5 Auto Insurance Reductions You Most likely By no means Heard Of – Yahoo Finance
5 Auto Insurance Discounts You Probably Never Heard Of
Auto insurance is an expensive necessity, and while drivers enjoyed brief discounts at the start of the pandemic, the respite was short-lived.
Several insurers have already increased their tariffs again, increasing the average premium to $ 1,450 per year, according to the quote comparison site SmartFinancial.
Do you need a break that lasts? You probably already know a few ways to lower your tariffs, such as: For example, reducing your mileage or installing a device to monitor your driving habits.
However, insurers use an incredibly wide range of information to determine your premiums – and that means there are many potential discounts that you may not be aware of.
1. The fun or farmer's discount
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Available from companies such as Allstate, American Family, Progressive, Amica, Liberty Mutual, Nationwide, and State Farm.
Typical car insurance policies are designed for commuters. The expectation is that you will likely be spending a lot of time on the road in busy conditions.
However, if you only use your vehicle for special occasions, leisurely Sunday trips and occasional errands, you can activate a "pleasure use" discount.
You can get a similar discount just using your vehicle for towing or moving around a farm. You are much less likely to have an accident and you will not travel long distances, which will reduce wear and tear.
Depending on your insurer, the rebate can range from a few dollars a year to more than $ 300. So it's worth looking around.
If you are claiming an amusement or farm discount, do not drive the vehicle to work without notifying your insurer. Your claim could be denied if you are involved in an accident. You may also need to sign up for driver monitoring technology that tracks your mileage.
2. The good student discount
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Available from companies such as State Farm, Farmers, American Family, USAA, Allstate, Travelers, Nationwide, Progressive, Amica, and Liberty Mutual.
Not only scholarships bring good grades. Most major insurance carriers offer student discounts that can be up to 25%.
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To qualify, most insurance companies require you to be between the ages of 16 and 24 and enrolled in a high school or college full-time. You will typically need to maintain a B-Average or Grade Average of 3.0 or better, or be in the top 20% of your class.
You can also qualify by completing your school's honor roll or dean's list.
What about after graduation? Some insurance companies offer additional discounts to individuals with advanced degrees, such as a Masters or PhD, as they are statistically less likely to make a claim.
And don't forget that you can get discounts while your children are in school if they are insured in your vehicle. In general, they must be under 25, live at least 100 miles from home, and only have access to your car during school holidays.
3. The marriage discount
Available from companies such as USAA, Progressive, and Allstate.
If you have commitment anxiety, this may convince you to tie the knot.
Even if your spouse doesn't drive a car or you don't aggregate your coverage, married drivers save an average of $ 123 a year on auto insurance, according to LendingTree's ValuePenguin site. That's around 5% of a typical policy.
Many insurers see married couples as less risky than single people in terms of driving behavior and financial stability. (They're also more likely to buy home insurance or life insurance, so insurers are likely to be happy to keep their business.)
The use of non-driving factors to set motor insurance rates remains controversial. The federal government is currently investigating the practice, and laws like Proposition 103 in California have limited their effects in a few areas.
4. The home ownership discount
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Available from companies like State Farm, Allstate, Amica, Travelers, Nationwide, Progressive, Farmers, and Liberty Mutual.
Most homeowners know that you can benefit from a discount on multiple policies by bundling your home and auto insurance policies with the same company.
However, many auto insurers give homeowners a discount even if you can find a better deal for your home insurance elsewhere and not bundle with them.
Auto insurance discounts for home ownership can be substantial. A 2016 study by the Consumer Federation of America found that renters paid, on average, up to 47% more for auto insurance than homeowners.
And your home can affect your car insurance rates in other ways. If your car is at low risk of theft or vandalism due to the location of your home, or if your home has a garage where you can safely park your vehicle, you can get discounts on that too.
If you are still renting, keep in mind that mortgage rates are at all-time lows and prices are unlikely to be falling anytime soon.
5. The discount for high credit
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Available from companies like State Farm, Farmers, American Family, Travelers, Progressive, Nationwide, and Allstate.
The three little numbers that make up your credit score affect a lot more than your interest rates.
High creditworthiness can also lead to lower premiums, as various studies – including one from the Federal Trade Commission – have found that your creditworthiness can effectively predict your likelihood of making a car insurance claim.
Some states, including California, Hawaii, Massachusetts, and Michigan, prohibit or restrict the use of credit scores to determine insurance rates. Other regions, including Virginia and the District of Columbia, have passed laws guaranteeing companies lower interest rates on good loans when they take them out on low loans.
Most states, however, allow insurers to use credit-based insurance scores. As with a standard FICO score, it takes into account your payment history, debt level, credit history, number of recent applications, and the mix of credit types.
Bad credit can more than double your insurance rates, says ValuePenguin, while those with excellent credit can pay up to 24% less than those with average credit. Because of this, it pays to make sure that your creditworthiness is in excellent shape.
How to get these and other discounts
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These are just a few of the many discounts available, but remember: not all discounts are offered by every insurer in every state, and they are not all automatic. You have to call and ask.
That said, if your current insurer doesn't offer you a deal, it may be time to look elsewhere.
It's good practice to review your policies every six months and look for the best rates and coverage. The same applies to your household and health insurance.
Different insurers use very different calculations to determine your premiums. Cheaper isn't always better when a policy doesn't miss out on critical coverage – but if you don't take the effort to compare, you can overpay as much as $ 1,000 a year for the same protection.
This article is for information only and is not intended as advice. It is provided without any guarantee.