You may be able to cut your rate in half without giving up any coverage—but only if you know to ask.
Auto insurers offer a ton of discounts that can cut your premiums significantly, but the insurance company won’t automatically give them to you; you need to know to ask. The type and size of discounts varies a lot by company and state, and may only affect part of your policy. Ask your insurance company or agent about its discounts. Most insurers’ Web sites list available discounts, too—State Farm’s Web site even lets you search for the discounts specifically offered in your state (see Figure 1 for a list of common discounts).
Taking advantage of several discounts can be great, but don’t forget the bottom line: How much you’ll actually pay in premiums. Some companies may offer higher premiums but more discounts;
FIGURE 1 Common Auto Insurance Discounts
Taking advantage of every discount you deserve can lower your auto insurance rate by hundreds of dollars, without having to make any sacrifices. Discounts vary a lot from company to company and state to state, but here are some common ones:
■ Multiple policies—Having both auto and homeowners insurance with the same company can lower your premiums by 15 percent on both policies, making the discount twice as valuable as it looks at first.
■ Good driver—You may get up to a 20 percent discount if everyone on the policy hasn’t had an at-fault accident or moving violation in the past three or five years.
■ Low mileage—You may get a 5 percent to 10 percent discount if you drive fewer than 7,500 miles per year.
■ Good student—You may be able to save as much as 30 percent if your child has a B average or better or is in the top 20 percent of his or her class.
■ Driving course— Drivers age 55 and older may get a discount for completing a defensive driving or mature driver improvement course (the rules vary by state). Young drivers may receive discounts for participating in certain courses and programs, too.
■ Retiree discount—You may get a price break if you’re 55 or older and not employed.
■ Multicar discount—Having more than one car on the policy can cut your premiums by more than 10 percent.
• Safety devices—You may get a discount if your car has antilock brakes, air bags, automatic seat belts, and daytime running lights.
■ Antitheft devices—The type of alarm system you have can make a big difference in the size of the discount. Check with your insurance company before installing a new alarm system to make sure it qualifies for the discount.
■ Other discounts—You may also get a discount for carpooling, for staying with the same company for five years or more, or for buying coverage through your employer, professional, or alumni association.
Others may offer lower premiums to everyone but not as many discounts. When comparing companies, it’s most important to compare total costs.
