Generally, anyone looking to buy a car insurance policy has one single objective in mind. To pick the policy having the lowest price. Now, it’s a good habit to look out for cheap car insurance but the approach is not quite right, as the cheapest policy might not be the one which fits your requirements. There are a lot of factors which come into picture when the insurer is calculating your car insurance rates. As per the recently conducted survey on state-wise car ownership cost by the average annual spend on car insurance by an individual is $762.To know about various car insurance discounts we need to have a clear understanding of these factors. Read through to check the discounts for which you may qualify. The discounts vary in each state.
How Much You Drive – Discount On Annual Mileage and
If you’re a less frequent driver covering less than 7,500 miles annually (this is approx. mileage which can vary) then you may qualify for the annual mileage credit. If you are not a regular driver, then you may want to look at usage based car insurance options. The concept is simple. Lesser you drive, lesser are your chances of being involved in an accidents. Hence, you would pay discounted premium compared to someone who uses his car for daily commute to work. Using annual mileage credit discount you can save around $85 annually, considering the average spend of $762 on car insurance. Individuals who travel less miles (15 or 20 miles) to work can save up to 3% to 4%. Few companies also offer discounts on the number of days you drive per week.
Location Based Car Insurance Discounts
Many individuals believe that more than the miles you drive, your place of residence is far more important in deciding your discounted car insurance rates. Someone who lives in a farm and uses his vehicle to drive around will surely be given a discounted rate as the chances of accidents are minimal. Let us consider another example. An individual living in the state of Louisiana drives 50 miles daily from suburbs to the city at his work place. To reduce his commuting time he rents a flat which is hardly 200 yards from his office. After doing this, his insurance rates almost doubled. The reason being, the place you drive makes a big impact on your car insurance rates. Although he was driving less, covering lesser miles, he was still paying more due to higher risk of accidents. I specially chose Louisiana, as the accident rates are the highest here. So as we see the place where you live has a bigger impact than less driving. Hence each state has different car insurance rates. Accidents play a major role on premiums.
Being A Loyal Customer For Your Car Insurance Company –
A lot of insurers offer advance renewal discounts (also known as loyalty credits) on car insurance if you renew your policy well in advance. Generally within a month. Savings could be upto 8% to 10% and you may end up saving around $60 annually. Now before you renew your policy, please do some research and check if the discount is worth it. What I mean here is that the renewal rate offered to you is the best in the market. Many changes take place in our personal lives and in the industry as well which can increase your premiums. An example would be change in your marital status or you may be eligible for a senior discount due to age. Also keep in mind, that you can change your policy limits and coverage options anytime. If this results in lower premium then you are entitled for a refund.
Homeowners Can Avail Car Insurance Discount
If you own a home then your favorite living abode can be a discount ticket on your car insurance. People who own their homes exude stability for car insurance companies. Owning a home relates to responsibility and responsible people are less likely to cause an accident. Homeowners can also avail further discounts if they insure their home from the same company who is providing car insurance. This is called multi policy or multi-line discounts. For homeowners savings can be upto 6% to 7%. Following the multi policy discount, you can save up to $30 annually if you have a life insurance and car insurance policy with the same insurance provider.
Using Electronic Mode Of Payment Calls For A Discount
Insurance companies love clients who pay their premiums on time and more importantly in full amount. The best way to do this is to opt for electronic fund transfer or direct debit. Savings can be around 4% to 5% on an annual basis.
Car Insurance Discount On Car Ownership
If you own your car then you may get around 4% discount. There are companies offering discounts on car ownership.
Car Insurance Discounts On Educational Qualification
Well, it’s true. Not many companies offer this type of discount but there are few who does. Depending on your qualification, a bachelor’s degree, masters or a doctorate can save you around 4% on an annual basis on your car insurance premium.
Public Transits Car Insurance Discounts
You own a car but at the same time use public transport to commute then you can save money on your premium. Some car insurance companies offer this if you can produce 11 months of commuter passes and if you use your own vehicle less than 10 days in a month.
All car insurance discounts mentioned above might not be available with one insurer hence it is important to compare and gather price information, discounts availability and coverage options from as many companies as you can in your area. Our exclusive engine will help you to find the best car insurance quote at the most affordable price.