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How to Cut Your Car Insurance Premiums

Some discounts are automatic, but for others you have to ask.

What kind of discounts do car insurance companies offer, and how do I make sure I’m getting credit for all of the breaks I deserve?

You’ll get some auto insurance discounts automatically, such as a break for adding another type of insurance with the same company (such as homeowners, renters or life insurance, which typically earns you a 5% to 20% discount), or a 15% to 25% break if you haven’t had an at-fault accident for three years or more. But you may have to tell your insurer that you qualify for other breaks. Get a list of discounts, and let your insurer or agent know if you meet the criteria for any of them. Many insurers list discounts on their website (including State Farm and Allstate), although the specifics can vary by state. Some states, such as Michigan, list insurers’ discounts in their car insurance buyers’ guides. See the State & Jurisdictions map at NAIC.org for links to your state’s insurance department.

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If you have a young driver on your policy, for example, and she is getting good grades, let your insurance company know. You may be able to save up to 25% if she has a B average or better in high school or college; some insurers also look at class rank. (State Farm’s discount lasts until children reach age 25.) And tell your insurer if your child took a driver’s education class; that could be worth a break of up to 10%. Also let your insurer know if your child moves away to college and doesn’t take a car. Your rates may drop, but your child will still have coverage if she uses the car when she is home during vacations and holidays. Allstate, for example, offers a break of up to 35% if your child moves at least 100 miles away from home for school and doesn’t take a car.

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Tell your insurance company if you switch jobs. Farmers Insurance gives discounts of 10% to 15% to members of certain occupations, such as educators, attorneys, accountants, physicians and law-enforcement personnel. You may also get a break if you have a shorter commute, switch to public transportation or join a carpool. Retirees age 55 and older can get a discount of up to 10% from Allstate.

Taking a few extra steps may save you money, too. For example, drivers age 55 and older who take a defensive driving course can get a discount of 5% to 15%. State Farm offers a 15% discount for drivers younger than age 25 who participate in the company’s Steer Clear driver-safety program and have had no at-fault accidents or moving violations during the past three years. Many insurers offer a discount if you sign up for paperless billing or if you pay your premiums in a lump sum rather than monthly.

Consider participating in a data-tracking program, such as Progressive’s Snapshot, Allstate’s Drivewise or State Farm’s Drive Safe & Save, if you don’t drive a lot of miles and practice safe driving habits. You could save 5% to 50% on premiums. With these programs, you plug a device into your car (or use your smartphone) so the company can monitor your driving habits. Your rate is based on your mileage, how often you drive late at night, and practices such as hard braking and rapid acceleration. You may get a break just for signing up for the program.

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