5 auto insurance discounts you’ve probably never heard of
Auto insurance is an expensive necessity, and although drivers received a brief rebate early in the pandemic, the respite was short-lived.
Several insurers have already returned to increase their rates, bringing the average premium to $ 1,450 per year, according to the comparison site SmartFinancial.
Need a break that will last? You probably already know a few ways to lower your fares, like reducing your mileage or installing a device to monitor your driving habits.
However, insurers use an incredibly wide range of information to decide on your premiums – and that means there are plenty of potential discounts available that you may not be aware of.
1. The pleasure or agriculture discount
Available from companies like Allstate, American Family, Progressive, Amica, Liberty Mutual, Nationwide, and State Farm.
Typical auto insurance policies are designed for commuters. You are probably expected to spend a lot of time on the road in heavy traffic conditions.
But if you only use your vehicle for special occasions, leisurely Sunday walks and occasional errands, you can unlock a âpleasure useâ discount.
You can get a similar discount if you only use your vehicle on a farm for towing or for commuting. You are much less likely to have an accident and you will not be driving long distances, which will reduce wear and tear.
Depending on your insurer, the discount can range from a few dollars a year to over $ 300, so it pays to shop around.
If you are requesting a discount for fun or the farm, do not start driving this vehicle to get to work without notifying your insurer. Your claim could be denied if you have an accident. You may also need to sign up for driver monitoring technology that tracks your mileage.
2. The correct student discount
Available from companies like State Farm, Farmers, American Family, USAA, Allstate, Travelers, Nationwide, Progressive, Amica, and Liberty Mutual.
Good grades don’t just earn you scholarships. Most major insurance companies offer student discounts of up to 25%.
To qualify, most insurance companies require you to be between 16 and 24 years of age and enrolled full-time in high school or college. You will typically need to maintain a B GPA or GPA of 3.0 or better or be ranked in the top 20% of your class.
You may also be eligible if you are on your school’s Honor Roll or Dean’s List.
And after you graduate? Some insurance companies offer additional discounts to people with a graduate degree, such as a master’s or doctorate, because they are statistically less likely to make a claim.
And don’t forget that you can get discounts when your children are at school if they are insured on your vehicle. Usually, they must be under 25, live at least 100 km from home and only have access to your car during school holidays.
3. The wedding discount
Available from companies like USAA, Progressive, and Allstate.
If you are afraid of commitment, this may convince you to get married.
Even if your spouse doesn’t drive or you bundle your coverage, married drivers save an average of $ 123 a year on auto insurance, according to LendingTree’s ValuePenguin site. That’s about 5% of a typical policy.
Many insurers consider married couples to be less risky than single drivers in terms of driving habits and financial stability. (They’re also more likely to carry home or life insurance, so insurers are likely happy to keep going.)
The use of non-determining factors to set auto insurance rates remains controversial. The federal government is currently studying the practice, and legislation like California’s Proposition 103 has limited their impact in some areas.
4. The discount for homeownership
Available from companies such as State Farm, Allstate, Amica, Travelers, Nationwide, Progressive, Farmers, and Liberty Mutual.
Most homeowners know that you can take advantage of a multiple policy discount by bundling your home and auto insurance policies with the same company.
However, many auto insurers offer a homeowner discount even if you find a better deal on your home insurance elsewhere and don’t bundle them together.
Auto insurance discounts for homeownership can be substantial. A 2016 Consumer Federation of America study found that, on average, renters paid up to 47% more for auto insurance than homeowners.
And your accommodation can affect your auto insurance rates in other ways. If your home’s location presents a low risk of theft or vandalism to your car, or your home has a garage where you can safely store your vehicle, you may also be eligible for discounts for this.
If you’re still a tenant, remember that mortgage rates are at all-time low levels and prices shouldn’t go down anytime soon.
5. The high credit score discount
Available from companies like State Farm, Farmers, American Family, Travelers, Progressive, Nationwide, and Allstate.
The three little digits that make up your credit score affect a lot more than your interest rates.
A high credit score can also unlock lower premiums, as various studies – including one from the Federal Trade Commission – have determined that your credit can actually predict your likelihood of making an auto insurance claim.
Some states, including California, Hawaii, Massachusetts, and Michigan, prohibit or restrict the use of credit scores to determine insurance rates. Other areas, including Virginia and the District of Columbia, have passed laws that guarantee businesses lower rates for good credit if they increase them for poor credit.
However, most states allow insurers to use credit-based insurance scores. Just like a standard FICO score, your payment history, debt level, credit history, number of recent claims, and combination of credit types will all be taken into account.
Bad credit can more than double your insurance rates, says ValuePenguin, while those with great credit pay up to 24% less than people with average credit. This is why it pays to make sure that your credit score is in the best possible shape.
How to get these and other discounts
These are just a few of the many discounts available, but remember: not all discounts are offered by all insurers in all states, and not all of them apply automatically. You have to call and ask.
That said, if your current insurer isn’t offering you a deal, it may be time to look elsewhere.
It is a good practice to review your policies every six months and look for the best rates and coverages. The same goes for your home insurance and health insurance.
Different insurers use very different calculations to determine your premiums. Cheaper isn’t always better if a policy omits critical coverage, but if you don’t bother to compare, you could be paying up to $ 1,000 a year for the same coverage.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.