Understanding the power of car insurance discounts and which you can qualify for is one of the top ways to save on your insurance policy. When it comes to discounts, knowledge is power – you can’t get a discount you don’t know about. The best way to ensure you are getting all the discounts you are eligible for is to ask your insurer.
If you’re shopping for a new policy, be sure to ask potential insurers which discounts they provide, and to which coverages they apply. That way, you can find the company with the most discounts for you.
“An insurer looking to save their clients as much money as possible should offer discounts as much as possible. People can save a pretty penny if they have clean driving records. Not only will an insurance company offer five-year accident-free and safe driving discounts, but at renewal, if an individual’s driving record stays in the clear, there could be room for even more savings,” says Katie Sopko, an insurance broker at Learnandserve.org powered by A Plus Insurance.
“On average, one could save anywhere from $200-$400 per six-month term.”
- You could save anywhere from $200-400 every six-month policy term with car insurance discounts.
- Discounts include driver profile discounts, vehicle discounts and policy discounts.
- Many discounts only apply to specific coverage types, so the price break is applied to what you pay for that portion of coverage and doesn’t come off the entire bill.
- What are the types of car insurance discounts, and how much can you save?
- How do car insurance discounts work?
- Which companies offer the most auto insurance discounts?
- What are the best car insurance discounts?
- How long do I have to be with my insurance company to get a discount?
- What are other ways to lower your car insurance rates?
- Car Insurance Discounts by State in 2022
What are the types of car insurance discounts, and how much can you save?
The types of discounts fall into three basic categories:
- Driver profile discounts: Discounts having to do with you and your driving habits.
- Vehicle discounts: Discounts having to do with your car. “There are discounts available if a vehicle has safety features such as automatic emergency braking, blind-spot recognition, lane assist, and other features,” Sopko says. “These features (depending on the company) can save anywhere between $10-$15 per month.”
- Policy discounts: Discounts that relate to your policy; if you have an auto-home bundle or online billing, for example.
How do car insurance discounts work?
How much you can save depends on factors such as state laws and an insurer’s internal rules and guidelines. Each company will have its own eligibility criteria, and the savings will vary. You should be able to see your discounts on the policy declarations page, though they may not be itemized.
Here are seven things you should know about car insurance discounts.
- Not everyone gets the “up to” discount amount
- Discounts don’t always apply to your overall bill
- State laws require that you get some discounts
- You have to ask for most discounts
- Discount amounts can max out
- Discounts vary by state and insurance company
- Getting discounts doesn’t mean you’re paying the lowest price
1. Not everyone gets the “up to” discount amount
You may see on insurance websites that a discount saves “up to” a percent or dollar amount. Not everyone gets that amount. The highest savings amount may only be for those who meet certain qualifications, such as drivers with clean records.
2. Discounts don’t always apply to your overall bill
Many discounts only apply to specific coverage types, so the price break is applied to what you pay for that portion of coverage and doesn’t come off the entire premium. For instance, anti-theft devices will earn a discount, but only on the comprehensive portion of your bill because comprehensive insurance covers auto theft.
3. State laws require that you get some discounts
Some discounts are required by state law, which means you get the savings regardless of whether your insurance company officially offers it.
One example, according to the Rocky Mountain Insurance Information Association: Twelve states require insurers to give comprehensive insurance discounts for security devices. (Florida, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Rhode Island, Texas and Washington.)
4. You have to ask for most discounts
While state laws mandate some discounts, you have to request others by notifying your insurance company that you qualify. For instance, if you stop commuting a long way for work, you may qualify for a low-mileage discount, but your provider wouldn’t know that unless you told them.
Or, your teen driver may start attending a college that’s far away and therefore qualifies for a student-away discount. That’s why it’s best to review your policy frequently. As circumstances change, you may be able to qualify for more savings.
5. Discount amounts can max out
Insurance companies usually cap the percentage you can save by qualifying for discounts. You might think you can save, say, 80% because you qualify for multiple discounts, but you won’t get that amount.
The maximum discount savings percentage isn’t common knowledge – insurance companies say it is proprietary information – and it differs among carriers. Ask your insurance company what cap it puts on discounts when reviewing discounted car insurance offers.
6. Discounts vary by state and insurance company
Not all discounts are offered in all states or by all insurance companies. Many carrier websites’ discount sections will include a listing of which states are either included or excluded in the small print, so look for that when researching. And, of course, one insurance company may offer a discount for, say, having a certain professional job, while another may not.
7. Getting discounts doesn’t mean you’re paying the lowest price
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.
Which companies offer the most auto insurance discounts?
Insurance companies each have their own menu of available discounts. Below, you’ll see which discounts are offered by major carriers.
What are the best car insurance discounts?
Years licensed and years insured save drivers the most money.
Here are some other discount amounts:
- Student-away discounts decreased premiums by an average of 16%.
- Leasing a vehicle results in a nearly 17% discount.
- Auto-home bundles netted a 13% reduction.
- Professional discounts for scientists and firefighters net drivers discounts of nearly 13%.
How long do I have to be with my insurance company to get a discount?
Some discounts are automatic, while others are applied once you meet some criteria. You might get a discount immediately, for instance, if you buy a new car or bundle your coverage with a home insurance policy.
If your teen driver earns a 3.0-grade point average, a good student discount would be applied at that time, or for example, if you switch to paperless billing, the price break would follow.
The number of years you’ve been insured and the number of years you’ve had a license both offer huge savings on your rates. But they aren’t typically touted as auto insurance discounts because they are quasi-underwriting factors.
That means in some states, how long you’ve been insured and how long you’ve had a license are taken into account when insurance companies set your base rate in the same way your driving record is considered. From there, you may or may not qualify for discounts.
In other states, these variables may be deemed discounts after your rate is set. Regardless, this information is reviewed when you apply for coverage and get a quote. The longer you’ve had continuous coverage and a license, the less you pay.
The average savings for policy renewal/loyalty are below.
What are other ways to lower your car insurance rates?
There are several ways to lower your insurance premium payment every month.
Here are a few tips for cheaper insurance:
- Usage-based insurance can save you money if you enroll in a telematics/pay-as-you-drive programs.
- Shop around and get quotes every time your policy comes up for renewal.
- Improve your credit score, which can lower your rates.
- Improve your driving record by driving safely.
- Increase your deductible for lower rates as long as you are comfortable with the higher amount.
- Drive a car that’s cheaper to insure.
Car Insurance Discounts by State in 2022
- Alaska (AK)
- Alabama (AL)
- Arizona (AZ)
- Arkansas (AR)
- California (CA)
- Colorado (CO)
- Connecticut (CT)
- Delaware (DE)
- Florida (FL)
- Georgia (GA)
- Hawaii (HI)
- Idaho (ID)
- Illinois (IL)
- Indiana (IN)
- Iowa (IA)
- Kansas (KS)
- Kentucky (KY)
- Louisiana (LA)
- Maine (ME)
- Maryland (MD)
- Massachusetts (MA)
- Michigan (MI)
- Minnesota (MN)
- Mississippi (MS)
- Missouri (MO)
- Montana (MT)
- Nebraska (NE)
- Nevada (NV)
- New Hampshire (NH)
- New Mexico (NM)
- New York (NY)
- New Jersey (NJ)
- North Carolina (NC)
- North Dakota (ND)
- Ohio (OH)
- Oklahoma (OK)
- Oregon (OR)
- Pennsylvania (PA)
- Rhode Island (RI)
- South Carolina (SC)
- South Dakota (SD)
- Tennessee (TN)
- Texas (TX)
- Utah (UT)
- Vermont (VT)
- Virginia (VA)
- Washington (WA)
- Washington D.C. (DC)
- West Virginia (WV)
- Wisconsin (WI)
- Wyoming (WY)
Resources & Methodology
CarInsurance.com commissioned Quadrant Information Services in 2022 to field rates for drivers with full coverage car insurance in 4,686 ZIP codes across the U.S. Percentages are rounded to the nearest whole number.
– Michelle Megna contributed to this story.