Maximize discounts to induce the most affordable automobile insurance

Maximize discounts to induce the most affordable automobile insurance

If you are buying automotive vehicle insurance, you are most likely seeing many insurers providing automobile insurance discounts. however however does one understand you are obtaining the largest bang for your buck?

"Hearing you'll get twenty five % off for Associate in Nursing anti-theft device and another twenty five % off for airbags will get you ramped up," says Penny Gusner, client analyst at Insure.com. however sadly that does not mean you are suddenly progressing to be paying 0.5 worth on your premiums if your automobile is outfitted with the most recent safety devices.

"Discounts are hardly ever off all of your coverages," Gusner says. "Instead, most apply to one or perhaps two types of coverage."

You also need to keep in mind that car insurance discounts vary from insurance company to insurance company and from state to state.

Learn what types of car insurance coverage your discount applies to
In all states, liability insurance typically comprises the largest portion of your auto insurance premium, according to the Insurance Information Institute. Nationally, liability insurance averaged $492 in 2011. Collision coverage averaged $286, while comprehensive coverage averaged $132.

That means getting a 10 percent discount on your liability insurance will save you more than a 10 percent discount on the comprehensive portion of your policy.


And auto insurance costs vary wildly from state to state. In 2011, New Jersey was the most expensive state, with the average auto insurance policy costing nearly $1,184. That was more than twice as expensive as in Idaho, which had the cheapest insurance, averaging $535.

The discount that applies to almost all your coverages is a good driver discount. "Being violation- and accident-free means a lot to car insurance companies," because there's less of a risk that you'll make a claim, Gusner says.

Other discounts that typically apply to all or most of your coverages include multipolicy discounts if you have more than one insurance policy with the same company, discounts for vehicles equipped with anti-lock brakes, and discounts for paying your policy in full and using electronic funds transfer to pay your bill, says Ratnesh Singh, a vice president at Quadrant Information Services, Inc.

With most other types of auto insurance discounts, you need to make sure that the discount matches up with the type of coverage you carry.

Gusner cautions that an airbag discount is usually taken off the medical payments or personal injury protection portion of your auto insurance, so if you don't have that kind of coverage, you won't be able to take advantage of the discount.

Many times, drivers will drop comprehensive and collision insurance on their older vehicles to save on their insurance premiums. So if your car has an anti-theft device, and you drop your comprehensive coverage, you'll lose that discount.

Sometimes car insurance discounts have caps on the amount
You also need to remember that your discounts only add up so high.

If you're eligible for two similar discounts, your insurer will typically give you the bigger of the two, Singh says. That means if your vehicle is equipped with both front airbags and side airbags, the side airbags generally will earn you a greater discount, and that's the discount you'll receive from your insurance company.

On its website, Auto-Owners Insurance states you can receive discounts for having an auto equipped with various safety features, including anti-lock brakes, airbags and anti-theft devices, but "vehicles equipped with more than one of these devices will receive the highest single auto discount applicable."

Because insurers limit the maximum amount you can receive in discounts, you might not get credit for all the discounts that you would be eligible for in theory, Gusner says.

Singh says it's not unusual for an auto insurance company to establish a minimum premium amount. So if the minimum premium is $500, for example, your discounts can't drop your premium below that amount, even if you would be eligible for more discounts.

And you should revisit the issue of discounts regularly. If you lose your good driver discount because you've received a ticket or been involved in an accident, ask your insurance company if you're eligible for other discounts. You might not have received them all previously because of the generous good driver discount you received from your insurer, Gusner says.

If you aren't maxed out, see how you can add to your discounts, such as by taking a defensive driving course or joining an organization that has an affiliation discount from your auto insurer.

Switching insurers may earn a new customer discount if it's not too late
If you're planning on comparison shopping for car insurance, get the most out of it by shopping early. If you shop and switch insurance company a week or two before your policy period ends, you can get a discount with some car insurance companies.

To make certain you can take advantage of this, don't wait until the last minute to shop around. Start about a month out from your renewal date. If that is before you get your renewal offer, that's fine because you can compare the rates you found when the notification comes in and you'll be ready to switch if you've found lower rates elsewhere.

American Family Insurance says its "Earlybird discount" is 5 to 10 percent. Esurance's "Switch and Save" offers a 5 percent discount. Farmers also offers an early shopping discount, but doesn't note the discount amount.