Aside from keeping a clean driving record, one of the best ways to save money on automobile insurance is to make sure all applicable discounts are applied to your quote or policy premiums. Although some agents will tell you about all the available discounts to help you reduce your premiums, there are many less experienced agents who may not alert you to all these discounts. It is a good idea to ask about each discount you believe you may qualify for. You may have to
provide documentation to receive some of the discounts, such as an anti-theft device discount for a device installed after the car was manufactured, but the money you save on your automobile insurance is worth the trouble of obtaining the documentation.
Here is a list of discounts that many insurance companies offer on their automobile insurance policies. Not every insurance company will offer every discount, and there may be additional discounts mandated by your state.
Airbags. Your insurance company may provide a discount if your motor vehicle has front airbags and may provide an additional discount if the vehicle has side curtain airbags. This discount runs between 5 and 10 percent off your policy premiums. Since all vehicles manufactured since 1991 have airbags, it is likely that insurance companies will stop offering this discount over the next decade. Insurance companies verify whether a vehicle has airbags and the type of airbags from information derived from the Vehicle Identification Number.
Anti-lock Brakes. If your motor vehicle is equipped with anti lock brakes, you may be able to obtain a 5 to 10 percent discount off certain policy coverages. Insurance companies verify whether a vehicle has anti-lock brakes from information derived from the VIN.
Anti-theft Device. Many companies offer a discount if your vehicle is equipped with an anti-theft device. Some companies offer different levels of discounts for different types of anti-theft devices, based on data that indicates how effective each type of device is at deterring vehicle thefts. Depending on the type of anti-theft device your vehicle
has, you could save as much as 15 to 20 percent off certain coverage premiums.
If your motor vehicle came from the manufacturer with an anti-theft
device installed, your insurance company should be able to verify this
via information contained in the Vehicle Identification Number. If your
antitheft device was installed after the vehicle was manufactured, you
may need to provide your insurance company with proof that the
device was installed, such as a copy of the sales and installation
receipt from the company that installed your anti-theft device.
Claims-Free Renewal. Your insurance company may provide a
discount for each successive policy term during which no claims were
submitted for payment under your policy. This discount accrues over
successive policy periods, so the longer you keep your insurance
policy without submitting a claim, the higher your discount will be.
If you do submit a claim for payment, you may lose all claims-free
renewal discounts you have accrued before the claim.
Daytime Running Lights. If your car is equipped with daytime running
lights, which automatically turn on when the car is running regardless
of whether it is dark or light outside, you may be eligible for a discount
on your automobile insurance policy premiums. This discount can
save you 5 to 10 percent on certain policy coverages.
Driver Improvement Course. Your insurance company may offer you
a discount for completion of a driver improvement course
administered by your state's Department of Motor Vehicles or similar
entity. This discount is available only when you have taken the course
voluntarily, instead of being forced to attend the course by a court.
Some states allow insurance companies to offer this discount to
people only over a certain age (often 55 or 60), hoping that older
drivers will use the discount as an incentive to attend a refresher
course to sharpen their driving skills.
Good Student. Some insurance companies offer students a discount
for maintaining good grades. The criteria and amount of the discount
vary from company to company. If you or a driver in your household
who is a student qualifies for this discount, you may need to submit a
copy of a report card or transcript to your agent so your policy may be
Homeowner. If you own your home, condominium, or trailer, you may
be able to qualify for a discount on your automobile insurance
premiums. The rationale behind this discount is that people who own
homes are more financially responsible and less risk tolerant than
people who do not own their homes. Regardless of whether this
rationale is valid, you can take advantage of auto insurance savings if
you own your home.
Multiple Line. If you have more than one type of policy with the same
insurance company, such as an automobile policy and a
homeowner's policy, you may be able to save money on both policies.
Some companies offer a discount of 10 to 15 percent for
policyholders who hold multiple policies with the same insurer.
Multiple Vehicle. If you insure more than one vehicle on the same
policy, some insurance companies will offer you a discount on your
policy premiums. This discount can be as much as 10 percent an
excellent way to save money on your automobile insurance premiums
without having to do anything to obtain the savings.
New Business Transfer. Some companies, particularly those that
serve both the standard and nonstandard insurance markets, offer
discounts to applicants who currently have automobile insurance in
force with another company. The rationale behind this discount is that
if you currently have insurance through another company, you are
demonstrating a level of responsibility that suggests you are a better
risk than someone who does not possess automobile insurance. This
discount may help you save 5 to 10 percent on certain policy
Passive Restraints. Some vehicles feature shoulder belts, called
passive restraints, that automatically retract when the vehicle is
started, eliminating the chance that front seat drivers will forget to
fasten their safety belts. If your car has passive restraints, you may
be able to save 5 percent or more on certain coverages. Insurance
companies verify the presence of passive restraints via the VIN.
Paid in Full. Given the high cost of automobile insurance, many
policyholders prefer to pay their premiums in monthly or bimonthly
installments. Almost all insurance companies reward policyholders
who choose to pay the premiums for each policy term in full, by
offering a discount on policy premiums. An insurance company may
offer a 5 percent discount for policyholders who pay their entire
premiums at the beginning of each term.
VIN Etching. Some insurance companies offer discounts for VIN
etching, a process by which the Vehicle Identification Number is
etched onto each window of the vehicle. VIN etching is designed to
reduce the number of vehicle thefts and make stolen vehicles easier
to track down and recover. VIN etching is done on an aftermarket
basis, so you may need to submit proof that your vehicle has had all
its windows etched before you can receive this discount.
The more of these discounts you can qualify for, the greater your
premium savings will be. It is possible to save up to 50 percent on
your policy premiums just by taking advantage of discounts offered by
your insurance company.