There are a plethora of discounts offered by insurance companies. In many cases these discounts can save shoppers hundreds on auto and home insurance. However, there are certain occasions where it may be best to avoid buying a policy that entices you with a discount.
Two Car Policy Discount
You would think this discount is a given. Yes we have two vehicles in our household – why wouldn’t we insure them with the same company? In most cases you’re right. However, in some cases insuring one car with one company and another car with another may save you more money in the event the two drivers are not married and far apart in age. A good example would be a 45 year old daughter sharing her home with her 80 year old mother. The company that offers a low insurance rate for the daughter may charge an extremely high premium for the mother. Various insurance companies cater to different age groups and drivers.
Combined Auto & Home Discount
Most insurance companies are willing to offer significantly lower rates to customers who purchase a combined auto and home insurance policy. This discount to your auto policy may range anywhere from 5% to 15% when you agree to also insure your home with the same company. If you have a high auto premium it may be worth it; but what if you’re only paying $300 a year for your auto coverage? You may find yourself better off shopping around various home insurance companies. Just like auto insurance, quotes offered by home insurers often vary by hundreds.
The Future Effective Date
This particular discount isn’t discussed all that often. Although many people don’t know about it – the future effective discount does exist with several major insurance companies.
Here’s a quick outline showing how this discount works:
You have insurance which is set to renew in 30 days. Instead of waiting until the last minute to shop you can shop and compare quotes early with the new policy’s start date being the date your current policy expires. Once you find the company you like the most, you set it up with the company to have your coverage start on that future date. Although the future effective discount should apply automatically during the quote process – it never hurts to ask, “Will I get a discount for buying my policy in advance?”
I personally saved about $50 by purchasing my own policy several days prior to my renewal date. I basically made the first payment 1 month early and the 2nd payment 60 days later.
The Good Driver Discount
There’s not much room to question this discount, the good driver discount is one to shoot for. The better you drive the fewer headaches you’ll have to endure both physically and financially. You’d be amazed as to how inexpensive auto insurance can be when you have no traffic tickets or claims on your record. Insurance companies generally look five years into your history – some only look three. If you can successfully avoid tickets and claims for five years you will quickly learn how cheap insurance can really be.
Good Student Discount
This is another discount I can only encourage eligible drivers reach for. Statistically, young drivers with good grades were found to be in fewer accidents than drivers with lower GPAs. A high GPA expresses your level of responsibility and your will to learn. Insurance rates for younger drivers are already though the roof.
Anything we can do to help lower these rates is something to be considered. These discounts mainly apply to students still living at home. I remember years ago, as a young teen driver, I managed to pull my grades up high enough to earn this good student discount for my parents. My parents felt much better about me driving at 16. Being 16, I remember asking for a portion of the difference. The response from my dad was, “Nice Try”.
Always consider all the options available to you before you buy your next insurance policy. Don’t let yourself be sold on something that sounds good at the time. Commercials and Agents are great at selling the coverage you need and sometimes a little extra. Always consider what the Agent has to say but also consider your options. For the best results, always be sure to compare quotes from both Independent Agents and direct insurance companies. With a little bit of time, patience and discount knowledge you may be able to save several hundred on your next auto policy.
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Cole Sileven, owner of Low Insurance and Security, studies to find the best insurance solution for each type of driver. Sileven manages Low-insurance.org, a resource built to help shoppers compare insurance quotes between both local and national insurance companies.