Common Auto Insurance Discounts and How to Qualify
When shopping for auto insurance, price is naturally an important consideration. But instead of simply looking for the lowest premium, it is also worth understanding the discounts that may be available and whether you qualify.
Insurance companies may offer discounts based on several factors, including the policies you purchase, your driving history, how long you have been insured, and characteristics of the drivers in your household.
Discounts and eligibility requirements vary by insurance company and state. Here are several things consumers should consider when reviewing auto insurance discounts.
1. Multi-Policy Discounts
One of the most common insurance discounts is the multi-policy, or bundling, discount.
An insurance company may offer a discount when you purchase more than one type of insurance through the same company. A common example is combining auto and homeowners insurance, but other policy combinations may also qualify depending on the insurance company.
Bundling can be attractive, but don’t evaluate it based solely on the discount percentage. Consider the overall cost and coverage of all the policies involved. A larger advertised discount doesn’t necessarily mean the lowest overall premium or the best coverage for your situation.
2. Discounts Related to Your Driving Record
Your driving history can play an important role in determining your auto insurance premium.
Depending on the insurance company, drivers with favorable driving histories may qualify for discounts or rating benefits. Accidents, moving violations, claims, and other factors may affect eligibility.
Requirements vary considerably, so don’t assume that one insurance company’s definition of a good driver will be identical to another’s. If you’re comparing auto insurance quotes, ask which driving-related discounts apply and whether they have specific requirements to maintain them.
3. Customer Loyalty or Longevity Discounts
Some insurance companies may recognize customers who have maintained coverage with them for a certain period.
That doesn’t mean you should stay with an insurance company regardless of price, coverage, or service. It simply means longevity can be one factor to consider when deciding whether switching companies makes financial sense.
Before changing insurers for a lower quote, consider the entire insurance package—including coverage differences, deductibles, discounts, and service.
4. Discounts for Young Drivers
Adding a newly licensed or youthful driver to an auto insurance policy can significantly affect the household’s insurance premium.
Fortunately, some insurance companies offer discount opportunities for qualifying young drivers. A good-student discount may require documentation showing that the student meets the insurance company’s academic requirements. Driver-training discounts may similarly require completion of an approved course or program.
Parents should ask their insurance agent what programs are available before assuming that a particular course or academic achievement will automatically qualify for a discount.
5. Multi-Vehicle Discounts
Households with more than one vehicle may also qualify for a multi-vehicle discount when the vehicles are insured under the same policy or with the same insurance company.
If you’re adding another vehicle to your household, this is a good time to review the entire policy rather than looking only at the cost of insuring the new vehicle.
6. Ask About Discounts—But Focus on the Final Premium
Insurance companies don’t all offer the same discounts, and even similarly named discounts may have different eligibility requirements.
This is why comparing insurance based solely on the number or percentage of discounts advertised can be misleading.
One company could offer numerous discounts and still have a higher final premium than another company. More importantly, an inexpensive policy may not provide the limits, deductibles, or optional coverages that fit you.
The better question is: What coverage am I receiving, and what will I actually pay after all applicable discounts are included?
7. Review Your Discounts Periodically
Your insurance needs and household circumstances can change.
You might purchase a home, add another vehicle, have a young driver become eligible for a student-related discount, or experience another change that affects your policy.
That’s one reason an insurance review can be useful. Instead of assuming every available discount is automatically applied, review your policies periodically and ask whether anything has changed.
Discounts Are Only One Part of Your Auto Insurance
Saving money on insurance is important, but discounts shouldn’t be considered separately from coverage.
A good auto insurance policy should balance price, coverage, deductibles, available discounts, and your individual insurance needs.
Instead of asking only, “How many discounts can I get?” consider asking, “Am I receiving the appropriate coverage at a competitive price?” That approach can help you make a more informed insurance decision.
Have Questions?
Oberryman Insurance Agency can help you review your auto insurance coverage and identify discounts you may be eligible for. We can also help you understand how different coverage options and deductibles affect your overall insurance program. If you live in Northern Virginia or elsewhere in Virginia, Maryland, or Washington, D.C., contact Oberryman Insurance Agency to discuss your auto insurance needs or request a quote.
Insurance coverage, eligibility, discounts, limits, exclusions, and availability vary by insurance company, policy, state, and individual circumstances. This article is provided for general informational purposes and is not intended to modify or replace the terms and conditions of an insurance policy. Please refer to your policy and contact Oberryman Insurance Agency to discuss your specific insurance needs.
