11 Ways Veterans Can Save on Auto Insurance

11 Ways Veterans Can Save on Auto Insurance

Veterans may qualify for a military/vet discount with the insurer. 

The scope of benefits offered to service members is not restricted to VA loans or TRICARE. As a Veteran, you can qualify for enormous discounts and take advantage of several programs to reduce your auto insurance premiums.

Here are ten ways you, as a current or former service member, can save on auto insurance premiums and other costs associated with it.

But, where we move on to that, here is a glimpse at military auto/car insurance.

A car insurance policy that offers special discounts and benefits to current and former military personnel, veterans, and members of specific armed forces associations is called military car insurance.

Compare Insurance Costs Before Buying The Car

Sometimes the most significant savings can happen before you even buy the car. To get the lowest quote, you would have to compare the costs of different companies and decide upon the best one.

Moreover, it would be best to consider the cost of auto insurance before you even buy the car. Decide what coverages you’ll be needing and how much you are willing to pay for them. You can even qualify for some military discounts.

In most states, military members receive a discount of 15% off comprehensive coverage for vehicles parked in garages on military bases. Car owners in California receive a 5% discount on their comprehensive and collision insurance when they store their vehicle on base.

If you store your vehicle in a secure location for at least 30 days without driving your car, you can receive a 60% discount on your auto insurance. Military members may take advantage of this benefit while deployed, but it is unavailable in Hawaii, North Carolina, and Virginia.

The type of car you choose can also affect the premium rates. Buying a vintage car or customizing your vehicle will require additional coverage options that might increase the insurance cost. You can also choose a cheaper vehicle to reduce the premium rates.

Bundle Your Insurance Coverage

The quote you receive from an auto insurance company for the insurance of just one vehicle may be higher than the quote you would receive if you asked about the insurance of multiple drivers or cars. Insurance companies will offer a bulk rate to gain your business. If you bring in more of it, they may be willing to give you a better deal.

To obtain a multi-driver license, you must live in the same residence and be related to each other. You can find out if you qualify by contacting your insurance agent. Two unrelated individuals can also obtain a discount; however, they must own the vehicles jointly.

Additionally, some companies offer discounts on auto insurance if you maintain other policies with them, such as homeowners insurance. Also, Allstate offers a 10% discount on car insurance and a 25% discount on homeowners insurance when you bundle the two, so ensure you check whether such deals are available and applicable.

Take a Defensive Driving Course

Get the most out of your car by practicing defensive driving. To do so, you need to practice safe driving habits where you are ready to handle any situation, and you know what to do. Practicing defensive driving is a life skill. If you find yourself in a position of road rage, defensive driving will come to your rescue.

Defensive driving will help you avoid accidents and not be the cause of them. Staying safe while driving will help you become a responsible and careful driver. To become a safe driver and qualify for lower rates, you can avoid accidents, hazards and try getting fewer tickets.

Maintain or Improve Credit Score

Credit scores can influence auto insurance rates.

You may need to improve your credit score to qualify for better rates. For this reason, insurance providers will pay close attention to this numerical value during the vetting process.

VA does not establish a minimum credit score, but lenders do- a practice called overlays. An individual’s credit score ranges from 300 to 850, with a higher number indicating a more creditworthy individual.

Several lenders’ minimum credit score threshold has been increased to 640, but there are still options for borrowers with a 580 credit score.

In the United States, there are three major credit bureaus: Experian, Equifax, and TransUnion. Each company keeps its records of your late or on-time payments, delinquencies, credit use, number of inquiries into your credit, the type and mix of accounts you have, and how long you have had them.

As a first step, you should obtain copies of each of your three credit reports, which you can obtain for free at annualcreditreport.com. Ensure that none of the three credit reports contain any errors that could adversely affect your credit rating. You should dispute inaccurate information with each credit bureau to have it removed from your credit report.

Next, you should pay off existing debt, mainly revolving around credit card balances. This may improve your credit score in the short term because it decreases your credit utilization ratio, which is the ratio between how much available credit you have and how much credit you are currently using.

Don’t exceed 40% of your credit limit, and always make your payments on time.

Talk to a VA lender if you need help improving your credit score. Many lending professionals can offer suggestions for improving credit scores and even have ways to do so quickly.

Your lender will tell you what you need to do to improve your credit score with a rapid rescore.

Your VA lender will also take into account other factors in addition to your credit score.

The VA lender will closely examine your income stability, employment history, and debt-to-income ratio.

The debt-to-income ratio, or DTI, is calculated by adding your total monthly expenses — such as debt payments, rent or other housing expenses, and alimony or child-support payments — and dividing that number by your gross monthly income. In general, the lower your DTI ratio, the lower your credit risk is perceived to be.

Related:Auto Insurance Discounts for Veterans: What You Need to Know

Change Your Payment Preferences

Opt for Autopay!

You may be eligible for an autopay discount if you pay your car insurance in installments. The insurer will automatically charge your credit card or deduct the payment from your checking account on the due date.

Ensure that you have sufficient funds in your account (or adequate credit on your credit card) to cover the payment when it occurs. Using this method, you can ensure that your payments will be made on time. You may also receive a discount if you consistently make your payments on time.

Because monthly payments are subject to additional processing fees, you can also pay for your auto insurance in advance for the entire year, thereby reducing your premium. Paying your car insurance in advance could save you $120 per year in the long run. Don’t forget to shop around for insurance every six months, even if you pay your auto insurance upfront for the entire year.

Depending on your insurance company, you may be able to pay your car insurance monthly, quarterly, or annually.

You decide to make monthly payments on a six-month policy. Car insurance companies typically charge you for the first month’s premium after taking the total six-month premium and splitting it into six equal payments. Furthermore, they may add a few dollars to each price to cover administrative costs. In the next five months, you will make payments to maintain your coverage.

In general, no-deposit car insurance refers to policies that can be purchased in one-month increments. Usually, the first month’s payment for car insurance is due upfront, so there is typically no deposit or down payment required. Because insurers cannot offer free coverage immediately, no matter how attractive the deal sounds, it is impossible to obtain a car insurance policy without making the payment.

Look for Affinity Group Discounts

How does an affinity group work?

Several insurance companies market themselves to affinity groups. Insurance Information Institute, a trade organization, indicates that these groups may include employees of a company or alumni of professional or business associations. Members of an affinity group who sign up with a specific car insurance company will receive a discount.

Insurance companies use affinity groups to access a pool of potential customers who make up a demographic they consider “less risky” and therefore eligible for lower rates. Members of these affinity groups are typically compensated for introducing new customers to the insurer.

Geico, The Hartford, Liberty Mutual, MetLife, and Nationwide are auto insurance companies that offer affinity-based policies.

However, just because you qualify for affinity-based rates with a company does not mean it is the best option for you. Other insurers may offer lower regular rates. It will help if you compare rates from several carriers.

Drive Less Often

Insurance costs and risks are lower when you drive fewer miles per year.

Generally, the fewer miles you drive your car per year, the lower your insurance rate is likely to be, so you should always ask an insurance company to tell you what their mileage threshold is.

Shop Around to Compare Rates

Here’s how you can compare the rates and qualify for the best quote.

Online aggregators

Aggregator websites (also called comparison websites) allow users to enter a single form and simultaneously receive quotes from several insurers. Clients get provided with quotes from all insurers, and they can choose the one they prefer.

They are marketed as the “ultimate online one-stop insurance shop, giving consumers instant and easy access to a range of insurance solutions, tailored specifically to their insurance profile.”

No discounts for loyalty

A loyalty discount is a discount given to regular customers. In the case of Car Insurance, loyalty discounts can be earned while renewing the policy without switching companies for a certain number of years.

You are entitled to a loyalty discount when you renew your vehicle insurance policy with the same insurance company consecutively for a set number of years.

You can also earn a loyalty discount by renewing your car insurance with the same company a specified number of times.

Choose a Veteran Friendly Insurance Company

USAA offers the best cheap insurance for members of the armed forces at an average cost of $1,053 per year, according to a study. In my opinion, because of the low rates and the excellent service offered to military families, military members and their families should consider USAA as an insurance provider.

I believe Geico may be comparable to USAA since I am a veteran retired from the military regarding low rates and discounts.

There is no military discount offered explicitly by USAA, as they only provide insurance to members of the armed forces. Still, they do offer some of the most competitive rates for families of active-duty military members.

Moreover, USAA is 30% cheaper than the average insurance cost for the insurers we surveyed. The fact that USAA has the lowest average rate out of the five states we surveyed is essential to note, but Geico and State Farm have the lowest rates in other states.

USAA car insurance excels in customer satisfaction as well

USAA scored a perfect 5/5 in the shopping experience, claims to process, and overall satisfaction in auto insurance companies’ latest JD Power survey. This has consistently been one of the company’s best rankings.

Increase Your Deductible

In the event of a loss covered by your insurance policy, the deductible is the amount you must pay before your policy kicks in.

It spreads the financial risk of loss between you and the insurance company. A higher deductible means a lower premium.

In general, deductibles are associated with property damage rather than a liability, which kicks in when you are legally liable for someone else’s injuries or damages to their property.

Reduce or Remove Coverage You May Not Need

If you own a cheap car, you may want to drop coverages that pay out when your vehicle is damaged. Moreover, roadside assistance might be redundant if you have a service like AAA. You can also reduce coverage for old cars.

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