My Finances Today — It’s a strange thing about auto insurance discounts: Providers love to offer them, but drivers are loath to take them.
In fact, only 16% of Americans have asked their auto insurance company for rate discounts, according to InsuranceQuotes.com, and those insurance discounts can be lucrative:
- Someone who drives 5,000 miles annually pays 8% less than someone who drives 15,000 miles each year, and that average savings is much higher in some states (in California, it’s 25%).
- Insurance companies also charge less to married people, but only 13% of Americans have let their insurance carrier know that they tied the knot.
Other commonly missed discounts are for good students and people who work in certain fields (like teachers, nurses and accountants).
“These discounts can add up to hundreds of dollars per year, and in many cases, they reward people for things they were already doing,” says Laura Adams, InsuranceQuotes.com’s senior analyst. “We encourage everyone to be proactive and seek potential discounts at least once a year; it should only take a few minutes.”
Other discounts often stem from how many cars you own, or where you work every weekday morning. “If you don’t primarily use your car for commuting to and from work, you could save a considerable amount on your insurance bill each month,” says Joshua Dziabiak, chief operating officer at The Zebra, an auto insurance publication. “You can also save on multi-car discounts, where the fine print can be interesting. Sometimes it can be beneficial to partner up on car insurance with your new spouse, for example, or sometimes it can save you money to exclude a young driver or someone with a spotty accident history.”
Industry professionals advise working with a dependable insurance agent who can steer you to the best discounts without you having to ask. “From my vantage point, I don’t think consumers should have to ever ask for a discount; if they have to do that, they are working with the wrong people,” says Eric Kossian, an insurance underwriting specialist in Leavenworth, Wash. “But a good agent will ask you the questions to get all the discounts you can.”
Don’t overlook timing, either, especially with early shopping discounts available. “If you’re considering switching auto insurance providers, don’t wait until your current policy is about to expire before shopping,” advises Sam Belden, vice president of carrier development at Coverhound.com, a California insurance comparison site. “Many companies give ‘early shopper discounts’ to customers that get a quote between three and eight days before their current policy is set to expire.”
“These discounts can range anywhere from 2% to 10% of your premium, depending on the provider and how early you shop,” Belden says.
— Written by Brian O’Connell for MainStreet
