Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Apr 13, 2022

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Key takeaways...

  • Multi-policy discounts can save you hundreds of dollars every year
  • Earning good grades can also lower your monthly premium
  • Insurance companies also offer discounts for good credit and a positive driving history

The most common auto insurance discount is the multiple-policy discount. It is a familiar discount offered by most car insurance companies. It allows you to save money by insuring multiple things with one company.

Because car insurance is mandatory in most states, it is nice to be able to save money when possible.

Although the multiple policy discount is a popular discount, there are a number of other discounts available as well.

Discounts help you save money on your insurance premiums and they can be given for a wide variety of reasons, from being a good driver to having good grades in school.

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How to Receive Auto Insurance Discounts

If you start with a new provider, your agent will often inform you of the different discounts for which you are eligible, based on the information you have given him or her.

If you are currently with an insurance company, contact your agent or another representative and inquire about any discounts that are offered that would pertain to you.

The best time to ask about discounts is when you have a change in your life or driving history. Sometimes you will be eligible for certain discounts that you weren’t previously.

In fact, it is a good idea to do a review of your car insurance policy every year and that would be the perfect time to ask about available discounts.

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Multiple Policy Discount

Insurance is necessary in order for you to protect your assets. Car insurance is one of the most popular types of insurance because of the sheer number of drivers on the road and the potential for damage and injuries.

Other valuable assets in your life should also be covered by insurance.

If you own a home, it is imperative to purchase homeowners insurance in order to protect your belongings and your investment in case of fire, vandalism, tornados, and other incidents.

Even if you rent, renters insurance is important to have and is often required by the landlord.

The most common discount for multiple policies is the combining of car and homeowners insurance.

Insurance companies would like to earn as much of your business as possible and will usually reward you by offering a percentage off of your policies to do so.

When you insure both your home and car with the same provider, you can often save up to 15 percent.

Other insurance policies that can be combined with your vehicle to receive the discount are life insurance, boat insurance, or other recreational vehicle insurance.

You also receive a discount when you insure more than one vehicle with the same company.

Good Student Discount

According to the Insurance Information Institute, teenage drivers are in the highest risk category for car insurance rates.

If you are a teen driver or you have one in your household, you probably know firsthand just how much insurance companies charge to insure these young drivers.

Statistics have shown that students who are responsible in the classroom tend to be more responsible on the road. This means fewer accidents and fewer claims.

To reward students, many insurance companies offer a discount for those who get good grades.

Known as the good student discount, it applies to students whose grade point average falls at or above a “B” average, or a 3.0. It is worth spending a little more time studying to save more money on your insurance premiums.

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Vehicle Safety Discount

Insurance companies will often reward you for having certain safety features in your vehicle. This is because, the safer your vehicle is, the less chance there is for an accident.

Having fewer accidents means filing fewer claims.

In the event that there is an accident, safety features reduce the amount and severity of bodily injuries, which also saves the insurance companies money.

According to the National Highway Traffic Safety Administration, anti-lock brakes are instrumental in preventing accidents, especially in less-than-ideal weather conditions.

Because they help with directional control and stability of the vehicle and reduce the distance it takes to stop, many providers will give you a discount if your vehicle has them.

Other safety features include:

  • Airbags
  • Traction control
  • Certain types of headlights

Newer vehicles tend to have more of the safety features that are required to take advantage of the discount.

If you are in the market to purchase a new vehicle, the Safer Car website publishes vehicles that have received 5-star safety ratings, which is the highest rating you can receive for safety.

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Safe Driver Discounts

Along with having safety features in your car, driving safely yourself can earn you discounts. Many insurance companies will decrease your premium if you go for a certain amount of time without being in an accident.

Some companies offer the discount after three years of being accident-free, while with others it is five years. This good driver discount can save you almost 25 percent off of your premium.

Some car insurance companies will offer a discount if you have taken a course for defensive driving.

This course teaches you what to look out for on the road and how to minimize accident risk.

Not all companies offer this discount, so ask around. Even if your insurance provider does not offer this particular discount, it may save you money down the road; especially if you have had a less than perfect driving history.

Alternatives to Discounts for Saving Money

If you have taken advantage of as many discounts offered by your car insurance company as possible, or if you are ineligible for any discounts, there are still ways to save money on your insurance policy.

One way to save money is to shop around for a different policy.

If you feel that you are paying more for your car insurance than you should be, there may be a different company that can fit your budget.

You can do an online search that will allow you to get multiple quotes on one site, which will save you quite a bit of time.

When searching for a new car insurance company, make sure you do some research so that you are going with a good company. Check with companies such as Standard and Poor’s to see how each insurance company ranks financially.

Choose a company who rates highly, with an “A” rating or higher.

If you choose to switch car insurance companies, make sure that you keep your current policy in place until your new policy is in effect.

Having any type of gap in your insurance coverage–even one day–will usually cause your insurance rates to increase. Once your new policy is in effect, your other one will refund the premium that you had paid during any overlap.

Another way to save money is to change your coverage.

If you have been carrying full coverage on your vehicle and it is older and paid off, you may be able to get by without having coverage such as comprehensive or collision.

You may also want to increase the deductible that you pay. Your premium is inversely related to your deductible amount.

If you have a lower deductible, your premium will be higher, and it will be lower if your deductible is higher.

You can do other things that will decrease your insurance premium over time.

Because your driving history and credit history are determinants of what you will pay, you can be conscious of your actions going forward.

Working to build up your credit score is a way to save money on your car insurance. Having good credit is also rewarded with insurance discounts.

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