By Kimberly Lankford
Kiplinger's Money Power
9:30 AM EDT, September 30, 2013
Q. You always tell people to take advantage of discounts that can lower their car insurance premiums. What are some of the most common ones?
A. The discounts can vary a lot by company and state. Bankrate.com just surveyed the 10 largest auto insurance companies about their discounts, and some of the breaks are surprising. Ask about available discounts when you're shopping around for coverage or if you're planning to buy a new car.
You'll generally get a discount if your auto and homeowners or renters insurance is with the same company, and you may get an additional discount on all of your policies for adding umbrella coverage. Most (but not all) insurers give you a discount for insuring more than one car or for remaining accident-free for a certain number of years (Geico offers a discount of up to 26 percent for five years without an accident).
Most insurers also give a discount for having certain kinds of anti-theft protections (such as car alarms, ignition cutoff switches or VIN etchings), anti-lock brakes and special safety features, such as motorized seat belts. A few insurers, including Farmers and Travelers, offer discounts for hybrids or alternative-fuel vehicles. You usually get a discount for low mileage, and you may get an even bigger one for installing data-tracking technology; discounts range from 10 percent to 30 percent for installing a tool that tracks the time of day you drive, your mileage, and acceleration and braking rates.
You may get a break for taking a defensive driver course (although some insurers offer these discounts only to senior drivers or teenagers). If your child is a full-time student, maintaining at least a B average in high school or college, a discount of about 15 percent is typical. Most insurers give you a discount if your child moves more than 100 miles away from home for college and doesn't take a car, but the insurer will still provide coverage while your child is home for vacations.
Your occupation can make a difference. Several insurers offer discounts for members of the military, and some have special breaks for certain jobs (such as teachers) or members of certain groups (such as alumni associations). And the way you pay can make a difference: Most of the insurers surveyed offer a discount for paying your premium in a lump sum rather than monthly, and for paperless billing and automatic payments.
Kimberly Lankford is a contributing editor to Kiplinger's Personal Finance magazine and the author of Ask Kim for Money Smart Solutions (Kaplan, $18.95).
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