Every insurance company is different in how they price their rates for auto insurance. No more are the days that the cost of insurance for a specific vehicle is a certain price. Insurance companies have spent millions of dollars trying to perfect their underwriting criteria to enable them to give the best rates for their target customer, and they do this by lowering (discounting) their base rates with the discount factors discussed below.
That’s right, your auto insurance premiums can be impacted more by you and the following discount factors than what car you actually have. Not that some cars are not more to insure than others, but your driving history, insurance score, and combination of discounts offered will have the biggest impact on the amount you will end up paying.
Now you may see 10% off for safe driver, 10% off for autopay, 20% off for multi-policy, 10-20% off for Insurance Score, 20% off for Good Student, 10% off for Early Quote… but each insurance company has a cap on their discounts at some point and it’s probably in the 30 – 50% range.
… And I almost forgot. We represent over 12 auto insurance companies and not one company asks if the car is RED. So, I just don’t see the old saying that red cars are the most expensive to insure is accurate today.
What are the top insurance discounts in Arkansas?
There are a number of discounts and some are greater than others, but overall these are the top 15 discounts to be asking about when shopping your auto insurance.
This is possibly one, if not the most important factor insurance companies use in figuring your auto insurance rates. Every company does it a little different but essentially an insurance score is based of your credit history, claims history, and insurance history. These factors are used to compile a score that the insurance company uses to predict the probability of customers filing a claim.
Full Pay Discount
Most companies offer a generous discount for paying for the auto policy upfront, whether you have a 6-month or an annual policy.
Insurance companies prefer you pay with automatic payments either with EFT through your checking account or with a Credit or Debit card. People who setup autopay are more likely to keep their insurance in force. So, it’s typically a good discount but not as much as some companies offer for Full Pay.
Early Signing / Quote Discount
This one can be a little confusing, but essentially companies reward you if you get a quote (or some require you to bind your policy) so many days prior to the coverage becoming effective. Most companies are 7 days or more, but some companies increase the discount the sooner you switch up to 15 days prior. I guess the thought here is to entice you to go ahead and make the change, but they also probably have some data showing that people who don’t wait until the last minute are a preferred customer.
Safe Driver Discount
Safe driver discounts are typically based off a combination of your claims history and MVR (driving record) over the past several years. Depending on the insurance company they can look back anywhere from 3 to 5 years. Some insurance companies may split this up as “Claims Free” and “Incident Free” discounts but they are still factoring your rates on prior claim history and your driving record.
Multi Policy Discount
Companies loves to offer a bundle discount. Just like the internet and cable companies, insurance companies will reward you with package discounts for bundling your auto, home, life, umbrella, and sometimes recreational vehicles as well. The key here is that you will see a discount on each policy that you have with the same company.
Multi Vehicle Discount
This one is pretty self-explanatory… When you have more than one vehicle on an auto policy, you’ll get a multi-vehicle discount.
Insurance companies want customers that don’t jump from company to company each year and so they typically offer a tiered discount for the number of years you’ve been with your prior insurance company. The more years the higher the discount.
The higher your liability limits are with your previous insurance company the better the rates you will probably see if you are going auto insurance shopping. Insurance companies see customers that carry higher limits as insureds that value coverage and reward them. So, it can actually benefit you to have higher limits if there comes a time that you do switch insurance companies.
An example would be if all other factors are the same, an insured that carriers 100/300/100 limits with their prior carrier would most likely see better rates than the exact same scenario but they only have state minimum limits at 25/50/25.
Homeowners tend to see better auto insurance rates than renters. If you package your home and auto with an insurance company you will see even better rates, but most of the time you will get a discount just for owning a home.
Good Student Discount
Having teen drivers can be expensive, but for students with a 3.0 GPA or B average it’s not as bad. Insurance companies will discount the rate for the teen driver up to 20% for students that have good grades. Of course they’ll want to see proof, so be ready to email in a copy of your student’s transcripts.
Distant Student Discount
If you have a child that you have on your policy but they live away at school without a car, many insurance companies will give you a discount. It is typically when the child lives more than 100 miles away from home and are 22 or younger. Full time students away at school do not use the family vehicles as much and therefore insurance companies see them as a lesser risk for accidents.
You may be surprised by the discounts that are available for military, certain work professions, or even memberships that you may have. For example, in Arkansas Safeco offers a 10% Alumni discount if you graduated from a four-year college in Arkansas.
Low Mileage Discount
If you drive less, then it makes sense that you are less likely to get in an accident. That is why most insurance companies will reward you with a discount for driving under a certain number of miles per year.
Defensive Driver Discount
Most companies use this discount to reward teen drivers and drivers that are 55 and older. If you have taken a defensive driving course and have record to send in then you can get a discount for taking the course. You may want to ask an agent first for approved courses, because some insurance companies may have specific criteria for it to count.
Want to see how many Discounts you can get?