Increasing Deductibles can Bring Auto Insurance Discounts, Says Experts


Asking the “right questions” and having a willingness to take risk are good steps in the direction of achieving better rates and unearthing uncommon discounts on auto insurance, according to experts.

Increasing Deductibles can Bring Auto Insurance Discounts, Says ExpertsThe Insurance Information Institute said that premiums become an obligation for owners with current deductable of less than $500.

Auto insurance expert, Dayana Yochim, suggests that increasing deductibles from $200 to $500 may consequently lessen the cost of comprehensive coverage (and collision coverage) by as much as 15% to 30%.

Since the typical yearly premium is valued at about $820, increasing deductibles could amount to $123 to $246 in savings. If deductibles are increased, this may bring in 40% worth of savings or more.

Yochim said that although a higher deductable may cause owners to pay more before the coverage takes effect, paying on small claims promptly gives the insurer an impression that the owner has a clean record, thus, offering them better rates.

Incidentally, driving less can also provide policyholders with insurance discounts. A SmartMoney survey indicates that owners who drive fewer than 7,500 miles a year can avail of discounts on their premiums by as much as 10% to 34% through their insurers. Other insurers require proof which may include a simple phone call to let them know that you drive less or using an electronic mileage gadget.

Yochim also suggests that certain actions that drivers do – which could be reported to their insurer – can unknowingly open the door to deeper discounts and more savings.

The Insurance Information Institute has a checklist on their website which can allow car owners to avail of discounts including being a customer for a long period of time, having good grades as a student, having no accidents on the last three years, availing of insurance for more than one automobile, having no road violations in the last three years, being a driver who is 50 to 55 years old, enrolling in a driver training course or a defensive driving course, owning an automobile anti-theft gadget or driving safety features, having college students in the family who live far from home, and availing of a combination of home and auto insurance coverage with the same insurer.

Yochim said that some companies offer a 10% to 20% discount if an owner combines both home and auto insurance in the same company. Drivers who score exceptional grades in school may even get as much as a 25% discount. Parents with college kids who live at least 100 miles away can lead to as much as a 40% discount.