Car Insurance Discounts - Know How Much You'll Save in 2019

Car insurance discounts cover image

Car insurance can be quite expensive. Luckily, there are numerous discounts on auto insurance, which can help you reduce the premium without compromising the quality of your coverage. 

We crunched the numbers and did extensive research to help you get the most out of them. 

First, we explained how premium reductions work and how to obtain them. Then we made a list of all the discounts available nationwide and explained each one. Finally, we ranked the leading US insurers by how many opportunities they offer to reduce your premium. Thus, if you want to minimize spending and maximize insurance quality, you’ll find all the resources you’ll ever need in this article.

How Does Car Insurance Discount Work? 

A discount is a premium reduction expressed in percentages that’s awarded to a specific type of customers. Usually, it’s because they present a lower risk, but it may also be because a customer is a part of an esteemed group such as the US Army. It may affect the entire premium or just a particular coverage, such as collision. 

The vast majority of companies stack multiple insurance discounts in descending order. The process looks like this:

  • Original Premium ($1,000) – 20% Accident-Free Discount = Reduced Amount 1 ($800)
  • Reduced Amount 1 ($800) – 5% Bundle Discount = Reduced Amount 2 ($760)

It’s worth noting that some insurers will not allow total discounts that exceed 25% of the starting premium.

Let’s check next how can you qualify for a discount.

How to Qualify for an Auto Insurance Discount

The answer depends on the kind of discount you are trying to obtain. The easier the insurance company can verify if you are eligible, the easier it is to achieve a premium reduction. 

That’s why a discount such as Bundle, awarded to insurers that have multiple policies with the same company, takes just one click. Once you select it, the insurer will check in its database how many policies you currently have, and then award the premium reduction. 

On the other hand, Good Student Discount can be selected just by checking a box, but the student would have to deliver her academic transcript to be granted the premium reduction. This is yet another example of a considerable discount that is relatively easy to obtain, provided that you are a student.

However, not every type of discount is easy to get. Others may require even more work. For instance, to qualify for GEICO defensive driving discount, you’ll have to complete an accredited training program that takes from four to eight hours. 

Nonetheless, it’s generally true that the more effort a discount requires, the higher the premium reduction it will bring. 

It’s also worth noting that it might happen that a discount is listed on the company’s site but it is not available at the moment you request an online quote. If that happens, call the company’s customer service and verify how to add it to your policy.

What Auto Insurance Discounts Are Available

There are numerous premium reductions available in the market. Here, we listed the most common ones and grouped them by categories. Furthermore, we provided a brief explanation of how they work and how much they lower the price percentage-wise.

Loyalty

Customer Loyalty

Bundle 

If one asked us how to get cheap car insurance without much effort, we would suggest bundling. Whether you are insuring multiple vehicles or covering various items, such as your house, car, and a snowmobile, you are bound to save. A typical discount on your auto insurance policy is about 10%, but it can reach as much as 20%

Early Renewal 

If you get a quote before your current policy expires, you can obtain a premium reduction that ranges from 3% up to 10%.

Loyalty 

If you have been loyal to your insurer, you can receive a discount based on the amount of time you’ve spent with the company. It’s typically about 5%. However, you should know that this may be a false advertisement in states where price optimization is legal

In these states, insurers will use software to estimate the maximum amount you are “willing” to pay. Then they’ll try to charge you that amount by offering an initially higher price and slashing it with fake automobile insurance discounts.

Continuous Insurance 

The majority of auto insurance calculators will ask you for how long have you been insured. That’s because uninterrupted coverage without claims or accidents is strong proof that you are a safe driver. And safe drivers pay less — up to 15%, depending on the insurer.

Family

Some insurers offer fantastic premium reductions if the entire family is insured. For instance, Nationwide allows all members of the same family to share a discount. This means that if one family member gets a rate reduction, all others listed on the same policy will get that discount.

Demographic

Demographic

Good Student

This discount is typically granted to students and newer drivers who are 16 to 24 years old. It’s among the car insurance discounts that reduce the premium significantly – up to 15%. To qualify, a student needs to have a GPA of B (3.0) or higher, and provide the academic transcript upon request.

Student Away at School

If a student listed on the policy is studying away from the place where the car is garaged, he automatically presents a lower risk. That’s why insurance companies will give such a customer a discount ranging from 5% to 10%. Many insurers set the minimum distance at 80 or 100 miles.

Low Income 

Some states, such as California and New Jersey, offer specialized insurance programs for low-income drivers.

Senior 

Some US states, such as Massachusetts, have a government-mandated auto insurance discount for seniors. This implies that you’ll automatically qualify for lower rates just by turning 65. In other states, there are specialized driving courses for seniors that will get you a premium reduction.

Homeowner 

Many insurers offer a premium reduction of up to 5% to those who own a home. It does not have to be insured with the company.

Military

Affiliation 

Military 

Many auto insurance companies offer a military discount for former and current army members and associated groups. For instance, GEICO provides up to 15% lower premiums for such groups.

There are even additional discounts and benefits for customers who are deployed in dangerous combat environments (as they should be).

Government 

GEICO is one of the notable insurers that offers a premium reduction to current and retired federal government employees with a GS-7 Payscale.

Educational and Academic

High school teachers or university professors can also qualify for a substantial premium reduction. Some insurers even offer a discount to former students of specific universities. For instance, PEMCO provides lower rates for the University of Washington Alumni.

Associated Companies 

Many insurers provide coverage to employees of various associated enterprises and organizations. Perhaps the leader in this field is MetLife, which provides an incredible 50% discount on car insurance for affiliated customers.

Farm Bureau Members 

Nationwide initially sold its products only to farmers. In the true spirit of its roots, the company offers 10% lower prices to the members of various Farm Bureaus

Various Customer Clubs 

There are many customers associations and clubs which can help you get lower rates. For instance, Ameriprise awards Costco customers, while Farmers has an exclusive partnership program with Visa.

Driving Habits

Driving Habits and Courses 

Low Mileage

It does not sound like rocket science that if you drive less, the chances are smaller that you’ll be involved in an accident. That’s why you can get as much as a 40% discount on your auto insurance if you reduce your mileage by half in your quote. There are even companies such as Metromile that specialize in low-mileage drivers

Vanishing Deductible

Many insurers decrease your collision deductible for $100 each year you do not make a claim. Nonetheless, the majority of companies set the maximum premium reduction limit at $500.

Defensive Driving 

If you are a driver younger than 24 or older than 55, you can complete an accredited defensive driving course and get a rebate. American Family, for instance, offers a premium reduction ranging from 5% to 10%. 

On the other hand, if you are with GEICO, a defensive driving course discount depends on the state where you live, ranging from 5% to 15%.

Young Driver Training 

Some companies offer training programs custom-designed for younger drivers. For instance, State Farm’s Steer Clear program includes theoretical knowledge test and five hours of practice driving. If a young driver passes all the exams, she’ll get a certificate that guarantees a premium reduction of up to 15%.

Accident–Free 

If you have been accident and violation-free for 3-5 years, you can get a significant discount on insurance. GEICO, for instance, offers 26% lower rates for such drivers.

Accident Forgiveness

Some insurers sell this benefit as an optional coverage, while others provide it for free after a certain period. After 3-5 years with the company, your first at-fault accident won’t increase your rates.

Tracking Driving Habits

This could be a handy tool if you’re a good driver. Many companies offer a substantial discount on car insurance if you enroll in a program where the insurer tracks your driving habits. This is done either by a mobile app or a specialized GPS device. 

The insurer will record sudden braking and acceleration, night driving, speed, and similar data. Then it will grant you a discount based on how well you score. Be careful, though. Some companies may increase your premium if your results are subpar.

Vehicle Type

Vehicle-Related

Green/Electric/Hybrid

Major insurers, such as Travelers, Farmers, or Liberty Mutual, offer discounts to owners of electric or hybrid vehicles. This means that Tesla owners should choose these companies over AAA, which increased rates for Tesla models.

ABS Brakes 

If your vehicle is equipped with anti-lock brakes, many insurers will grant you a 5% reduction in the collision section of the premium.

New Car

Often called “new car discounts,” these premium reductions are granted to the customers who are first owners of the vehicles that are younger than two years. For instance, Allstate gives a 15% premium reduction

Anti-Theft

Depending on how advanced your vehicle’s anti-theft system is, you can get up to 25% cheaper comprehensive coverage. 

Airbags 

You can reduce your MedPay or PIP coverage by as much as 40% if your vehicle is equipped with multiple airbags.

Headlights/Seatbelts 

Adaptive and daytime running headlights can get you a small auto discount (up to 2%) on certain coverages. Additionally, always use your seat belts to save an extra 15%.

Payment Method

Payment Method 

Auto-Pay

Configure automatic premium transfer, and you’ll save. NYCM, for instance, offers 2.5% lower premium for customers that choose this option.

Paid-in-Full 

Paying the entire premium upfront can save you as much as 5%. However, not all insurers offer this discount.

Advanced Quote 

The car insurance market is highly competitive. That’s why major companies will offer a considerable discount on auto insurance if you switch to their insurance before your current policy expires. Liberty Mutual is the leader in this department by providing a premium reduction that can reach as much as 45%.

Paperless

The planet and your bank account will thank you for going green. If you decide to handle your entire insurance file online, you can save as much as 5%.

Which Company Offers Most Discounts on Auto Insurance?

Here we list all the discounts that the major US insurers offer. The number in the bracket shows the total number of premium reductions available. Keep in mind that the exact rebate and availability vary by state.

Amica Discounts (18)

  • Loyalty
  • Multi-Line
  • Claim-Free
  • Multiple Auto
  • Home Ownership
  • Family Discount
  • Paid in Full
  • AutoPay
  • E-discounts
  • Anti-theft
  • Electronic Stability
  • Passive Restraint
  • Forward-Collision Warning
  • Student Away at School
  • Adaptive Headlight
  • Defensive Driver Training
  • Good Student
  • Accident Forgiveness

American Family Discounts (18)

  • Multi-Product
  • Multi-Vehicle
  • Steer into Savings
  • Good Driving
  • Loyalty Discount
  • Auto Safety Equipment
  • Defensive Driver
  • Low Mileage
  • Generational
  • Good Student
  • Away at School
  • Young Volunteer
  • Early-Bird
  • Autopay
  • Discount for Paying in Full
  • Paperless
  • Safe Teen Driver
  • KnowYourDrive

Nationwide Discounts (17)

  • Family Plan
  • Total Loss Deductible Waiver
  • SmartRide
  • Vanishing Deductible
  • Accident Forgiveness
  • Bundle
  • Good Student
  • Accident-Free
  • Paperless Documents
  • Advance Quote
  • Safety Features
  • Affinity Organizations
  • Farm Bureau
  • Plenti Program
  • Defensive Driving
  • New Vehicle
  • Loyalty

Travelers Discounts (17)

  • Accident Forgiveness
  • Bundle
  • MultiCar
  • Home Ownership
  • Hybrid/Electric Vehicle
  • Safe Driver
  • Continuous Insurance
  • New Car
  • Early Quote
  • Electronic Funds Transfer
  • Paid in Full
  • Good Payer
  • Good Student
  • Student Away at School
  • Driver Training
  • Affinity Programs
  • IntelliDrive Program

Liberty Mutual Discounts (17)

  • Homeowners
  • Accident Forgiveness
  • Military
  • Advanced Safety Features
  • Good Student
  • Anti-Theft
  • Alternative Energy
  • Violation Free
  • Student Away-at-School
  • Multi-Policy/Multi-Car
  • Early Shopper
  • Online Purchase
  • Pay-in-Full
  • Paperless Policy
  • RightTrack Program
  • Preferred Payment
  • Accident-Free

GEICO Discounts (15)

  • Air Bag
  • Anti-Lock Brakes
  • Anti-Theft System
  • Daytime Running Lights
  • Five-Year Accident-Free Good Driver
  • Seat Belt Use
  • Defensive Driving
  • Driver’s Education
  • Good Student
  • Emergency Deployment
  • Eagle Discount
  • Membership and Employee Discounts
  • Military
  • Bundle
  • Accident Forgiveness

Progressive Discounts (14)

  • Accident Forgiveness
  • Automatic Payment
  • Pay in Full
  • Paperless
  • Sign Online
  • Online Quote
  • Homeowner
  • Distant Student Discount
  • Good Student
  • Teen Driver
  • Snapshot (Tracking Driving Habits)
  • Continuous Insurance
  • Multi-Car
  • Multi-Policy

USAA Discounts (13)

  • Safe Driver
  • Defensive Driving
  • Young Driver Training
  • Good Student
  • New Vehicle
  • Multi-Vehicle
  • Annual Mileage
  • Vehicle Storage
  • Length of Membership
  • Family
  • Military Installation
  • Bundle and Save
  • Accident Forgiveness

Farmers Discounts (13)

  • Accident Forgiveness
  • Alternative Fuel
  • Anti-Theft Devices
  • Business/Professional Group
  • Bundle
  • Electronic Funds Transfer
  • ePolicy
  • Good Student
  • Homeownership
  • Multi-Car
  • Paid in Full
  • Safe Driver
  • Senior Defensive Driver

Auto-Owners Discounts (12)

  • Multi-Policy
  • Payment History
  • Paid in Full
  • Green Discount
  • Advance
  • Multi-Car
  • Teen Driver Monitoring
  • Good Student
  • Favorable Loss History
  • Student Away at School
  • Safety Feature
  • TrueRide

State Farm Discounts (12)

  • Accident-Free
  • Defensive Driving Course
  • Drive Safe & Save™
  • Driver Training
  • Good Driving
  • Good Student Discount
  • Multiple Automobiles
  • Multiple Line
  • Passive Restraint
  • Steer Clear® Safe Driver
  • Student Away at School
  • Vehicle Safety

Allstate Discounts (12)

  • New Car
  • EZ Pay Plan
  • Allstate eSmart®
  • Anti-Lock Brake
  • Anti-Theft Device
  • FullPay
  • Allstate Accident Forgiveness
  • Responsible Payer Discount
  • Multiple Policy
  • Smart Student
  • Early Signing Discount®
  • Safe Driving Club

AAA Discounts (11)

  • Accident Forgiveness
  • Safe Driver
  • Bundle
  • Multiple Vehicles
  • Mileage
  • Discount for Loyalty
  • Advanced Purchase
  • Discount for Paying in Full
  • Good Student
  • AAA OnBoard
  • Glass Deductible Discount

MetLife Discounts (11)

  • Automatic Payment
  • Bundle
  • Defensive Driver
  • Superior Driver
  • Good Student
  • Deductible Savings
  • Mature Driver
  • Auto Safety Equipment
  • The MyJourney
  • Windshield Repair
  • Associated Companies

Erie Discounts (9)

  • Safe Driving
  • Low Usage
  • Safety Equipment
  • Young Driver
  • Bundling Multiple Cars
  • Bundling Multiple Policies
  • Paying Upfront
  • Loyal Customers
  • Accident Forgiveness

Frequently Asked Questions

1. What is the cheapest car insurance?

The minimum insurance mandated by your home state, bought from an affordable company such as Progressive, GEICO, or Erie, will be the most affordable. 

However, the cheapest insurance is not always the best. We would recommend getting higher limits and studying insurance rankings to see which company offers the best customer service and financial strength. 

2. How can I get discounts on car insurance? 

To get a discount for you, it is necessary to provide a proof that you meet the listed criteria. Sometimes, an insurance company can easily verify if you qualify in its database. In other cases, you’ll need to deliver a material proof, like a driving course certificate.

3. Is GEICO really cheaper? 

Based on our extensive quote comparison, GEICO is really among the cheapest companies in the US. Progressive, Farmers, USAA, Mercury, and Erie are other worthy alternatives for budget-conscious drivers. 

4. How can I lower my car insurance rates?

Our number-one advice is to compare quotes from multiple insurance companies. That’s because prices vary substantially. Our typical findings where that the cheapest company was 60% less expensive than the priciest options. 

Additionally, pick every discount on auto insurance that you can, and try to maintain a good driving record and high credit rating.

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