Discount Auto Insurance A Guide To Finding Low Cost Premiums

Finding affordable auto insurance coverage is a common objective for many drivers. Tough economic times have only served to place a greater urgency on this need as consumers struggle to find ways to save money.  When searching the internet and advertisements for low auto insurance rates, consumers will often come across the term "discount auto insurance".  

But what exactly is Discount Auto Insurance? In this article we'll define what it is, find out how to reduce insurance rates, point out some common pitfalls to watch out for, and then look at the most effective ways to shop for the best deals.  

Discount Auto Insurance Explained

We first need to distinguish the difference between discount auto insurance as the term is used to refer to: A. inexpensively priced product offered by certain insurance companies - and B. auto insurance discounts, which all insurers typically offer to their customers in some form.   

There are indeed many insurance companies that specialize in providing car insurance which is frequently less expensive than that of many of the larger, well-known insurers. The term discount auto insurance, however, is not one you'll find used within the insurance industry. Instead, it has simply emerged as a commonly used descriptor to refer to companies that consistently offer inexpensive insurance products. So how do they do it? Is there a trick? It should come as no surprise when we tell you the answer is no, there are no tricks. Low priced auto insurance providers simply include only the coverage that meets the minimum legally required level for any particular state. The old adage that we get what we pay, in this case, certainly rings true. If you absolutely need to get the lower cost premium, expect to have less quality in some areas – as there may be features and/or services that you will have to do without. For example, if customer service or claim response times are poor this could offset the value of a lower premium. Be sure to check sites such as JDPower.com in order to view customer service ratings for auto insurance companies. Additionally, add-on's (such as towing service) typically cost more from "discount" providers.  You need to be confident that a bare bones auto coverage policy is sufficient for your needs. 

Auto Insurance Discounts

Auto Insurance discounts are typically offered to drivers who meet certain criteria, leading to a reduction in the overall premium. Examples of the most common discounts are:

• Safe Driver:  drivers can save up to 20% on rates when they meet certain safety criteria, such as no accidents in a given time period, no DUI's, and no more than one violation point on their driving record
• Air Bags and Automatic Seat Belts: expect a 30% rate reduction from some insurers for having these safety features
• Anti-Theft Devices:  lower rate on Comprehensive coverage when vehicle is equipped with low-jack, a GPS tracking system or security alarm
• Anti-Lock Brakes (ABS):  normally a rate reduction of 5% or more on Property Damage and Bodily Injury policies
• Driver Education Classes: some insurers will give up to 10% off certain coverage's  for completion of a state approved driver's education class
• Multi-policy: savings can be realized if you have two or more vehicles insured with the company, or have other insurance products with them (i.e., Home, Life)
• Good Student: many insurers will reward teenagers who maintain a B or higher grade point average with a lower premium
• Low Annual Mileage: lower rates for drivers who operate their cars less frequently  

Tips to finding the Best Rate

Thankfully, we live in an age where the most effective, efficient method of price comparison shopping is right at our finger tips…the internet.  Utilizing a few quality web sites to compare rates is invaluable for finding low cost premiums. The trick is to use a site that compares rates from multiple carriers, not just their own. Additionally, some rate comparison sites only compare rates from only a select few companies, so be sure to leverage several web sites in your shopping.  Examples of sites that offer effective comparison rate shopping are: Progressive.com, onlineautoinsurance.com, and comparisonmarket.com. 

Most people know that raising your deductible and having a clean driving record both translate to lower premiums. Many people, however, do not realize that your credit record can have an effect on your premiums. Be proactive and monitor your credit report and address any derogatory credit items by paying them current.