask you questions to figure out whether you qualify for various discounts.
Add Discounts by Phone
You can call your insurer’s customer service line to inquire about discounts. You’ll often have to verify your account by answering several questions. However, you’ll be able to talk to a person and find out more about the various discounts that might be available to you.
Add Discounts With an App
More and more insurance companies are creating mobile apps for policyholders. If your insurer provides this option, you can log into your account and may be able to manage your discounts in the app.
You can also use these methods to check for any discounts that may have already been applied to your account.
Now that you know how to add car insurance discounts, what kind might you qualify for?
Good Driver and Affiliation Discounts
Auto insurance is all about risk management for policy providers. When you can show signs that you’re a responsible driver (and person), they’ll see you as less risky—which means your premium will drop. But how can you prove you’re responsible?
Good Driver Discounts
One way is by avoiding tickets and accidents. Many insurance companies offer some form of “good driver” discount for people who don’t have certain marks on their driving record for a specific period of time. For example, State Farm offers a discount once you’ve been insured for three consecutive years without an at-fault accident or moving violation. Plus, the discount can increase over time if you stay accident-free.
Defensive Driving Course Discounts
Another way to show responsibility as a driver is by taking a defensive driving course. State-approved course providers offer driving safety classes that can help you improve your skills behind the wheel. They cover topics such as driving in inclement weather and avoiding accidents. Many insurers offer discounts to drivers who complete these courses, although eligibility typically depends on your age and state.
Many state-approved defensive driving courses are now available online, so you can complete them from the comfort of home when it fits into your schedule.
Teen Driver Discounts
When a teen starts driving, it can be a scary and expensive time as a parent. However, some companies offer discounts that can help lower the cost of insuring a teen driver. Here are a few examples:
|Insurance Company||Discount/Program||Who Qualifies||How It Works||Discount|
|AAA||SMARTtrek||All ages||An app tracks driving behavior and offers feedback||10% at signup; up to 30% at renewal|
|teenSMART||Ages 16 to 26||Teens take an online 8-hour class that teaches safe driving||Up to 24%|
|Nationwide||SmartRide||All ages||An app tracks driving behavior over 4-6 months to determine your discount||10% at signup; up to 40% at renewal|
|Allstate||Smart Student discount||Full-time students who get good grades; young adults up to age 25 who complete the teenSMART program; or students away at school at least 100 miles from where the parent’s car is parked||Contact an agent to find out what to submit to demonstrate grades or distance from home; complete online teenSMART course||Varies|
|Drivewise||All ages||The app monitors driving behaviors and rewards drivers with discounts||Up to 40%|
|State Farm||Steer Clear||Under age 25||Drivers must complete five training modules, practice driving, mentoring, and more||Varies|
|Drive Safe and Save||All ages||An app monitors and rewards good driving behaviors||Up to 30%|
|Driver training discount||Under age 21||Get a discount if all drivers under 21 on the policy complete an approved driver’s education course||Varies|
Good Student Discounts
If a driver on your policy is in high school or college, meets the insurer’s age requirements, and maintains a minimum grade point average (GPA), they may qualify for a “good student” discount.
State Farm, for example, offers up to 25% off your premium for a full-time student who is 16 to 25 years old with a 3.0 GPA or better. Students also qualify if they’re ranked in the top 20% of their class or if they have qualifying test scores as a homeschooler.
You may also be able to get discounts based on your affiliation with certain groups through membership, employment, or service. For example, insurance companies often partner with organizations such as:
- Colleges and universities
- Alumni associations
- Military branches
- Federal organizations
- Professional organizations such as unions
Ask about your insurer’s partnerships to make sure you don’t miss out on any discounts.
Another potential way to save on your car insurance is through equipment discounts. Your insurance carrier may lower your premium if your vehicle is equipped with certain features that help prevent accidents and injuries. For example, GEICO offers discounts for cars equipped with airbags, anti-lock brakes, and daytime running lights. Additionally, it offers up to 15% off if you have a new car, which GEICO defines as no more than three model years old.
Insurers will often offer you a discount if you sign up for more than one type of insurance policy or insure more than one vehicle. This is often called bundling insurance, and might also be called a multi-policy discount.
For example, State Farm offers discounts if you have a renters, condo, life, or homeowners policy along with an auto insurance policy, and up to 20% off if your household insures two or more vehicles.
You may also be able to save just by paying a certain way. For example, Allstate offers a discount for paying for your policy in full or setting up automatic withdrawals for your premium payments. Both these options help guarantee that you’ll pay for your coverage on time and in full.
ZIP Code Discounts
Where you live and regularly park your vehicle will also affect your car insurance premium. States are divided up into auto insurance rating territories, and insurers generally base the rate for each territory on the claims history of the policyholders who live there—although some states regulate this practice more strictly than others.
Overall, dense urban areas tend to have higher premiums than rural areas due to factors including crime rates, accident rates, and traffic congestion.
If your territory has a high history for claims compared to others in the state, you will likely have a higher premium. Conversely, if your area has fewer claims, on average, you may get a discount. While not everyone can move just to save on car insurance, if you’re already considering a move, it might be worth getting car insurance quotes for potential new neighborhoods to see how your rates might change.