California Car Insurance Discounts: Soup to Nuts

With insurance premiums averaging nearly $1,800 per year, California was ranked #5 in 2010 as one of the most expensive auto insurance states. While California’s auto insurance policies can be rather pricey, auto insurance discounts certainly help to bring the premium cost down. Many discounts are automatically incorporated into the policy premium. However, not all discounts are automatically generated and if you don’t ask for these discounts you just might miss out on an opportunity to save.

California Discount Considerations

Driving history, vehicle type and age are just some of the factors that determine which discounts are available to you. Although there are a host of discounts available in California, the insurance carriers are not required to disclose every discount available to you, in addition you may not qualify for all the discounts. Still, it is fair to say that most policyholders will qualify for at least one or two of the discounts in their auto insurance history.

Good Driver

The Good Driver Discount is designed to acknowledge and reward the responsible driver. In fact, the State of California mandates all California auto insurance carriers to offer this discount to its qualifying policyholders. As outlined in Section 1861.025 of the California Insurance Code, the policyholder qualifies for the discount when he or she has not received more than one traffic violation in the past three years and has not been found responsible for any at-fault accident claims in the same period of time. In addition, the driver must not have had any felonious vehicle activity, nor had any activity dismissed within the past 36 months. If you meet these requirements the California insurance carrier must provide you with a Good Driver Discount that is no less than 20 percent below the rate you “would otherwise have been charged for the same coverage” (California Insurance Code Section 1861.02).

Good Student

Unlike the good driver discount, the good student discount is not required by the State of California. However, the discount provides a noticeable discount for just earning good grades. You can earn as much as a 5 percent discount for each driver on the policy that earns a “B” average or higher. Though specifics vary by carrier, the discount applies to most licensed high school students as well as college and graduate students. In most cases you must provide proof of the grades with each policy issuance to receive and maintain this discount

Multi-Discounts

If you have more than one vehicle on your insurance policy, you may qualify for a multi-vehicle or multi-car discount. The percentage for this discount depends on the number of vehicles that you add to your policy, as well as the percentage established by the carrier during its state certification. In addition to the multi-vehicle discount, you might also qualify for a multi-policy discount if you carry more than one policy with the same insurance carrier. While the multi-vehicle discount is usually applied to your policy automatically, you may have to inform your carrier that you have multiple policies with their company and provide your other policies numbers in order to obtain the multi-policy discount, if it is available.

Driver Improvement

Defensive driving and accident prevention courses improve your driving awareness in efforts to make you a better driver. Not only do these courses improve your driving skills, the courses can help to reduce the points on your drivers’ license, as well as reduce your auto insurance premiums. Insurance carriers are not required to provide discounts for driver improvement and accident prevention courses. However, if you have completed a course recently, you should definitely ask your carrier if the discount is available. The completed course may save you some money on your insurance policy.

Low Mileage

Drivers that spend lots of time on the road are more susceptible to being involved in accidents than those that drive less miles. As a result, drivers with low annual mileage often receive a low mileage discount. In most cases this discount is applied automatically onto the policy.

Military

California insurance carriers often acknowledge the hard worker of military staff and officials by offering a military discount. Similar to other discounts, the military discount is not mandated by the State of California. However, if the carrier offers the discount and you qualify, you can reach a discount as high as 20% or more. Always ask your insurance carrier if this discount is available to ensure it is applied to your policy. You may have to provide a copy of your credentials or discharge papers to support the request.

Affiliations

Memberships in motor clubs and affiliations, such as AAA, may qualify you for affiliation discounts. Insurance carriers generally offer discounts to policyholders because of their low-risk activities. Motor clubs and other affiliations usually provide additional protections to their members that help in reducing their exposure after an accident. Affiliate services such as emergency towing, roadside assistance and affiliate repair center discounts help to reduce the insurance carrier’s risk. Insurance carriers often acknowledge this reduced risk by providing affiliate member policyholders with discounts ranging from 3 to 5 percent of the policy premium.

Paid in Full

The way that you pay for your auto insurance policy can also affect your overall policy premium. California insurance carriers often provide a noticeable discount when you pay your policy in full at the time purchase. The paid-in-full option not only provides a lower premium, it also helps you to avoid service fees which are often tied to monthly payment options.

Persistency

Persistency discounts are designed to recognize the renewing customer. This discount provides approximately a 5 percent discount for policies that have been renewed once, or multiple times. The persistency discount is applied automatically to the policy at the time of renewal and is always included in the renewal policy packet information.

How To Get Discounts

The easiest way to ensure that you are receiving all your available discounts is to research and ask. Read your insurance policy packet thoroughly to determine which discounts you already receive. If you feel that you qualify for more discounts, speak with your insurance agent, broker or customer service representative for details. Tell your insurance representative the reasons why you think you qualify for additional discounts and ask them if those, or any other discounts are available to you. If you are unhappy with the available discounts and the rates that you are receiving from your carrier, use the opportunity to comparison shop to determine if your rates are truly competitive. As you do, make sure that you are including the applicable discount information in your comparison rates to ensure you are getting a true apples-to-apples comparison.