Types of Car Insurance Discounts

One of the important aspects that you need to remember while purchasing car insurance is the discounts available. Not many people or car owners are aware of the different types of discounts and hence they are unable to save money on their auto insurance. The best person to inform you regarding the discounts available is the agent but you should not rely completely on them. You can take advice from friends and colleagues if they have insurance coverage for their car. Apart from that, you can always call the insurance companies directly and check with them.

These days most auto insurance companies provide discounts on insurance policies and this can help you to save quite a sum on your policy too. Understanding the various types of discounts and how they work or affect the annual premiums is something that you need to be aware of. So here are some of the most common and popular discounts offered by various car insurance companies in the US:

Safe Drivers
Safe drivers can get quite a discount because they pose a lesser risk to the insurance company. If you have a clean record with no claims or accidents then you can get a good discount. On the other hand if you already have a record of accidents or any previous claims then you will end up paying a higher premium. Here are some examples of types of safe driver discounts:

Three Years: If you have been driving safe and don’t have any accident on the record for the last three years and there are no moving violations too then you will qualify for a special auto insurance discount. The amount of discount varies from one company to another. There is one clause: In the three year period that is reviewed, you should have had standard liability insurance. But if you are a new driver and received your license within the last 3 years then also you will be eligible for this discount.

Five Years: There is a special discount for those drivers who have not had any traffic violations and accidents in almost 5 years. The eligibility criterion is the same as that of three years but the discount amount is higher.

Defensive Driver: If your age is 55 or even older and if you are the primary driver of the car that you want to insure then you can get a good discount on your annual premiums by simply getting an approved defensive-driving class. This class is not available in all the state and the rules can vary from one state to another.

Safe Cars
How safe your car is will also determine the amount of discount you can get on your car insurance premiums. Car safety is basically determined by the type and amount of safety devices installed in your car and how effective they are. Here are some of the requirements for discounts:

Anti-Lock Brakes: If your car has been factory-fitted with ABS (all-wheel, anti-lock braking system) then you can get a discount on your premiums.

Passive Restraint Systems: If your car is equipped with standard safety equipments like airbags and motorized seatbelts then you are eligible for this kind of a discount.

Anti-Theft Devices: This type of discount is applicable in some of the states and to be eligible your car need to have approved anti-theft devices.

Multiple Policy Discount
Multiple policy discounts is fairly common these days and you can avail of this if:

You have taken more than one car insurance from the same company
You have taken a car and home or any other insurance from the same company

Multi-policy discounts can lower your premiums by as much as 10%.