If you are looking to save on Car Insurance, one way to reduce your rates is to apply for discounts offered by your provider. Not all discounts are created equal, though, which means that while one Discount may save you hundreds of dollars, another discount may only save you a few dollars.
So if you want to learn the answers to common questions like “Does taking drivers ed online lower insurance?” or “Are driving device apps worth it?,” read on. We will cover these questions and more as we discuss the top five discounts for saving money.
#1 – Discount for a Driving App
A number of insurers now offer driving apps that can be downloaded onto your smartphone. Examples are Geico’s DriveEasy app, Farmers’ Signal® app, or State Farm’s Drive Safe & Save™ app.
Driving apps like these promise to save drivers a significant amount. If you get the full discount for your perfect driving, you can often save over 20 percent on your insurance.
Because of the savings drivers can amass on these driving apps, they are a popular choice for most providers. However, there are a few things to keep in mind before signing up for your insurer’s driving app program:
- Read the fine print of the driving app – Make sure your insurer doesn’t increase rates for bad driving. Instead, it should be that the worst that can happen is you don’t earn a discount.
- Read reviews about the app – Because many driving apps are new, make sure that there are no major glitches or inconsistencies in data recording that can mess with your discount.
Since you can expect a driving app to drain your cell phone battery faster, plugging your smartphone into a car charger will ensure your battery lasts.
In addition, while driving apps are a great way to earn a high discount, they are not yet offered at every insurer or in every state, so make sure you ask an insurer before signing up if they have an app and which states it is actually available in.
#2 – Safe Driver Discount
The safe driver discount, also known as the claim-free discount, is another discount that can save you a significant amount on insurance rates. The general rule of thumb is that drivers must be accident-free and ticket-free at their current insurer for a pre-specified number of years (usually three years).
Generally, the safe-driver discount saves the driver around 20 percent. However, in addition to this discount, some insurers offer an accident forgiveness plan for safe drivers who have been claim-free for a number of years.
With an accident forgiveness plan, the insurer forgives drivers for their first at-fault accident. Accident forgiveness means rates won’t go up, so qualifying for a safe driver or claim-free discount means drivers save much more than 20 percent in the long run.
#3 – Low Mileage Discount
With this discount, the less you drive means the more you save. If you have a short commute to work or are working from home, tell your insurer. A low mileage discount can earn drivers anywhere from 10 to 20 percent off their policy.
In fact, because of the 2020 Coronavirus pandemic, a number of insurers are offering significant discounts to customers who are stuck at home and driving less. So one of the best tips for budgeting during a crisis is to record your vehicle mileage and update your policy accordingly to start saving.
#4 – Family Plan Discount
Family plan discounts usually consist of both multiple driver discounts and multiple car discounts, both of which save at least 10 percent and make creating a successful family finance plan easier. If you are adding a new teenager to your policy or adding another car, it is best to keep everyone on one policy rather than having separate insurers.
Some insurers also allow drivers that live at the same residence to combine policies, even if they aren’t related. For example, some insurance providers offer policies for roommates or engaged couples. So if you are sharing a residence or a car with someone, consider combining policies to earn a discount.
#5 – New Vehicle Discount
Splurging on a newer vehicle can actually help you save on car insurance. New vehicle discounts can range from 10 to 15 percent, depending on the insurer. Of course, your new vehicle will have to meet a few criteria to qualify for the highest discount possible.
Some of these criteria are:
- Advanced safety features – The more safety features your new car has, such as backup cameras or lane departure warnings, the bigger the discount.
- Great safety ratings – If your car has poor crash test ratings, it won’t matter how many safety features it has, your discount just won’t be as high.
So when shopping for a new car, make sure you consider safety features and crash test ratings. Doing so will ensure you get the highest discount possible for new vehicles.
Plus, upgrading your vehicle will keep you safer by preventing crashes and better protecting you if you do end up in a crash.
Other Ways to Save Money on Car Insurance
If the top five discounts still aren’t saving you enough, there are a few other tricks you can try.
- Increase deductibles – Increasing your deductible will lower rates, but only increase your deductible if you can afford to pay the higher deductible after a car crash.
- Drop add-on coverages – With the exception of liability, collision, and comprehensive insurance, add-on coverages like roadside assistance can be dropped.
- Apply for small discounts – Even if going paperless or signing up for autopay may only save one percent, these tiny discounts can add up.
- Shop for insurance rates – See if another insurer has a better deal on car insurance rates in your area by getting free quotes. However, make sure to avoid the trap of sacrificing quality for the price.
By taking advantage of the top five discounts and following our other tips, you can make car insurance affordable again.
If you want to cut back costs on other expenses, make sure to check out other tips for saving money on everyday expenses to save on all the pricey bills in your life.
Rachel Bodine is an insurance expert who writes and researches for the car insurance comparison site, CarInsuranceComparison.com .
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