Today, we’re explaining everything you need to know about car insurance renewal discounts and how to take advantage of them.
What is a Car Insurance Renewal Discount?
Car insurance companies like long-time customers. It’s easier to keep an existing customer than to onboard a new customer. That’s why they give customers incentives to stick with their current insurance company. These incentives are called auto insurance renewal discounts: you get a discount when you renew your auto insurance with a particular company.
Many American car insurance companies provide renewal discounts for long-time customers. It’s a way to reward customers for continuing to renew their same policy.
Renewal discounts help car insurance companies fight back against companies that provide “switch” discounts. Some car insurance companies in the United States provide discounts to customers who “make the switch” away from their old insurer for a new insurer. Renewal discounts give you an incentive to stick with your current insurance company.
Thanks to the rise of online auto insurance comparison websites, and the ease of online car insurance applications, it’s easier than ever for customers to jump between car insurance companies. You might pay $700 for car insurance from Progressive this year, only to switch to GEICO next year because it’s only $650. In this situation, Progressive might offer you a $60 renewal discount to keep you as a customer.
How Does a Renewal Discount Work? How Much Money Can I Save?
Renewal discounts are typically available companywide, regardless of your car insurance policy. If you have a minimum liability plan, for example, then you should be able to get a car insurance renewal discount, and you should be eligible for the same discount with a full coverage plan.
Generally, renewal discounts are given as a percentage of your total premium. Your car insurance company might give you a 10% renewal discount, for example. If your policy costs $1,000 per year, then you’ll receive a $100 discount, lowering your policy to a total of $900.
In other cases, a car insurance company will offer a flat fee renewal discount. The car insurer might offer you $50 to $100 to renew your policy, for example.
Renew Your Car Insurance Early
There are a number of advantages to renewing your car insurance early. If you renew your car insurance one month before it’s scheduled to expire, for example, then you might receive a renewal discount.
Your car insurance company might offer a 10% discount if you renew your policy one month before it expires, for example.
Renewing your policy early is a good idea regardless of the renewal discount. Renewing your insurance early helps you avoid hefty fines from driving without insurance. You also avoid the penalties caused by lapsed insurance coverage.
Insurance Companies Offer Other Discounts to Loyal Customers
Renewal discounts are just one discount available to loyal customers. Other discounts can include:
Multi-Car Discounts: If you have multiple cars insured under the same insurance company, then your company might give you a multi-car discount.
Multi-Policy Discounts: If you have multiple insurance policies with a single company, then you may be eligible for a discount. Many major American insurance companies offer homeowners insurance, car insurance, and other insurance policies. If you bundle these policies together, then you may be eligible for significant savings.
Conclusion: Ask your Insurance Company About Auto Insurance Renewal Discounts
Some car insurance companies are upfront about renewal discounts. Other companies make you ask for renewal discounts. Contact your insurance company to ask about any available renewal discounts.
Consider mentioning that you have an offer from another car insurance company and that the other company is offering to pay you to switch. In this situation, your current insurance company might be more willing to offer you a renewal discount: it’s the difference between keeping and losing you as a customer.
Unfortunately, renewal discounts aren’t very common. Approximately 1 in 4 American car insurance companies offers renewal discounts for renewing your policy early. Nevertheless, it doesn’t hurt to ask your insurance company about any car insurance renewal discounts available.