The average American will spend almost $100,000 on car insurance during their lifetime. Some of those costs are fixed, meaning there’s very little a consumer can do to change them. Young, inexperienced drivers will usually pay significantly more for auto insurance. Historically unsafe drivers or those with a host of traffic tickets will also pay more. Seniors, too, find themselves paying higher car insurance premiums in their golden years.
But no matter your age or driving history, there are a few ways you can save on car insurance. Read on to learn about typical car insurance discounts and other ways to save.
The Most Popular Car Insurance Discounts of 2021 – Insurance “Bundles.”
Multi-line discounts – “bundles” – are popular among most major car and property insurance companies. You’ll see them advertised on TV and online. Think of them as a company marketing trick you can use to your advantage if you have more than one line of insurance.
The idea is that by grouping all your personal lines of insurance with one company, you’ll save money. You’ll see most advertising relating to car and home insurance discounts. But you don’t need to be a homeowner to take advantage of this car insurance discount. You can try to combine any other personal lines of insurance.
Common Personal Lines to Bundle
In insurance-speak, the term “personal lines” describes common types of insurance a regular consumer would need. Among others, these include:
- Auto insurance
- Homeowner’s insurance
- Renter’s insurance
- Life Insurance
- Motorcycle insurance
- Boat insurance
- Recreational vehicle insurance
- Umbrella policies
- Stand-alone liability policies
So, even if you’re not a homeowner, you can still bundle your renter’s insurance with car insurance or your boat and motorcycle policies with your car insurance for a discount.
- Health insurance is also a personal line, but it’s a different animal – a huge one – and it’s not usually part of the bundling agreement in 2021.
To shop insurance bundles, gather all your paperwork. You’ll need your mortgage paperwork / rental agreement, your VINs, your driver’s license information and so on. Contact several different insurance companies and explain that you’re looking for a bundle discount. They’ll take your information and get back to you with a quote. Just be sure you’re comparing “apples to apples,” the cheapest insurance quotes aren’t always the best options.
Advantages and Disadvantages of Bundle Arrangements
1. Car insurance bundle discounts will save you 5% – 15% across all policies.
Most bundle arrangements will save you money, at least in the beginning. Insurers DO lure new customers with ultra-low premiums and then slowly inch up their rates over time, even if you’re a great customer who always pays on time and has zero claims!
2. It’s nice to work with one insurance company.
Some bundled customers also like to deal with a single insurance company. It means fewer phone numbers to remember, and it can be comforting to deal with a single agent who truly understands your needs. The agent relationship is significant to some clients!
3. But it will be frustrating to “un-bundle” later.
Eventually, you may find yourself looking for new insurance – at no fault of your own! Californians, for instance, have experienced severe fire damages in recent years thanks to droughts and the population boom. In 2018 alone, insurers paid $11.4 billion in fire claims.
It followed that in 2019, several insurance companies non-renewed their clients and pulled out of California entirely, or at least out of high-risk zip codes. Their bundled customers were left scrambling for property insurance elsewhere, while their car insurance discount for the bundle was lost, too.
Therefore, if you’re in a wildfire risk zone or coastal zone prone to windstorms, move forward with this insurance discount thoughtfully.
There are other car insurance discounts one can achieve through various insurers.
Vocational Car Insurance Discounts for Professionals
Some insurance companies offer discounts to certain professionals. For example, while we do not speak for Farmers Insurance, our research indicates that Farmers offers car insurance discounts for:
- Registered nurses
- Teachers, professors and educators
- Real estate agents
- And others
Every insurer is different, though. So be sure to talk about your career when getting a quote. It might be worth a 5% discount on your car insurance!
Another discount many people don’t know about is called an “affinity discount.” This can be worth another 5% off your insurance bill.
Affinity Car Insurance Discounts
Affinity car insurance discounts vary from one insurer to the next. The concept is like a vocational discount above. The difference is that insurers choose whatever “affinity” they like and offer a discount there. Examples would include fraternity and sorority members, professional organization members, travel club or dining club members and the like.
But even if you’re not affiliated with a fraternity or a club, you can still get car insurance discounts for taking some driver’s education courses.
Car Insurance Discounts for Driver’s Education
Car insurance companies prefer to insure safe drivers. It makes sense: safe drivers will pay premiums on time, year after year, without accidents, tickets or claims – so insurance companies make the most money with them.
If you want to save another 5% to 10% on your car insurance, try taking a driver’s education course. Again, we don’t speak for any insurance company with this article. But as a rule, they’ll be glad to give you a discount on your auto insurance after you complete a defensive drivers course, a senior drivers course, or a young driver class at school.
A 10% discount can be a lot of money to insurance companies, especially when insuring young drivers. You may find the insurer chooses to apply this discount slowly over a few years. They may give you a 3% discount the first year, a 6% discount the second year, and 10% after that – if you remain accident / ticket-free.
And you might need to re-certify every few years. This is standard for senior driving courses, which will likely need to be renewed every five years to maintain your car insurance discount.
Ultimately, $100,000 over a lifetime is a lot to spend on car insurance. Take advantage of every car insurance discount you can over your lifetime. The savings will add up to thousands of dollars!