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Car Insurance Discounts for Good Drivers

21-insurance -> Car Insurance Discounts for Good Drivers

Car insurance companies tend to offer discounts to customers they consider safe drivers. The reason is simple. If most of their customers are safe drivers, a company's overall risk goes down, and the company will have to pay out less in claims. Safe driver discounts typically apply to both the liability and the collision parts of your coverage.

Who is a “safe driver”? Insurance companies have different definitions and different rules, but in general, a safe driver is one who has not had an accident and has not been convicted of a traffic violation for a certain period of time (about three to five years). Oftentimes, new drivers can be eligible for a safe driver discount if they are covered under a policy that has been in effect for a certain length of time (usually three years).

Other criteria that insurance companies use to define safe drivers may surprise you. For example, drivers with good credit ratings typically pay lower rates because statistically they are less likely to have accidents. The same is true for students who get good grades. Many car companies give additional discounts to drivers who complete safety-training programs. These discounts apply just to both new and old drivers. Some companies adopt a merit-based approach. Specifically, they give you a small refund on your payment for every six months you don't have an accident. One innovative company gives you a device that plugs into your car and transmits information about your driving to the company. For example, it might provide information about the distance you drive, your average speed, and the time of day that you travel. The company then calculates a safe driving score based on these numbers. You could save money with this program, if you're a cautious driver or don't put many miles on your car.

In case your rates have gone up because you have had an accident, understand that the increase is not necessarily permanent. Most companies raise your rates for a period of three years after an accident but your rates will decrease so long as you avoid another accident or any traffic violations.

Some companies offer a program called “accident forgiveness” so that your rates will go up only slightly if you have an accident, as long as your driving record is essentially flawless. But even though companies that offer accident forgiveness might not raise your rates, you probably won’t receive a safe driver discount if you’ve had an accident.

Remember that companies have different definitions and programs for good drivers, so be sure to shop around to make sure you find the best quote.

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