Your guide to car insurance discounts
- Driver education and training discounts -- Details on refresher courses for mature drivers, defensive driving classes and alcohol awareness programs
- Young driver discounts -- Eligibility and requirements for good student, college student and family legacy discounts
- Good driving history -- Potential savings for ticket-free, accident-free and claims-free driving histories
- Low-risk driving behavior -- Low mileage and pay-as-you-drive programs such as Snapshot and Drive Wise
- Vehicle and safety-feature discounts -- Discounts for safety and anti-theft features built into your car
- Loyalty and multiple-policy discounts -- Details on renewal and bundling discounts
- Education, military and affiliation discounts -- Guidelines for discounts based on your job, military service or education
- Homeowner, marriage and credit discounts -- Savings based on low-risk demographic factors such as homeownership, marriage and good credit
How do car insurance discounts work?
- Your car insurance company first determines your base rate, using information such as your ZIP code, age, driving record and car model. Base rates differ greatly from company to company and state to state.
- The insurer then looks for information that suggests you pose less risk than is typical. You might get a discount off the base rate for those factors.
- The insurer also uses that personal information to find indicators that you pose a greater risk of a claim. If so, you may pay a surcharge on top of the base amount.
- It is possible for your premium to reflect both insurance discounts and surcharges.
Discounts depend upon state laws and an insurer’s own internal rules and guidelines. Each company will have its own eligibility criteria, and the savings will vary as well. You should be able to see what discounts you currently are receiving by reviewing the declarations page of your policy, though, it may not list only which vehicle is getting a discount and not how much the discount amount is.
Many discounts apply only to a certain type of coverage, such as collision. Also, while most insurance companies will allow you to receive multiple discounts, insurers also have established a maximum total discount they allow off your full premium, such as 25 percent.
Keep in mind that discounts don’t remove the need to comparison-shop your coverage periodically. You may find that a car insurance company offering only a few discounts gives you an overall lower price for your policy.