Policy discounts
Policy discounts can lower your car insurance costs, though these types of discounts vary across the industry compared to vehicle-based and driving-based discounts. For instance, some insurance companies may offer a discount for getting a car insurance quote online prior to your next term, while others may offer customers a small discount when they opt for paperless communication.
Many companies offer at least one discount related to the different ways you can bundle an insurance company’s financial products, such as having multiple vehicles under one policy or combining an auto policy with a homeowners insurance policy.[1]
Bundling discount
A bundling discount is one of the most common car insurance discounts. It may be referred to as a “multi-line” or “multi-product” discount, but these all refer to taking out multiple insurance products from the same company, such as a home insurance policy and an auto insurance policy. Most insurance companies that sell multiple products offer a bundling discount.
Loyalty discount
Loyalty discounts are just that: discounts awarded to longtime policyholders when they remain with an insurance company for a set number of years. This discount incentivizes you to continue renewing your policy.
Unfortunately, some car insurance companies may engage in a practice called price optimization, which offers you a discount but raises your rates in a way that nullifies it. For instance, a 20% rate increase with only a 10% discount. That’s why it’s important to compare quotes to see which insurer can offer the lowest premium possible, and to ensure you’re getting every discount you qualify for.
Paid-in-full discount
Paid-in-full discounts usually require you to pay for your entire policy term up front in one lump sum to receive the discount.
Multi-car discount
You can earn a multi-car discount when you have more than one vehicle on the same policy. Some insurers may categorize this under a “multi-product” or “multi-line” bundle, while others have a separate discount specifically for multiple vehicles on one policy.
Early bird discount
The early bird discount involves getting a free quote and purchasing a policy from a new insurer before your active policy at a competitor ends. The designated timeframe for the discount is generally within five days of policy expiration.
Paperless discount
You typically earn a paperless discount when you opt out of correspondence by U.S. mail and instead receive all communications about your auto policy digitally.
