Your Guide to Car Insurance Discounts

Car insurance discounts can help you save hundreds of dollars. Here are the most common types available.
Feb 17, 2022

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​​Car insurance can be expensive, but you can cut down on your monthly premium by finding a discount. The best car insurance companies offer discounts for a variety of reasons, including owning a home, driving safely and getting good grades if you're in high school or college.

The most common types of car insurance discounts are based on:

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NerdWallet looked at the top 10 biggest companies in the nation to see what discounts they offered and how you can qualify. Note that each insurer sets its own rules regarding discounts and certain offers may not be available in all states. So, you’ll need to check with your provider for more specific details.

Additionally, although it is one of the largest insurers, we didn't include USAA because it offers policies only to active military, veterans and their families.

Here are the most common car insurance discounts and the companies that offer them.

Driver history car insurance discounts

Your driver history and driving behavior are two of the biggest factors in the discounts you earn.

Accident-free or 'good driver' discount

Most insurers will offer a discount if you’re a “good driver.” The definition of a good driver varies but generally means not having any accidents or traffic violations in the past three to five years.

Companies offering an accident-free or “good driver” discount:

  • Allstate.

  • American Family.

  • Farmers.

  • Geico.

  • Liberty Mutual.

  • Nationwide.

  • State Farm.

  • Travelers.

Nerdy tip: While most insurers consider “accident-free” and “good driver” synonymous, some insurers, like State Farm, offer these as separate discounts. When that’s the case, you typically can only get one or the other.

Defensive driver discount

You may receive a discount if you complete a defensive driving course, which teaches you tactics to become a safer driver (e.g., leaving enough space between cars to avoid an accident). In some cases, though, only drivers 55 years or older qualify for this discount.

Companies offering a defensive driver discount:

  • American Family.

  • Farmers.

  • Geico.

  • Nationwide.

  • State Farm.

Telematics discount

If you don’t mind sharing your data, you could save hundreds of dollars with insurers that use telematic technology, which tracks your driving behavior via a mobile app or device that plugs into your car’s diagnostic port. Some examples include Allstate’s Drivewise reward program or pay-per-mile car insurance, which bases your auto insurance rate around the amount of miles you drive.

Know before enrolling: Some companies may increase your rates if you have unsafe driving habits like hard braking or speeding.

Companies offering a telematics discount:

  • Allstate.

  • American Family.

  • Farmers.

  • Geico.

  • Liberty Mutual.

  • Nationwide.

  • Progressive.

  • State Farm.

  • Travelers.

Affiliation car insurance discounts

Your job, school or clubs you’re associated with could help lower your car insurance bill.

Alumni or membership discounts

This discount may apply to alumni from certain universities, Greek life alumni and members of professional organizations like the American Library Association.

Companies offering an alumni or membership discount:

  • Farmers.

  • Geico.

  • Travelers.

Military and federal employees discount

If you’re a federal employee or you’re in the armed forces, a veteran or related to someone in the military, you may qualify for a discount.

Companies offering a military or federal discount:

  • Farmers.

  • Geico.

  • Liberty Mutual.

Vehicle-related features car insurance discounts

While new cars, cars with safety add-ons and electric vehicles can have high price tags, you can help offset the cost with a discount from your insurer. You might need certain insurance coverage to qualify, though, like MedPay or personal injury protection.

Alternative energy discount

An environmentally friendly car can save you money on both gas and insurance. And some carriers, like Travelers, will give you a discount regardless of whether you own or lease.

Companies offering an alternative energy discount:

  • Farmers.

  • Travelers.

Anti-theft

Anti-theft devices can save you money on car insurance in addition to helping you feel safer. Multiple insurers offer discounts for having protective devices like alarms or steering wheel locks.

Companies offering an anti-theft discount:

  • Allstate.

  • Farmers.

  • Geico.

  • Nationwide.

  • State Farm.

New car discount

Many providers will give out discounts if your car is three years old or newer. You might have to meet specific criteria. For instance, Allstate stipulates that your car must be the current or previous year’s model, and you must be its first owner.

Companies offering a new car discount:

  • Allstate.

  • Geico.

  • Travelers.

Safety equipment discount

In most cases, carriers will offer small discounts for vehicles with anti-lock brakes, dual airbags or other safety features.

Companies offering a safety equipment discount:

  • Allstate.

  • American Family.

  • Farmers.

  • Geico.

  • State Farm.

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Personal traits car insurance discounts

Discounts aren’t always based on your driving history or vehicle. You could earn one for getting good grades or simply owning a home.

Good student discount

Most insurers offer discounts to full-time students who earn good grades (typically at least a B average). However, age restrictions vary by carrier. For example, Nationwide offers this discount only to students ages 16 to 24.

Companies offering a good student discount:

  • Allstate.

  • American Family.

  • Farmers.

  • Geico.

  • Liberty Mutual.

  • Nationwide.

  • Pogressive.

  • Travelers.

Homeowner discount

Do you own a house? You could earn a discount, even if you don’t buy homeowners insurance from your auto insurer.

Companies offering a homeowner discount:

  • Farmers.

  • Liberty Mutual.

  • Progressive.

  • Travelers.

Student away-at-school discount

Students at college who leave their cars behind will naturally be driving less than usual. Because of this, certain insurers offer a discount. Requirements vary by provider but usually include age limits. For example, Progressive requires drivers to be 22 or younger to qualify.

Companies offering a student away-at-school discount:

  • American Family.

  • Farmers.

  • Liberty Mutual.

  • Progressive.

  • Travelers.

Customer loyalty car insurance discounts

Insurers reward loyalty with discounts for longtime customers and those who buy more than one product.

A word of caution about loyalty discounts: Some auto insurers use a practice called price optimization to charge loyal customers higher rates because they’re less likely to switch companies. That’s why it’s so important to compare car insurance rates, even if you’re receiving a loyalty (or other) discount. Your final rate may still be higher with a loyalty discount at your current insurer than with another company.

Continuous coverage or loyalty discount

Most insurers reward drivers who continue to buy policies from them. To get a loyalty discount, sometimes marketed as a “continuous coverage discount,” customers must sign onto a new policy before the old one expires. Some companies, like American Family, base the discount amount on how long a customer has been with the company.

Companies offering a continuous coverage or loyalty discount:

  • Allstate.

  • American Family.

  • Liberty Mutual.

  • Progressive.

  • Travelers.

Multiple cars discount

Most insurers offer this discount if you have multiple vehicles insured with their company. Certain providers, such as Progressive, let you add cars you don’t own to your policy, so long as the vehicles are parked at your address.

Companies offering a multiple cars discount:

  • American Family.

  • Farmers.

  • Geico.

  • Liberty Mutual.

  • Progressive.

  • State Farm.

  • Travelers.

Multiple policy (bundling) discount

This discount applies if you buy more than one policy from the same provider. For example, you might qualify when you get home and auto insurance from the same provider. You can usually bundle a wide range of products, from boat to RV to renters insurance.

Companies offering a multiple policy discount:

  • Allstate.

  • American Family.

  • Farmers.

  • Geico.

  • Liberty Mutual.

  • Nationwide.

  • Progressive.

  • State Farm.

  • Travelers.

Policy car insurance discounts

Policy car insurance discounts are some of the easiest to qualify for. They are earned based on how you buy and pay for your policy.

Automatic payments discount

Do you have trouble remembering to pay your bills? Switching to automatic payments could score you a discount and solve any worries about forgetting to pay on time.

Companies offering an automatic payments discount:

  • Allstate.

  • Farmers.

  • Liberty Mutual.

  • Nationwide.

  • Progressive.

Nerdy tip: Before using auto-pay, make sure you’ll have enough funds in your account each month to cover your insurance costs. You may not receive a warning if you don’t.

Paid-in-full discount

You could earn a discount for paying your entire policy upfront, whether it’s a six-month or year-long policy.

Companies offering a paid-in-full discount:

  • Allstate.

  • American Family.

  • Progressive.

  • Travelers.

Paperless discount

One of the easiest ways to earn a discount is by switching to electronic statements, meaning you won’t get a monthly bill in the mail.

Companies offering a paperless discount:

  • Allstate.

  • Farmers.

  • Liberty Mutual.

  • Nationwide.

  • Progressive.

  • Travelers.

What company has the most car insurance discounts?

Out of the 10 largest car insurance companies, Farmers offers the most discounts, with 23 available.

Also notable: While the types of offers vary by insurer, all 10 give out multiple policy and telematics discounts.

Company

Number of discounts

Star rating

23

4.5

NerdWallet rating 

18

5.0

NerdWallet rating 

17

4.5

NerdWallet rating 

14

4.5

NerdWallet rating 

13

5.0

NerdWallet rating 

13

5.0

NerdWallet rating 

11

4.5

NerdWallet rating 

11

4.5

NerdWallet rating 

10

5.0

NerdWallet rating 

8

4.0

NerdWallet rating 

*USAA isn't ranked because it is available to military, veterans and their families only.

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See what you could save on car insurance

Easily compare personalized rates to see how much switching car insurance could save you.

GET MY RATES

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Discount car insurance tips

Discounts aren’t always straightforward. Just because one company gives an accident-free discount after three years doesn’t mean the next company will have the same guidelines. Here are some tips when looking at auto insurance discounts.

Understand how discounts work

Before a discount is applied, your insurance rate is calculated. Your base rate is determined by factors like your age, gender, make and model of your car, driving history and location. After your agent has your base rate, surcharges may be added for traffic violations like accidents, speeding tickets or DUIs. Then, your discount is applied.

Ask about discounts

You don’t need to wait until you renew your policy to see if you’re eligible for a discount. Review the discounts on your company’s website and ask your agent if you qualify. You should always talk to a representative to confirm available discounts, since terms can change over time and discounts aren’t always automatically applied.

Consider overall premium cost, not just discounts

Although discounts can save you money on your car insurance, remember to look at the overall cost and not just the number of discounts you receive. For example, a company that offers no discounts could end up providing a lower premium than another insurer that charges a higher premium and offers 20 discounts.

Shop around

To find the best price and company for you, shop around for car insurance quotes at least once a year. Comparing rates from three or more companies will help you find the lowest premium.

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