Where to start with insurance: Discounts

Have you taken a defensive driving course?

If you take a defensive driving or driving school course from a certified school, you can receive a discount of up to 15% on your coverage. In most cases, the class can be completed online.

Some companies will ask you when you’re getting a quote if you’ve taken defensive driving lessons, but even if you’re in the middle of a policy, you can check with the company to see if they offer defensive driving discounts.

Are you a good driver?

Most insurance companies offer a “good driver” discount (also known as a “safe driver” discount), which typically means you’ve been accident-free for a period of time, usually three to five years.

You may also be rewarded for wearing your seat belt, not accelerating or braking too aggressively and keeping consistent speeds. Different companies define what a good driver is a bit differently, so check your policy to see how long you need to be accident-free before a discount applies.

These “good driver” discounts can also work in conjunction with telematics, which is software that tracks drivers. Companies that offer telematics will calculate your rate based on a combination of driving factors like the above, as well as the frequency of your driving and what time of day you’re on the road.

And because not all accidents are created equal, consider whether you need to file a claim at all, particularly for a minor incident where you’re the only car involved and no one was hurt.

Do you have a good credit score?

Your credit score has very little to do with your driving, but it’s a key component insurance companies consider when pricing your premium. 

If you have very low credit (a score of 300 to 579), you can expect to pay nearly $800 more for a six-month premium than someone with exceptional credit (a score over 800). 

It’s also worth noting that this policy varies by state. For example, California, Hawaii and Massachusetts have a ban on using credit scores to determine your insurance rates, while other states offer some restrictions, like not allowing companies to rely solely on your credit score. 

Are you (or another driver on your policy) a recent graduate or a good student?

Drivers under 25 years old often have higher premiums because insurance companies consider them higher-risk drivers. But if you’re cracking the books often, you may be able to crack down on your monthly premiums, too.

Some companies offer good student discounts for young drivers that maintain a grade average of B or above. If you can prove you (or someone on your policy) is a full-time student, you can qualify for some pretty significant savings — between 7% and 20% on average.

Additionally, if a college student leaves their car at home and is attending a university more than 100 miles away from home, your insurance company may reduce your liability coverage.

Are you a homeowner?

Bundling your auto and home/renters insurance is a good way to reduce costs on each policy. The discounts are often applied to most parts of your car insurance, including liability, personal injury protection and uninsured/underinsured motorist premiums. If you move from an apartment to a home while on a policy, check with your insurance company to make sure they have your latest address and ask about potential discounts.

A cool wrinkle to this: Even if your homeowner’s insurance is with another company, several companies will still offer you a discount.

Most insurers offer a new car discount for your collision coverage premium. Each state and company has different rules for what’s covered, as well as what’s considered “new.” Typically, you’ll need to be the first title owner of the vehicle, and the car will have to be either this or last year’s model.  

Do you have an anti-theft device?

Anti-theft devices serve a dual purpose. They can ease the hassle of filing a stolen car claim, and they also might save you money on your insurance premiums. Most companies offer small discounts for features like disabling systems, and larger discounts for more advanced features, like an ignition shutoff or hood lock.

However, most of these savings will go toward your comprehensive coverage premiums. Those aren’t typically the most expensive part of auto insurance, so buying a pricey device simply to save on your insurance is not a great idea. But if you were planning to buy an anti-theft device anyway, it can be a nice bonus.

Do you get your bill delivered electronically and/or use auto pay?

Do you find it irritating to walk to the mailbox and go through the process of paying your monthly bill? Why not save yourself time and a little money, too?

Most insurance companies offer discounts if you set up e-billing and/or auto pay. You will still get notified when your bill is being paid, but it’s one less thing you have to worry about. (Plus, you’re saving on paper).

Your company may also provide a discount if you pay your premium in full, whether for six months or a full year. Companies also offer a bit of savings for purchasing in advance before your current insurance policy with a competitor ends. 

Even if you’re on auto pay, it’s a good idea to check in on your policy every so often. You may be able to find even more discounts!

Do you drive infrequently?

If you don’t drive your car very often, you may be able to get a discount on your monthly premium. However, you will likely have to demonstrate multiple months of limited driving, instead of just a one-off or a couple of weeks.

Low mileage is one of the driving forces behind telematics, or usage-based insurance. This form of policy rewards good drivers based on the amount of miles or time they drive in a given period.

You may have a job that encourages remote working or that allows you to walk to the office and don’t need to drive as often, which could help you save. Conversely, if you have a long commute through heavy traffic areas, you’ll likely end up paying more through telematics. 

Even if they’re on a typical policy, frequent drivers may be considered higher risk simply because of how often they’re behind the wheel.

Do you work in a certain profession?

Certain professions require less driving than others, and insurance companies will take note of that. Some companies will also offer discounts for specific jobs, like teachers, law enforcement and scientists. Additionally, you may find discounts for senior citizens and military members.

Are you loyal to a certain company?

Some companies offer lower premiums if you’ve stuck with them for a while, to reward your loyalty. Of course, it’s possible that even a discount with one company might be more than you’d pay with another company. Even with those loyalty discounts, it’s a good idea to shop around every six months to a year to make sure you’re getting the best deal.

Are you currently insured?

Finally, any lapse in insurance coverage can impact your premiums. If it’s your first time buying car insurance, you’ll likely just have to stomach the higher price. If you’re on a policy that’s nearing its end, though, you’ll have to keep a close eye on your timing.

Let’s say your current policy ends on the 15th next month. If you were to wait until the following month — or even until the 16th — to get a new policy from a different company, you’d pay a significantly higher price on your premium than if you updated your policy earlier in the month. In fact, several companies will offer a slight decrease for purchasing a week or two in advance.