Getting cheaper car insurance is not just a way to save money; it can change the way you drive and the way you think about your vehicle. There are many ways to get car insurance discounts. But if you’re serious about saving money on car insurance, you might find a few surprising benefits that improve your overall finances and everyday life.
Let’s look at what happens when you harness the power of car insurance discounts.
1. Your overall insurance costs get cheaper
The biggest benefit of car insurance discounts is that they help you save money on your monthly payments. One of the most commonly used ways to reduce car insurance costs is with bundling, also known as multi-policy discounts. Bundling your insurance policies can help you save an average of 5% to 25% on the total cost of coverage.
When you combine your homeowners insurance, auto insurance, and other insurance policies with one insurance company, you are likely to get a significant discount on the full cost of all your insurance. That’s because insurers always want to sell more insurance to existing customers. They want to be your main provider of insurance, and they tend to reward loyal customers. If your insurance company can get more of your business and insure more aspects of your life, it’s likely to give you a bigger discount.
2. You might become a safer driver
Car insurance companies often give special discounts for safe drivers. This gives you an extra incentive to go slow and be careful behind the wheel. Some companies like Erie Auto Insurance offer a diminishing deductible for each year you can go without filing a claim. The better you drive, the more money you save!
But of course, accidents happen. In case you’ve had a recent fender bender, ask your insurance company if you can take a defensive driving course to earn a discount. Some companies also offer driver safety courses for young drivers, like the Steer Clear® safe driving program from State Farm — when you finish the course, you can qualify for a discount on car insurance.
Read more: check out our picks for the best car insurance companies
Car insurance companies are in the business of fixing cars and helping people recover after collisions and car accidents. If they can help you drive safer, and avoid getting into crashes in the first place, that’s a win-win for everyone — and they’re willing to share their savings with car insurance discounts.
3. You might drive less
One big trend in recent years with the pandemic and the rise of working from home is that many people are discovering that they’re not driving as often as they used to. If you work from home, live in a walkable neighborhood, and don’t have kids who constantly need to be shuttled to school, sports, and activities, you might feel as if you’re paying too much for car insurance.
Instead of being stuck with a fixed monthly rate for car insurance, what if you could pay only for what you need? Several auto insurance companies now offer pay-per-mile car insurance. This type of insurance can be 30%-50% cheaper than traditional premiums. Pay-per-mile insurance also gives you an incentive to drive fewer miles — and that can reduce your total cost of car ownership. Driving less can help you spend less money on gas and maintenance, as well as reducing depreciation and lengthening the life of your vehicle.
At their best, car insurance companies are in business to help you manage risks and save money. They protect you from financial catastrophe and painful out-of-pocket costs. Car insurance discounts can incentivize you to change your mindset about driving, to get creative about your insurance policies, and think strategically about what insurance is the right fit for your life. You might find that car insurance discounts can nudge your driving habits and personal finances in a safer, healthier, and more prosperous direction.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.