Who Has the Best Car Insurance Discounts?
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UPDATED: Mar 13, 2020
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Car insurance is one of the most competitive industries. Because everyone needs insurance and can only have one company at a time, insurance companies must compete to take business away from other insurers. Insurers compete in many ways, including offering exemplary service, but the main way that insurance companies attract new business is by offering discounts.
Because car insurance is an expense that cannot be avoided, most people are eager to save money on their premiums. Getting the lowest price on car insurance helps reduce the overall cost of car ownership, and even small discounts can add up over a person’s lifetime as an insured.
Although all insurance companies offer discounts, not all discounts are created equally. Different insurers target different populations of drivers, and the discounts they provide will be better for certain people. For example, The Hartford insurance company caters to senior citizens, and its discount program caters to older drivers because of it. On the other hand, companies like Geico and Esurance cater to young, tech-savvy drivers.
Some companies with very tight niches are able to offer better discounts than others. For example, USAA services only customers with military careers and their families. Other companies are larger and service a wider variety of customers, which makes the overall number of discounts higher but the amount of savings potentially lower.
Depending on your age, gender, type of car you drive and other factors, you might get substantially better rates from one company than another thanks to these discounts. This is one reason why it’s a good idea to get quotes and consider changing your coverage every few years. This is also why you should always get a personalized quote rather than basing decisions on a friend’s rates; your own rates could be much different.
What Types of Discounts Are Available?
No matter what insurance company you purchase your policy from, certain discounts will always be available. All insurers generally offer these discounts, but some companies will reduce the bill more or less than others. If you’re not offered one of these discounts but believe you qualify, be sure to ask what it would take to get it:
- Good Student Discounts
- Safe Driver Discounts
- Low Mileage Discounts
- Multi-Policy Discounts
- Driver’s Education Discounts
- Anti-Theft Device Discount
- Marriage Discount, Good Credit Discount and other Life Status Discounts
Additionally, many companies are now offering usage-based auto insurance that monitors your driving habits and bases rates on your annual mileage and behaviors. As these programs gain in popularity, more insurers may begin offering them.
In addition to discounts, which lower the cost of your policy, some insurance companies offer additional benefits that will have other effects. For example, some companies like Allstate and Nationwide offer a vanishing deductible program and accident forgiveness. Progressive was the first company to offer pet injury protection, but some companies have begun offering that in recent years to stay competitive. In addition to looking at the cost of your policy, be sure to check for these additional perks to get a clear idea of the policy’s value.
What Company Has the Best Discounts?
Although there is no such thing as a single “best” insurance company, some companies do offer better discount terms. For example, the usage-based auto policy from State Farm provides an average savings of 5%, whereas the usage-based policy from Allstate offers a 30% discount.
Some companies also offer exclusive discounts. For example, Esurance is the first auto insurance company to offer a marriage discount to same-sex couples in civil unions. Esurance also provides a discount to single parents. On the other side of the spectrum, companies like Geico and USAA offer military and government employee discounts, and The Hartford offers discounts to members of AARP.
These exclusive discounts do not necessarily stay exclusive for long. Because insurance is so competitive, insurance companies often begin copying each other and offering similar products and services. If you got a quote from an insurance company a few years ago, the figure may be very different now due to this harsh competition.
Applicable discounts are generally calculated into your price when you obtain a quote from an insurance company. Further discounts can be added to your policy after purchase in some cases. If you’re looking for the best price on auto insurance, it may pay to find a company that offers discounts to your specific demographic. This will keep your cost of coverage low and help match you with the company that most wants to provide coverage.