Car Insurance Companies Offer Discounts for Being Loyal

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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 nameType of loyalty discount
GeicoMulti-car insurance and bundling discount
Progressive5th consecutive year onwards with accident forgiveness
FarmersLong-run relationship with accident-free driving records
USAA3rd consecutive year onwards with accident forgiveness
Nationwide2% 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.

StateAverage PremiumProviderAverage Discount PercentageAverage Premium after Discount
Florida$5,729Progressive3%$5,557
State Farm 4%$5,500
Kentucky$3,770Nationwide5%$3,582
Progressive1%$3,732
State Farm 4%$3,619
Travellers3%$3,657
California$3,678State Farm9%$3,347
Travellers5%$3,494
USAA4%$3,531
Louisiana$3,208Progressive3%$3,112
State Farm 4%$3,080
Maryland$3,080Liberty Mutual4%$2,957
Nationwide2%$3,018
Travellers5%$2,926
USAA3%$2,988
Alabama$1,604Farmers1%$1,588
Nationwide2%$1,572
Georgia$1,593Nationwide8%$1,466
Nebraska$1,511Farmers1%$1,496
State Farm 4%$1,451
Colorado$1,344Farmers1%$1,331
Progressive5%$1,277
State Farm 4%$1,290
Travellers3%$1,304
West Virginia$959Nationwide3%$930
Progressive1%$949
Kansas$861Progressive1%$852
State Farm4%$827
Utah$788State Farm5%$749
North Dakota$630Farmers1%$624
Progressive1%$624
State Farm4%$605
Hawaii$569State Farm4%$546

Find a comprehensive analysis of all the ways to you can save on your car insurance, here.

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