5 Ways to Save on Car Insurance You May Be Missing Out On
The average American pays $1,311 a year for car insurance, according to Insure.com. Rates vary widely by state, from a high of $2,476 in Michigan to a low of $805 in Maine. No matter where you live, you probably wish auto insurance ate up a little less of your monthly budget. Fortunately, there are ways to cut your car insurance premium, though many Americans aren’t bothering to seek out those savings. Eighty-four percent of drivers haven’t asked their insurer whether they’re eligible for common discounts, like those for safe driving or being a good student, a recent survey by InsuranceQuotes.com found. Young drivers are the least likely to seek out extra savings, with just 7% having asked whether they’re eligible for any discounts.
“These discounts can add up to hundreds of dollars per year, and in many cases, they reward people for things they were already doing,” said Laura Adams, insuranceQuotes.com’s senior analyst.
Requesting these discounts is usually a fairly simple process, but it requires drivers to be proactive. While some savings are automatic, like those for buying homeowners and car insurance from the same carrier or having a safe driving record, you’ll have to contact your insurer and ask if other discounts are available. But that extra effort may be worth it if it results in substantial savings.
Here are five situations that could qualify you for a lower auto insurance rate.
1. You’re a good student
Many car insurance companies offer a discount for students who do well in school, but most people don’t bother to ask for it. Only 20% of people have sought out good student discounts, including 21% of millennials, according to InsuranceQuotes.com.
To get a good student discount, an insured driver typically needs to be between the ages of 15 and 24, a full-time high school or college student, and maintain at least a “B” average. How much you’ll save depends on where you live and your gender. An analysis by NerdWallet found that men benefited more than women from this discount (though they also pay more on average for insurance), and that drivers in Los Angeles saved more than those in Houston (20% vs. 6%).
2. You’re driving less than you used to
Cutting the miles you put on your car every year can mean big savings. People who drive 5,000 miles a year pay roughly 8.4% less for insurance than those who drive 15,000 miles a year, the InsuranceQuotes.com research found.
If you’ve moved closer to work or recently started working from home, be sure to let your insurer know. Depending on where you live, the discount you receive could be far greater than 8%. In California, drivers who went from driving 15,000 miles a year to 5,000 saved an average of 25% on their premiums, while drivers in Washington, D.C., who did the same saw an average reduction of 11.2%.
In some states, however, the discount is virtually non-existent. North Carolinians didn’t receive any discounts for driving less, while in Utah the average savings was a paltry 1.2%.
3. You got married
Married people pay less for car insurance, but few people bother to let their provider know that they got hitched. Only 13% of people let their insurance company know that they got married, according to the results to the InsuranceQuotes.com survey.
The younger you are when you get married, the more you’ll save on premiums. A married 20-year-old will pay 21% less than his single friend. But a married 30-year-old saves a mere 2% compared to a single person of the same age.
4. You took a defensive driving class
Taking a defensive driving class could shave a few dollars off your car insurance premium. GEICO offers up to a 5% discount for completing a defensive driving class. State Farm, Allstate, and other carriers offer similar discounts. Some insurers only offer the discounts to drivers older than 50, while others make them available to anyone who completes a program. In New York, any driver who completes an approved defensive driving course is eligible to receive a 10% discount on their insurance premiums for three years.
5. You have a certain job
People who do certain jobs tend to be safer drivers than others, yet just 8% of Americans have asked their insurer if their occupation qualifies them for a discount. Nurses, accountants, and teachers are among the careers that may translate into lower rates. Dentists, librarians, members of the military, and police and firefighters may also qualify for discounts, depending on their carrier, according to a report by Insurance.com.
Because the list of occupations that are eligible for a discount is broad, it pays to ask if you qualify, even if it seems unlikely. In some cases, just having a bachelor’s degree in a certain field is enough to get you a discount, even if you have an unrelated job. AAA Insurance offers discounts to people with bachelor’s degrees in nuclear engineering, astronomy, geology, and other subjects, for example.