Auto insurance companies have known for years that certain behaviors exhibited by drivers lead to fewer claims and less risk of insurance loss. In an effort to encourage such behaviors, insurers reward their policyholders with discounts. These discounts offer one of the easiest methods for lowering your car insurance rates.

Our goal below is to introduce some of the discounts your auto insurer might offer. Although you’ll be familiar with many of them, some may be new to you. It’s important to realize that every car insurance company is different, and thus it pays to shop around for the lowest rates.

Discounts Earned By Your Actions

One of the most important factors in calculating your rates is your driving record. Your record has substantial predictive value to insurers. It helps them to gauge the likelihood that you will cause an at-fault accident sometime in the future. Given its weight, it should not be surprising that most insurers offer a discount for maintaining a clean record. If you manage to steer clear of tickets, convictions, and at-fault accidents, you’ll qualify for a rate reduction.

You can also earn a discount by limiting the number of miles you drive. The more you drive, the more likely you are to be involved in an accident. For this reason, most insurance companies extend a low-mileage discount to their policyholders.

If you have recently received your driver’s license, consider enrolling into a driver education course. These courses teach enrollees to drive safely, whether in the presence of aggressive drivers or during poor weather. Graduating from this type of course indicates to your insurer that you’ll make safe decisions while behind the wheel.

Many companies will also apply a discount to your policy once you reach a certain age (e.g. 65). They do so because older drivers tend to drive less, and thus present a lower risk of future claims.

Discounts Influenced By Your Automobile

The type of car you drive will affect your premiums. Insurers take into account that some vehicles are associated with more frequent and costly claims than others. The reasons vary. Some cars are equipped with fewer safety features; some are more attractive to thieves; and some offer less-responsive steering controls.

Each make and model is assigned a score by the Canadian Loss Experience Automobile Rating (CLEAR) system. If your car is given a low score, which implies a low-risk claims history, your rates will be lower than otherwise.

A lot of insurance companies will lower your premiums if your car is equipped with an alarm system or “kill switch” (to cut the ignition). Such anti-theft features lower the likelihood that your vehicle will be stolen.

Anti-lock brakes and air bags may also cause your rates to drop. The former help you to stop your car more quickly, which reduces the risk that you’ll cause an accident. The latter reduces the risk that you or your passengers will sustain serious injuries during an accident.

Discounts Related To Your Insurance Policy

Insurers also extend discounts to policyholders who agree to bundle their policies. For example, if you carry your auto insurance coverages with one company and your property insurance with another, you’ll enjoy a rate reduction for consolidating them under a single company. This is also the case if you have more than one vehicle, and each is covered by an individual policy. Placing them on a single policy is usually less expensive.

You can also save money by paying your premiums on an annual basis. Many people pay monthly, and as a result are required to pay a small administrative fee ($5 to $10) each month. During the course of a year, this can add up to over $100 in extra fees on a single policy.

The deductibles on your coverages provide another opportunity to lower your rates. By raising them, you’ll reduce your insurer’s risk of loss in the event you file a future claim.

One of the best ways to enjoy a discount on your car insurance rates is to compare quotes from other insurers whenever your policy is about to expire. You may be able to save hundreds of dollars each year by shopping around.