Car Insurance Loyalty Discounts: What to Look For (2023)

Never let yourself catch feelings—for your insurance company, that is. Auto insurance companies want you to believe that the two of you are together, building a partnership that benefits both of you. They’ll send you cute emails and even offer you loyalty discounts if you stick with them for a certain period of time or buy multiple policies.

But just because you’re being rewarded for loyalty doesn’t mean you’re getting the best premium. Car insurance companies sometimes use loyalty discounts to mask rate hikes, and the longer you’re with one company, the more they’ll take you for granted. Keep your insurance company honest by using Insurify’s free car insurance quote comparison tool.

The Two Types of Loyalty Discounts

When it comes to auto insurance, there are two main discounts intended to reward customer loyalty.

Loyalty Program Discounts

The first type of discount offers insurance customers marginal savings for staying with a given insurance provider for a certain period of time, usually more than six months. Loyal customers can expect to save 10 percent or less on their insurance premiums.

Bundling

Bundles, also called multi-policy discounts, are a very common type of auto insurance discount. When your insurance provider also sells life insurance, renters or homeowners insurance, or a different kind of policy, they’ll give you at least 5 percent off your premium. When you have multiple homes or cars, or a big family, this can definitely add up.

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The Unfortunate Myth of Loyalty Discounts

Even if you fall in love with your insurance company and feel like you’ve built a trusting relationship, the depressing math of loyalty discounts means that you can’t count on them alone to keep your auto insurance premium low. Insurance companies will still raise your rates over time for a variety of reasons.

Insurance companies raise rates often. This doesn’t always mean you’re being taken advantage of. But the reality of the car insurance market is that loyalty discounts rarely add up to enough savings to justify you staying no matter what. Not to mention that insurance companies often have incentives waiting for new customers.

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Beware: Price Optimization

Here’s one reason in particular that loyalty discounts can go wrong for drivers.

Price optimization is a premium-setting technique whereby insurance companies try to guess the highest premium you’ll pay without leaving your current insurer. The longer you’ve been faithful, the algorithm thinks, the less likely you are to leave, even if your rates go up steadily. So they charge higher premiums to some longtime policyholders.

Some insurance companies use price optimization, though it’s banned in some states. Whether or not they’re doing the math behind your back to charge you the highest price possible, loyalty discounts just don’t sweeten the deal enough to make it worth your while to stay with your current insurer because of loyalty alone.

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Car Insurance Companies with Customer Loyalty Discounts

Here’s a rundown of what to expect in terms of loyalty discounts from the largest insurance companies around.

State Farm

One of the largest insurance companies around, State Farm provides discounts for multiple policies, and they sell a broad range of insurance products, such as home insurance and life insurance. Auto insurance policyholders can also get a discount for insuring multiple cars.

USAA

USAA is only for active or retired military members and their families, but if you pass membership down the generations, you can get a loyalty discount of 10 percent. You might even qualify for additional loyalty discounts on top of that. Bundling and multi-car discounts are also available.

Progressive

Ohio-based Progressive Insurance advertises bundling discounts that can lower your car insurance premiums by around 4 percent when combined with any number of Progressive insurance policies, along with markdowns of around 5 percent per car for multiple car insurance policies.

Some perks, like accident forgiveness, only become available discounts after you’ve been a loyal customer. Progressive also offers continuous insurance discounts if you’ve had insurance coverage for an extended period of time, no matter who your insurance provider was.

GEICO

That gecko looks friendly. But GEICO doesn’t give rewards for sticking around beyond the traditional multi-car discount and bundling, though you’ll be able to bundle with GEICO’s numerous insurance products.

Allstate

Allstate has your typical multi-car and bundling available discounts, and it’ll lower your deductible every six months you go without a car accident.

Nationwide

When it comes to loyalty programs, Nationwide offers a generous multi-car discount and a multi-policy bundling discount.

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Other Car Insurance Discounts

Since by now you’re hopefully wary of loyalty-based ways to lower your car insurance premiums, let’s go over a few other great ways to lower your car insurance premiums.

Car Discounts

Your car’s attributes can earn you all sorts of discounts. If it has updated safety features, like antilock brakes and airbags, along with anti-theft equipment, you can often qualify for a car insurance discount. Allstate also offers a discount if you buy a new car and are the first owner.

Driver Discounts

Policyholders can beef up their driving skills and earn discounts for taking a defensive driving course. In general, safe drivers with a clean driving record and long driving history will get great rates. For younger drivers who will get high rates based on their age, student discounts are usually available to full-time students earning a B average or better.

How to Know If Your Discounts Are Saving You Money

Insurance companies will raise your rates if you don’t show them you’re willing to shop around. So the best way to know if you’re getting the rate you deserve is to search far and wide for quotes from other insurance companies. If that sounds like a lot of work, you’ll love Insurify, a free car insurance comparison website that gives you a real slate of quotes to compare.

Frequently Asked Questions