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To drive a vehicle on public roads, almost every state requires drives to have some form of car insurance.
But do you have to pay full price for it? Car insurance discounts could be available to you based on various factors — you just need to know where to look.
Car insurance premium rates are regulated by state governments based on standard risk factors, including age, years of driving experience, type of vehicle driven and where it is parked. However, insurance discounts must be applied equally to all drivers and must not unfairly discriminate against policyholders. This includes any discounts that you may qualify for. Depending on your age, how long you’ve been driving, your driving record and organizations you belong to, you could be eligible for car insurance discounts you didn’t even know existed.
As you shop for car insurance, always ask companies what discounts they offer. Let’s look at how your initial car insurance quote is created — and the types of car insurance discounts that may help you lower that quote or shop for a better one.
- How are car insurance quotes determined?
- Can you get discounts on car insurance?
- What are the best insurance discounts?
How are car insurance quotes determined?
Understanding the different factors that determine your car insurance rate can help you figure out what discounts you might be able to get.
Your driving record is an important factor insurance companies consider when setting your rate. They want to know how likely it is that you’ll get into a car accident, and past driving behavior is an important indicator of future results.
As you begin shopping around and comparing car insurance rates, you give companies permission to look at your motor vehicle report, which may include any accidents and moving violations over the last three to five years.
Simply put: Good drivers may get rewarded with discount car insurance.
Here are some other factors that could affect your car insurance quote.
- Age — Insurers equate age to driving experience. The theory is that the longer you’ve been driving, the less likely you are to get into a car accident — and insurers base that on statistics: The fatal crash rate per mile driven for 16- to 19-year-old-drivers is significantly higher than for drivers 20 and older, according to 2018 data from the Insurance Institute for Highway Safety.
- How you use your car — From the insurer’s standpoint, the more you’re on the road, the greater the chance you’ll be involved in an accident — whether it’s your fault or not. If you have a long commute to work or put a lot of other miles on your car, your car insurance premium may be higher.
- Where you live — You could be the safest driver in the world, but if you live in a city with a lot of traffic (which increases the chance of an accident) or increased theft rates, you could pay more than someone who drives the same vehicle in a remote, rural area.
- What kind of car you drive — Premiums may also go up if you have a newer car, an expensive car, a vehicle that’s commonly stolen or a vehicle with fewer safety features.
- How much insurance you want to buy — One of the few auto insurance rate factors in your control is how much insurance you intend to buy. If you decide to purchase insurance with lower deductibles or higher maximum benefits, your price will go up. On the other hand, coverage with higher deductibles or state-minimum benefits could reduce your payment. The goal is to balance how much you can afford to pay if your car gets in an accident with your insurance benefits and price.
Does my credit score affect my car insurance price?
It depends on which state you live in. In most states, your credit score could affect how much you pay for your premium. If you live in California, Hawaii, Massachusetts, Michigan or Washington state, auto insurance companies can’t use your credit score when establishing your premium. But insurance companies are limited on how they can use your credit score when determining your rate in Oregon, Maryland and Utah, for example.
Can you get discounts on car insurance?
In many situations, yes — car insurance discounts are available to policyholders. But you can only leverage the ones you’re eligible for.
When you’re shopping for car insurance, check on an insurance company’s discount page to see what’s offered, or speak to an insurance agent to find out if you may qualify for any discounts.
Here are a few of the discounts that some of the larger car insurance companies in the U.S. may offer — policies and availability of programs can vary by state.
|Multi-policy: Policyholders save an average of 5% when they combine their auto and home insurance policies.||Vehicle equipment: Your insurance premium could go down based on your safety equipment, including airbags, anti-theft systems and daytime running lamps.||Accident or violation free: If you remain accident free and don’t have any moving violations, you could qualify for discount car insurance.|
|Homeowner: Progressive policyholders get an average savings of nearly 10% for owning a home.||Good driving history and habits: Geico offers discounts of up to 22% for drivers who have been accident-free for five years and potential discounts on certain portions of your premium if you and your passengers always wear seat belts.||Multi-policy discount: If you insure multiple cars with Liberty Mutual or have multiple policies (like home and auto), you may be able to get additional discounts.|
|Continuous insurance: Progressive offers a discount based on how long you’ve been insured, regardless of the companies.||Driver affiliation: Members of the U.S. military, federal employees and individuals belonging to one of 500+ groups may all qualify for additional discounts.||Advanced safety features: Does your car have electronic stability control, adaptive headlights or an anti-theft device? You could get a discount.|
|Quote and sign online: When you get a quote and sign your documents online with Progressive, you could save an average of 7% or 9%, respectively, on your premium.||Education discounts: If you take a defensive driving course, or if your driving student has a good academic record, you could get a discount.||Payment discounts: By buying online, paying in full or entering a preferred payment discount, Liberty Mutual offers additional discounts.|
|Snapshot Safe Driving App: With usage-based insurance tracking through Progressive’s app, you could save money based on how you drive.||Customer loyalty: Geico also offers discounts for policyholders who insure their car and home together, or who insure more than one vehicle with the company.||RightTrack program discount: If you agree to enroll in Liberty Mutual’s driver tracking program, you could save up to 30% on your insurance based on your good driving habits.|
What are the best insurance discounts?
When it comes to car insurance policy discounts, it’s all about fit. If you’re not a full-time student or don’t have a child studying full time, a good-student discount won’t work for you.
But there are a number of common car insurance discounts that apply to a wide range of drivers.
Be sure to ask your insurance company about these common savings opportunities.
One of the most common car insurance discounts is the multi-policy option. Insurers want their customers to insure all of their major items with the company, and multi-policy discounts encourage this.
The selling points of bundled policies are that they save time — simplifying your insurance billing with a single company — and money. For example, a number of insurers advertise savings for multi-car coverage and discounts of around 20% to 25% when you bundle home and auto coverage. Some insurers also have options for bundling auto or motorcycle insurance with renters insurance.
Safe-driver and accident-free discounts
Safe-driver discounts can be easier to qualify for — eligibility is partially in the driver’s control. If you keep a clean record and aren’t involved in an accident for a certain period of time — typically three to five years — insurance companies may be able to give you safe-driver or accident-free discounts.
Safety feature discounts
If you’re driving a newer vehicle with top safety features — including airbags, anti-lock brakes, daytime running lights, an anti-theft system or lane departure technology — you could qualify for discount car insurance. Your discount may vary based on how many features your car has.
When you go shopping for discount car insurance, don’t just compare companies by their initial rate quotes. Look at what discounts they offer too — you could save even more.
If you’re unsure about whether a certain discount applies to you, you can always ask the insurance company. Let them know about your vehicle’s safety features, any organizations you might be a part of (like an alumni organization, employer group, professional organization or trade union) or if you’ve completed any defensive-driving courses.
And even if you’re not looking for a new car insurance company, it doesn’t hurt to explore these discounts with your current provider. If you’ve joined a discount-eligible group, moved to a less populated area or are commuting less since you first bought your policy, you could get a discount car insurance plan. Share these updates with your current insurer and see if you could bring your premium down.