Car Insurance Companies Offer Discounts for Being Loyal
Acquiring a new customer is more expensive than retaining an existing customer, and your insurance provider knows this. Also, it doesn’t speak well for an insurance provider if all their customers switch to other options. This is why insurance companies now offer loyalty-based discounts to lure their customers to remain with them.
Moreover, with the internet providing an easy option for customers to go online and compare auto insurance rates offered by a multitude of providers, along with the discounts they are offering, it has become very important.
Customer loyalty is an important factor that influences your car insurance prices. Most insurance companies reward loyalty with either discounts or a higher coverage for the same price. That’s why even though it helps some customers to change insurance providers at the end of one year, or every two years, for customers that do stick with one provider with many years reap their rewards by having access to loyalty discounts.
Loyalty Discounts Vary by Company
You don’t even need a full coverage policy to be eligible for these discounts. Even a basic auto insurance policy is eligible for a loyalty discount. The discount percentage, however, varies by provider and by state.
A company such as GEICO, for example, provides loyalty discounts to buyers of multi-car insurance and insurance bundles. Progressive rewards loyalty by offering an accident forgiveness policy for customers renewing the policies at least for the fifth consecutive year. The discount they offer is an accident forgiveness policy. USAA provides loyalty discounts only to accident-free drivers. The Farmers insurance group offers a special loyalty discount to customers who have a relation with the company for at least three consecutive years. Nationwide offers 2% to 15% loyalty discount to customers who have been with the company for a minimum of three years and have an accident-free driving record.
The below table shows the type of loyalty discounts offered by each company.
| Company name | Type of loyalty discount |
|---|---|
| Geico | Multi-car insurance and bundling discount |
| Progressive | 5th consecutive year onwards with accident forgiveness |
| Farmers | Long-run relationship with accident-free driving records |
| USAA | 3rd consecutive year onwards with accident forgiveness |
| Nationwide | 2% to 15% discount for a minimum of three years’ relationship |
The following table lists the loyalty discounts offered by major insurance providers by state. It also shows the changes in the average premium as a result of these discounts.
| State | Average Premium | Provider | Average Discount Percentage | Average Premium after Discount |
|---|---|---|---|---|
| Florida | $5,729 | Progressive | 3% | $5,557 |
| State Farm | 4% | $5,500 | ||
| Kentucky | $3,770 | Nationwide | 5% | $3,582 |
| Progressive | 1% | $3,732 | ||
| State Farm | 4% | $3,619 | ||
| Travellers | 3% | $3,657 | ||
| California | $3,678 | State Farm | 9% | $3,347 |
| Travellers | 5% | $3,494 | ||
| USAA | 4% | $3,531 | ||
| Louisiana | $3,208 | Progressive | 3% | $3,112 |
| State Farm | 4% | $3,080 | ||
| Maryland | $3,080 | Liberty Mutual | 4% | $2,957 |
| Nationwide | 2% | $3,018 | ||
| Travellers | 5% | $2,926 | ||
| USAA | 3% | $2,988 | ||
| Alabama | $1,604 | Farmers | 1% | $1,588 |
| Nationwide | 2% | $1,572 | ||
| Georgia | $1,593 | Nationwide | 8% | $1,466 |
| Nebraska | $1,511 | Farmers | 1% | $1,496 |
| State Farm | 4% | $1,451 | ||
| Colorado | $1,344 | Farmers | 1% | $1,331 |
| Progressive | 5% | $1,277 | ||
| State Farm | 4% | $1,290 | ||
| Travellers | 3% | $1,304 | ||
| West Virginia | $959 | Nationwide | 3% | $930 |
| Progressive | 1% | $949 | ||
| Kansas | $861 | Progressive | 1% | $852 |
| State Farm | 4% | $827 | ||
| Utah | $788 | State Farm | 5% | $749 |
| North Dakota | $630 | Farmers | 1% | $624 |
| Progressive | 1% | $624 | ||
| State Farm | 4% | $605 | ||
| Hawaii | $569 | State Farm | 4% | $546 |
Find a comprehensive analysis of all the ways to you can save on your car insurance, here.
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