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Auto Insurance Discounts - Key to Cheap Insurance Rates
What
types of discounts are available?
Most auto
insurance companies offer a variety of discounts that can save you money
on premiums. All the discounts that a particular company might offer may
not be available in all states. If you think you might qualify for any
of the discounts mentioned here, make sure you check with your insurance
company to determine if it's available in your state.
Following is a list
of possible types of discounts offered by insurers. Note that discount
types, amounts, and qualification requirements can vary between different
insurance companies. State laws can also affect coverage options and discount
availability.
Accident-free
Discount - Available to drivers who have no at-fault accidents
over a specified period of time, usually about three years. If an accident
occurs later, the insurance company may remove the discount, increase
rates, and begin a new qualification time period for the insured.
New Car
Discount - Available for new cars that have never been titled.
Qualification rules may vary.
Economy
Car Discount - Available for certain economy vehicles. Qualification
rules may vary.
Good Driver
Discount - Available to drivers with good driving records,
no at-fault accidents, and no traffic offenses within a specified time
period, usually about three years.
Defensive
Driving Course Discount - Available to drivers who complete
a certified defensive driving course within a specified time period.
Drivers
Education Course Discount - Available to drivers who complete
a drivers training course with a qualified instructor. This discount
is typically restricted to young or new drivers.
Good Student
Discount - Available to students and graduates under age 25
who have attained a specified level of scholastic achievement. Home-schooled
students may also qualify.
Multiple
Automobile Discount - Available if two or more insured vehicles
are driven by multiple related people living at the same address.
Multiple
Policy Discount - Available if the insured has other types
of insurance with the same company, such as home owner's or life insurance.
Safety/Anti-Theft
Equipment Discount - Available for vehicles that have certain
specified safety equipment, anti-theft equipment, or have specified
safety ratings.
Senior Discount
- Available to those who qualify as a senior adult. Retirement status
may provide additional discount.
Farm Discount
- Available for vehicles primarily used on farms.
Deductibles
Increasing the deductible
on your auto policy can save you money. However, make sure that you can
afford to pay that amount in case of an accident. Many people unwisely
maximize their deductible, even though they can't afford to pay it after
an accident, betting that an accident won't happen, or that any accident
will be the other person's fault. This is not generally a good strategy.
However, if you take the money you save in premiums by setting a higher
deductible, and tuck the money away each month in a savings account, you
may be able to cover the higher cost of an accident, especially if your
accident occurs months after you begin you savings plan. Furthermore,
if you never have an accident, the money is still yours, not the insurance
company's.
Other
factors that affect your auto insurance rates
Credit score
- Most insurance companies now use your credit score as one of the means
of determining what you pay for your coverage. However, scores created
by insurance companies are often not the same as normal FICO scores.
Methods for creating scores vary by company. The reason for using credit
scores is that have been studies showing a correlation between certain
credit factors and the number of claims a customer is likely to submit.
You should know your
FICOŽ credit score 
before you begin shopping for insurance.
Where you
live - Drivers who live in less populated rural areas will
pay much less for insurance than someone who lives in New York City
where the risk of accidents and theft are higher.
Your age
- Statistics show that young drivers have more accidents than older,
more experienced drivers. Insurance companies base rates on those statistics.
Your sex
- Male drivers pay higher premiums than females, again because statistical
show that males have more accidents and file more claims.
Your marital
status - Married drivers pay less than single drivers. Married
people tend to be older, more experienced, and more stable.
Your job
status - People with steady jobs, or attend school, tend to
pay less due to a more predictable and stable lifestyle.
Where you
drive - You will pay more if you drive long distances on busy
streets or highways in high-accident areas, or if you park your car
in high-theft areas.
Your vehicle
make/model - Studies show that certain vehicles are involved
in accidents or thefts more often than other vehicles. Some vehicles
are more expensive to repair than other vehicles. Expensive vehicles
cost more to replace than less expensive vehicles. All these factors
affect car insurance rates.
Your driving
record - You will pay more if you have numerous driving violations
or at-fault accidents. Even accidents for which you are not at fault
can affect your rates because it indicates you may be driving in a high-accident
area.
Your claims
record - Submitting claims typically increases your insurance
rate. Some companies now offer "forgiveness" plans that overlook
a small number of accidents and claims. These policies cost more. Don't
submit claims unless the cost is significantly more than your deductible.
Get free rate
quotes online
Free online rate quotes are easily available on the Internet. You can
easily compare costs and coverage. Some companies such as GEICO sell insurance
directly from their web site. Other companies such as Insurance.com
 are
brokers who sell polices from well-known national insurers, and help you
get the best rates. Here are our recommendations:
Insurance.com
GEICO 
21st
Century Insurance Company
InsureMe
NetQuote
 Kanetix
- free car insurance quotes from over 30 Canadian insurers.
Additional
information
Additional
information about auto insurance can be found in the following articles:
- Auto
Insurance for Beginners
- Buying
Auto Insurance - Agent or Direct?
- Car
Insurance and Leasing
 For
more, see LeaseGuide.com
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