How to Get Discounts on Car Insurance
Auto insurance is a big-ticket item, it can run at an average of $100 a month. But the good news is this: There are ways to save on car insurance, including many discounts that insurance companies offer to drivers with good habits or who meet certain criteria.
How Car Insurance Is Priced
Many of the factors that determine how much you pay for car insurance are out of your control. Insurance companies continually gather statistics to gauge the accident risk of various groups based on factors such as age, gender, geographic location or vehicle make. Credit scores also can affect the cost of auto insurance.
Insurance companies are not free to set any premium rate they choose, however. Car insurance rates are tightly regulated by the Washington State Office of the Insurance Commissioner. Before raising or lowering rates, insurance carriers must file paperwork with the state proving the change is based on solid data. In Washington state, carriers must demonstrate their rates are not “excessive, inadequate, or unfairly discriminatory.”
As mentioned, your age, where you live, and what kind of car you drive affect how much you pay. A new teenage driver, for example, almost always pays more for auto insurance than a driver who is 55 years old or older. Likewise, you pay more if you are living in metro Seattle than if you live in a rural ZIP code in Eastern Washington that sees few accidents. The performance of drivers in your ZIP code in past years can raise or lower your premium significantly.
You also pay more for comprehensive collision insurance for a new SUV or an expensive sportscar than for a used family wagon. The more expensive the car, the more expensive it is to replace. Certain car makes and models are statistically more likely to be stolen, as well.
Car Insurance Savings
Fortunately, there are steps you can take to lower the cost of your car insurance. One of the surest ways to save money is to bundle car insurance with home insurance, which may lower your auto insurance premium by as much as 20 percent. By doing so, you typically save money on the home insurance premium as well. You also can score significant savings by insuring multiple cars on the same policy. You also can get a discount if you pay the entire premium in full in advance.
Insurance carriers also reward clean driving records, customer loyalty and good behavior with lower premiums. In Washington state, drivers 55 years old and older, for example, can obtain a discount by taking a defensive driving test, which is an eight-hour collision prevention course. AAA Washington offers an online version of this course.
Several special groups also can qualify for discounts, although the availability varies by insurance company. For example, students with good grades can obtain discounts on auto insurance. AAA members automatically qualify for a discount of as much as 8 percent on their auto insurance.
Drive Less? Pay Less
Another common way to save on car insurance is to obtain a safe-driving discount. Today, many insurance companies can monitor driving habits via a smartphone app. These apps are handy because they can give you immediate feedback on your daily driving performance. Read More About How Drive Apps Work.
These usage-based discounts are more popular now than ever. If you have been laid off or are no longer commuting to work, explore a usage discount with your insurance company. Once you lock in the discount, it likely will stay in place for the duration of the policy. Read More About Insurance Matters When You Work from Home.
Just as the premiums quoted by insurance companies can vary widely, so can the discounts they offer. Some insurers cap the number of discounts on a policy. Your insurance agent can help you explore the various discounts that are available to you.
— Written by John Woodworth