Discount auto insurance

Perhaps you assume that rates are similar among car insurance companies, and that there's no need to shop around for the best price. However, buying a policy without researching your options first could be an expensive mistake.  There are ways to find discount auto insurance.

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Taking advantage of discounts that many auto insurance companies offer can significantly reduce the cost of car insurance and help you find discount auto insurance. Understanding the factors that impact auto insurance premiums can help you make better decisions about your coverage—and possibly save some money in the process.

Most auto insurance discounts fall into one of three categories. Knowing the categories and using these tips will help you identify possible discounts that could help you save on auto insurance.

Auto Insurance Discounts

Policy Discounts:

• Bundling—Most car insurance companies offer multi-policy and multi-vehicle discounts. Consolidating policies—by purchasing homeowners and car insurance from the same company, for example—offers convenience and can save both time and money.
• Payment discounts—Some companies offer discounts for full payment instead of monthly payment and for payments using Electronic Funds Transfer (EFT). In addition, a few companies offer discounts for e-signatures and paperless billing.
• Early shopping or renewal discounts—An easy way to earn a quick discount is to shop 2 weeks before your policy's renewal date, because some companies give early shopping discounts. But, be sure to compare rates carefully with your current policy, as you may earn a discount for continuing to renew your policy.
• Coverages and deductibles—Selecting appropriate coverages and deductibles isn't necessarily a discount, but it's a good way to save money. If you own an older car, it may not be necessary or cost-effective to buy collision and comprehensive coverage. If the book value of a car is close to a coverage's deductible, it may make sense to drop that coverage. Another way to lower a premium is to select a higher deductible. The money saved annually could be significant.

Vehicle-related Discounts:

• Safety and security—Many auto insurance companies reward drivers of safe and secure cars with discounts. Anti-lock brakes and airbags make your car and its occupants safer and can earn you a discount. Likewise, anti-theft and vehicle recovery systems make your car less likely to be stolen or easier to recover, and many companies offer a discount when you have comprehensive coverage. In addition, monitoring devices like Safeco's Safety Beacon™ ensure that your vehicle is driven safely, which is always worth a discount.
• Car type—A few insurance companies offer discounts for hybrid cars. Even if you don't own a hybrid, the type of car you drive can affect how much you pay for car insurance. Insurance companies assign a rating to every car model based on their expectation of collision, injury and theft claims, among other factors. The safer and more secure the car, the more you can reduce your premium. Conversely, an unsafe pickup truck or oft-stolen sports car can significantly raise your premium.

Driver Discounts:

• Driving record—A clean driving record can generally save money on car insurance, and many companies also offer specific discounts for safe drivers.
• Driver responsibility—Some insurance companies offer discounts to policyholders who complete a defensive driving class, driver improvement course, or accident avoidance class. In addition, drivers who are homeowners, good students, older drivers, or college educated can often earn discounts.
• Associations—Members of clubs like AAA, professional associations, and certain occupations are often eligible for auto insurance discounts.
• Low Mileage discounts—Many car insurance companies offer discounts for low yearly mileage. If you use public transportation often or participate in a carpool, your vehicle probably has lower annual mileage than normal, which may qualify you for a discount. In addition, members of the military and students living away from home frequently earn discounts because they use their cars less.

There are many ways to save on your coverage, even beyond these discounts. Knowing more about auto insurance policies and premiums can help you take advantage of discounts and savings techniques while ensuring that you have the appropriate protection for your vehicles. For a list of the discounts offered by our car insurance partners, please read about our partner companies.

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Related topics:

• Cheap car insurance

• Affordable Auto Insurance

• Insurance agent

Originally posted September 17, 2004.