You’re likely paying more for insurance than necessary. Most insurers offer numerous discounts, but they rarely volunteer this information. Here are 15 ways to reduce your premiums right now.
Auto Insurance Discounts
1. Multi-Policy Bundle (15 to 25% savings) Combining your home and auto insurance with the same carrier typically provides the largest discount. Some insurers also allow bundling renters, umbrella, motorcycle, or boat insurance.
2. Good Driver Discount (20 to 30% savings) In California, this is mandatory for eligible drivers under Proposition 103. You qualify with no at-fault accidents or moving violations for three years and a valid license.
3. Defensive Driving Course (5 to 15% savings) Completing an approved defensive driving course can earn discounts. Some insurers require renewal every 3 years. Many courses are available online for under $30.
4. Low Mileage Discount (5 to 20% savings) If you drive fewer than 7,500 to 10,000 miles annually, you may qualify. With remote work becoming permanent for many, this discount is increasingly valuable. Some insurers now offer usage-based programs that track actual mileage.
5. Good Student Discount (10 to 25% savings) Students under 25 with a B average or better typically qualify. Some insurers accept Dean’s List, Honor Roll, or standardized test scores above certain thresholds.
6. Safety Features Discount (5 to 30% savings) Anti-lock brakes, airbags, anti-theft systems, and automatic emergency braking can all reduce premiums. Newer vehicles with advanced safety technology may qualify for substantial discounts.
7. Paid-in-Full Discount (5 to 10% savings) Paying your annual premium upfront instead of monthly installments eliminates financing fees and often earns an additional discount.
Homeowners Insurance Discounts
8. Security System Discount (10 to 20% savings) Monitored alarm systems that notify police, fire, or monitoring stations during emergencies qualify for significant discounts. Even non-monitored systems may earn smaller discounts.
9. New Home Discount (8 to 15% savings) Homes less than 10 years old often qualify for discounts because electrical, plumbing, and roofing systems are newer and less likely to fail.
10. Claims-Free Discount (10 to 25% savings) Going 3 to 5 years without filing a claim demonstrates lower risk. Some insurers increase this discount with each claim-free year.
11. Fire Protection Discount (5 to 15% savings) Fire extinguishers, smoke detectors, sprinkler systems, and fire-resistant roofing materials all qualify. Living near fire hydrants or fire stations may also reduce premiums.
12. Multi-Protection Discount (5 to 10% savings) Installing multiple safety features (like security system, fire protection, and water leak detection) can earn additional stacked discounts beyond individual feature discounts.
Universal Discounts
13. Automatic Payment Discount (2 to 5% savings) Setting up automatic payments from your bank account or credit card is easy and saves money. This also prevents accidental policy lapses from missed payments.
14. Paperless Discount (2 to 5% savings) Opting for electronic delivery of policies, bills, and documents reduces insurer costs, and they pass some savings to you.
15. Professional/Affinity Discounts (5 to 15% savings) Many insurers offer discounts for members of professional organizations, alumni associations, unions, or employer groups. Check if your employer has negotiated group insurance discounts.
Hidden Discounts Worth Asking About
Loyalty Discount: Some insurers reward long-term customers with gradually increasing discounts.
Mature Driver Discount: Drivers over 50 or 55 may qualify, especially if they complete senior driver courses.
Military Discount: Active duty, veterans, and family members often receive special rates.
Retired Discount: Retirees typically drive less and are home more (reducing burglary risk), qualifying for discounts on both auto and home insurance.
Association Memberships: AAA, AARP, and professional associations sometimes negotiate member discounts.
How to Maximize Your Savings
1. Ask Explicitly: Don’t assume your agent has applied all applicable discounts. Ask specifically which discounts you’re receiving and which others you might qualify for.
2. Update Your Situation: Life changes that could earn discounts include retirement, working from home, installing security systems, or completing advanced degrees. Proactively inform your insurer.
3. Shop Competitively: Insurers weight discounts differently. One company’s bundle discount might be 25% while another offers only 15%. Get quotes from multiple carriers to compare total costs.
4. Consider Investment Discounts: Some discounts require upfront costs (security systems, defensive driving courses), but they pay for themselves quickly through premium reductions.
5. Review Annually: Your discount eligibility changes as your situation evolves. Annual reviews ensure you’re capturing all available savings.
Discounts to Be Cautious About
Increasing Deductibles: This reduces premiums but isn’t technically a “discount.” Ensure you have emergency savings to cover higher out-of-pocket costs before raising deductibles.
Reducing Coverage: Lowering liability limits or dropping collision coverage saves money but may leave you dangerously underinsured. Don’t sacrifice adequate protection for lower premiums.
The Compound Effect
Here’s where it gets exciting: discounts often stack. You might receive:
- Bundle discount: 20%
- Good driver discount: 25%
- Automatic payment: 3%
- Paperless: 3%
- Security system: 15%
While discounts typically don’t combine additively (they’re usually applied sequentially to the remaining premium), you could still see 40 to 50% in total savings.
On a $2,000 annual premium, that’s $800 to 1,000 in savings every year.
Take Action Today
Call your insurance agent or log into your online account right now. Ask these three questions:
- “What discounts am I currently receiving?”
- “What other discounts do you offer that I might qualify for?”
- “What changes could I make to qualify for additional discounts?”
Then implement the changes that make sense for your situation. Even capturing just 2 to 3 additional discounts could save you hundreds of dollars annually. Money that’s better in your pocket than the insurance company’s.