We all know those insurance commercials: they advertise their rates and somehow they’re all the cheapest. But when you read between the lines, you begin to see that cheap isn’t always the way to go with protecting your car. Still, here at The Zebra, we believe there are always ways to save on insurance without having to sacrifice quality or service.
There are other ways to save, however.
We get it. You can’t just move to a different state because living in Michigan causes your insurance rates to be high. Just like there are times when you don't want to sacrifice customer service and claims satisfaction just to save a few bucks. Let’s break down the most common discounts and how much you can save.
This discount refers to having two types of insurance policies under one insurance company. Common policies are home/auto or renters/auto. Between a home/auto discount and a renters/auto discount, the discount is greater for the former - with homeowners saving an average of $110 per year while a renter typically saves an average of $72 on their auto insurance. The discount affects both your policies, but the amount above refers to your auto insurance only.
Defensive Driver Discount
This discount entails taking an actual defensive driving course and then presenting your insurance company with proof (sometimes a receipt or transcript) of it. The logic behind this discount is clear: a safer driver makes you a cheaper client because you’re less likely to have a claim. Before you take the course, however, make sure your insurance company offers the discount first. Not every insurance company will honor the discount and some have specific guidelines for the courses you are allowed to take.
If your car comes with anti-theft devices or if you have services like LoJack, your insurance company usually provides a discount. The discounts tend to be smaller than a multi-policy or defensive driver discount, but can still help with making premium payments. On average, using a disabling anti-theft device can save you an average of $11 per year.
Good Driver Discount
Naturally, this discount is offered to you if you have a clean driving record, meaning no accidents or citations. This is typically a substantial discount and a lot of times it is automatically added to your policy when your Motor Vehicle Report or CLUE report is pulled at the inception of your auto policy. Still, if you are sure you have a clean driving record and are not receiving any discount, speak with your insurance company and ask if they offer a discount for good drivers.
Many companies offer discounts for active or former military members and their families. The amount and qualifications differ per company but you should ask if your current company has this discount.
Like a multi-policy discount, a multi-car discount refers to having more than one car with a single insurance company. Typically, the discount is automatically added either at the policy inception (if two cars were originally added) or when you add the second vehicle to the policy.
Preferred Payment Discount
This discount refers to the manner in which you make your insurance payments and has tiers, typically. For example, if you pay your entire premium up front, you are often given a discount which is usually the highest preferred payment discount. On average, a paid in full discount can save $62 per year on your auto policy. Moreover, if you set up automatic payments from a bank account, you can often receive an “EFT discount.” Here, EFT refers to electronic funds transfer and can save about $28 annually. If you are able to pay upfront or through automatic payments, this is a discount worth considering.
This discount goes by many names but the idea is the same. Some insurance companies will offer a discount based on your occupation. Statistically, some occupations like teachers, physicians, or police officers are less likely to file a claim and thus pose less of a risk. Because of this, some insurance companies return the savings back to you. Usually, they will require you to submit some type of proof of your profession—a photocopy of your degree is common.
Good Student Discount
If you have a young driver, you understand how expensive they can be to your insurance policy. Given the number of claims they cause, teenagers look like considerable risks for insurance companies and they charge accordingly for them. If your son or daughter has the grades, typically above a 3.0 GPA, speak with your insurance company about a good student discount. Normally, they’ll ask for a transcript every policy period (6-12 months) as proof.
You’ve heard the phrase “you get what you pay for.” Well, it’s the same for car insurance.
Sometimes an insurance company is cheap simply because they offer very little in terms of customer support or because they cut corners in their claims process—leaving you to pick up the pieces. This is something to consider if an easy and reliable claims process or customer satisfaction is important to you when looking for cheaper options.
At the end of the day, even with all the discounts, car insurance can still be very expensive. You could be living in Toledo, Ohio with all of the above discounts and still be spending too much money on auto insurance. Because of this, we recommend you shop for car insurance every 6 months to ensure you're getting the best possible rate.