Car insurance discounts are one several ways you could lower the cost of your auto policy. But many consumers don’t ask about these discounts because they don’t even know they exist. That’s where we come in. This article provides an A-to-Z list of the different types of car insurance discounts offered by insurers.
Note: This list is not exhaustive, but it does cover most of the common discounts that are available today. Be sure to ask your insurance provider if they have others that are not included on this list. You’ll find some additional helpful notes below this list.
- Accident-free — Most providers offer some form of insurance discount for drivers who go a certain period of time without an accident that is their fault. The length of time will vary from one company to the next. Most require at least three years of continuous accident-free driving to qualify for the discount. Some companies will even double the discount if you can go twice the minimum number of years without an accident.
- Air bag — Most cars come equipped with air bags these days, at least on the driver’s side. And a lot of providers offer car insurance discounts for this added safety feature. In some cases, they will offer a level-one discount for air bags on the driver’s side only, and a larger incentive for protection on both the driver and passenger sides of the vehicle. You might save up to 25% on your insurance policy if you have this feature (not to mention the life-saving potential it brings).
- Anti-lock brakes — This is another safety feature that could result in a car insurance discount on your policy. Most new cars come with anti-lock braking systems standard. Older cars typically lack this features. Your annual premium might be reduced by 5% – 10% for this feature, as long as it’s factory-installed.
- Anti-theft system — Insurance companies pay a lot of money each year to cover stolen vehicles. So it makes sense they would offer a discount for anti-theft devices. I’ve seen discounts ranging from 5% – 15% for this feature. Generally, a more effective security system will result in a bigger insurance discount. For example, a factory-installed system with multiple layers of security will be worth more than a $99 aftermarket “horn honker” that you installed yourself.
- Automatic withdrawal — If you set up an automatic payment plan for your car insurance premium, you might receive a discount for it. Your provider might have a proprietary name for this, such as “EZ Pay.” Or they might just call it auto payment or withdrawal. It makes their life easier, because they don’t have to chase down as many missed payments. So they are often willing to reward you in the form of a car insurance discount. The amount will vary. I’ve seen some companies offer a 5% discount for these types of payment plans.
- Car pooling — Some insurance companies will offer a discount for customers who participate in some kind of ride-sharing / car-pool program. I could not find any mention of this on the websites of the “majors,” but I did see it on quite a few of the smaller companies. So it’s worth asking about, particularly if you are using a local provider.
- Conviction-free — This is similar to the accident-free discount mentioned earlier. In this case, you could qualify for a car insurance discount if you go a certain number of years without a moving violation. This means you have a squeaky clean record for several years continuously. Here again, the magic number is usually three years. No speeding tickets, no DUIs, etc. This is typically the biggest discount offered by insurers. I’ve seen them offer 40% reductions for clean driving records. So make sure you ask about this one.
- Daytime running lights (DRL) — Yet another safety feature that could save you money. Most providers have some form of discount for DRLs, though the amount varies quite a bit. It’s usually on the lower end of the scale, like in the 3% range. Still, it saves you money. The key to all of this is that auto insurance discounts can add up. Even the smaller ones are worth pursuing, especially when combined with something more significant like the safe-driver discounts.
- Defensive driving course — Have you taken a defensive driving course for some reason? If so, you might score another discount on your annual premium. This is different from a state-required driver training course. This is a specialized program that focuses on defensive driving and accident avoidance. Courses typically run 4 – 8 weeks. They are offered by DMV and private companies, though some insurers only offer insurance discounts for the DMV program.
- Driver training / education — Some companies still offer discounts for students who take a basic driver’s education course through their school. Many states require these programs before a driver can be licensed. So it’s an added perk for doing something you have to do anyway.
- Farm vehicle — If you use your vehicle primarily for farm / ranch work (such as a special work truck), you might qualify for yet another car insurance discount. Statistically speaking, farm-use vehicles are involved in far fewer accidents than highway drivers. So there’s less risk for the insurer. Less risk = lower insurance premium.
- Federal employee — Some insurance companies offer a discount to federal employees, active or retired. I saw this on the Geico website, and also on dozens of smaller providers’ websites. Savings could add up to 5% – 7% on your annual premium.
- First-accident allowance — This isn’t so much a car insurance discount, as a promise that your premium won’t go up. It’s also referred to as accident forgiveness (that’s what Nationwide, Allstate and Progressive call it). Here’s how it works: If you go a certain period of time without an accident, you won’t be charged any extra for your first accident. This is significant, because an accident where you’re at fault could otherwise raise your premium by 30% or more.
- Full payment — Pay your entire annual premium at one time, instead of monthly, and your insurer might give you another insurance discount. At the time this article was written, Progressive and Allstate offered this on their websites. Quite a few smaller / local companies offer it, as well. You might save up to 10% with this type of discount.
- Good driver — This is similar to the accident-free car insurance discount mentioned earlier. But different companies use different terminology, so I wanted to include both terms on the list for the sake of completeness. You’ll also see them referred to as safe-driver discounts. A “safe” driver can be defined in several ways. In some cases, it means you must not have any violation points on your license, for a certain period of time. It may also mean that you have never been the at-fault driver in an accident that injured or killed another person.
- Good student — Students who receive good grades in school may qualify for another discount on their auto insurance. This can be helpful, because teenagers usually pay a higher premium anyway. So every little bit helps. Nearly every provider offers this incentive. The bar is usually set at a ‘B’ average or better. Some companies may offer additional discounts for straight-A students.
- Long-term — This one applies to drivers who have been with the same insurer for a long period of time. Call your company and ask them if they have a long-term customer discount. Check the website too. Most of them advertise these perks on their websites. The amount saved will range from 5% – 20%, depending on which company you use.
- Low-mileage — Do you only use your car to drive to work and back? Do you work from home and have fairly low mileage every month? If so, you might qualify for a mileage discount. Progressive was the only one of the big-five companies that mentioned this on their website. That doesn’t mean the others don’t offer it. It just means I couldn’t find any information about it. Many local providers will offer mileage discounts, as well
- Mature driver — Sometimes this is used interchangeably with “senior” discounts. In other cases, a company will offer both of these discounts with slightly different requirements. Some companies put this age group into a separate bracket, between 50 and 55 years old. Others refer to a mature / senior driver as anyone 55 or older. Some states even offer a mature driver course (sort of like a remedial driver’s ed) through which you can obtain car insurance discounts.
- Military — Sometimes this will be lumped under the federal employee discount mentioned earlier. In other cases, the provider will offer two different discounts — one for federal employees, such as postal workers, and another for military members. The military discount is usually the greater of the two, when they are split into separate categories. Geico advertises a savings of up to 15% for service members. Military members should also get quotes from USAA, a company that specializes in insurance for service members. I used them when I was in the Navy, and my policy was dirt cheap. Those were the days!
- Multi-car — Most insurers will give you a car insurance discount when you add vehicles onto an existing policy. This is one of the most common customer-loyalty incentives. Annual premium reductions of 15% – 25% are common.
- Multi-policy — Similar to the item above, this is when you have different types of policies with the same company. For example, if you have homeowners and auto coverage with the same provider, they will likely offer a reduction of some kind. It’s another type of customer loyalty program. Most insurers have some version of the multi-policy discount.
- Non-smoker — Smoking while driving is dangerous. According to Dr. Ron Borland of the VicHealth Centre for Tobacco Control, “there is a well-known association between smoking and road accidents.” As a result, some car insurance companies will give you a break for being a non-smoker. Sometimes the rule applies to the driver only. In other cases, they will require the entire family to be non-smoking. On the Farmers website, for instance, they state that the discount only applies when “all resident members of the household have not smoked tobacco products for the past 2 years.”
- Partnering organizations — If you belong to an organization that has partnered with a particular insurance provider, you will probably qualify for a discount just for being a member. Examples include credit unions, alumni associations, professional organizations, etc. Ask your insurer for a list of organizations they partner with. As far as the majors go, Geico seems to partner with the most organizations. They have a list of them on their website.
- Passive-restraint system — This is a factory-installed system that combines air bags with motorized seat belts (the kind that automatically strap you in when you close the door). If your car has both of these features installed, you may qualify for another discount.
- Policy renewal — Keeping an existing customer is a lot easier than finding a new customer. This is Business 101. That’s why a lot of companies will offer a renewal discount when you reach the end of your policy period. I recommend that you pretend you’re not sure about renewing, and that you might shop around first. Then, ask your agent what other discounts he might be willing to offer if you renew. This is the point when you have the most negotiating power.
- Seniors — See the entry for “mature driver” above. The age requirement varies for this car insurance discount. I have seen 50 and up, as well as 55 and up. Additionally, some companies have a stipulation that states you cannot have any younger drivers on your policy. Again, the exact details vary from one insurer to the next.
This list is fairly comprehensive. To create this list, I visited the websites of all the major insurance providers in the U.S. — Geico, Progressive, Allstate, Nationwide, State Farm and Farmers. I researched the different types of auto insurance discounts they offered, and then made a “master list” based on those findings. So it’s unlikely you will find a single company that is willing to offer every discount on this list. At the same time, there may be other policy incentives available that aren’t covered above.
[See also: How to lower your insurance premium]
How to Find the Insurance Discounts
Tip: Call your present insurer without giving them your name, and tell you are shopping for a new insurance policy on your car. Ask them what kind of car insurance discounts they offer.
Reputable companies will generally list their discounts on their websites, along with the amount you could save. When researching this article, I found such a list on the websites of Allstate, Geico and Nationwide. State Farm had a list of car insurance discounts, but they did not indicate the amount of potential savings (like the other companies did).
Do you have an existing auto insurance policy? If so, you should ask your provider if you qualify for any car insurance discounts. If you’re shopping for a new policy, you should obtain a list of discounts (along with the potential for savings) from every company you are considering. After all, one company might come in with a higher quote but a lot of discounts, while another company has a lower premium but fewer discounts. You might actually save money by going with the first company, if the reductions lower your premium below the amount offered by the second company. Find out what you qualify for and do the math, before you choose a policy.
Disclaimer: This article mentions several companies by name, along with the types of discounts they might offer on auto insurance policies. These findings are based on research conducted in the course of writing the article. It may not reflect the current offerings of these insurers. I make no claims, assertions or guarantees about the services offered by these companies.