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Military Discounts On Auto Insurance

By now, you’ve heard the commercials or seen the GEICO ads that tout the military discounts they have for their members. GEICO's commercials inspired us to ponder this question: Do all insurers have military discounts? Technically: Yes and No. Let us explain.

In 2006, the state of Louisiana passed RS 22:1425 which requires any motor vehicle insurer in the state of Louisiana to provide active military personnel a discount of twenty-five percent (25%)of the premium on any automobile liability insurance policy purchased in this state to cover motor vehicles owned by such military personnel. So, if you are dealing with a national insurer that has operations in Louisiana, then by the letter of the Louisiana law, they have to provide a 25% discount to all active duty military personnel stationed in Louisiana.

The state offsets the discount through tax credits to insurers. To our knowledge, Louisiana is the only state that has such a program.

To Save on Insurance You Better Shop Around
If you watch more than five hours of television a week, then there is a strong chance that you will see an auto insurance commercial. The rational is simple: Insurance companies want your business. Based upon industry estimates, it costs between $250 and $500 to bring on a new customer. On the other side of the coin, it costs 10% -20% of this number to retain a customer. Keep both numbers in mind when looking to reduce your auto insurance rates.

Given the difference in retaining a customer versus acquiring a new one, almost* every consumer has bargaining power with their current insurance provider. [*we say almost because we don't know your driving record] So, the question you have to answer is: are there any providers out there that can beat my current rates?

Start by getting a quote. This may seem like you are being a disloyal customer, but you are not. We would like to reiterate, your current company is spending between $250 and $500 to bring on a new customer. Smart and industrious organizations have a plan B. You should too.

If you are looking for military discounts or veteran discounts on insurance, we recommend starting with three companies that have a long history of serving the insurance needs of the military community. USAA, GEICO and Armed Forces Insurance all began by serving the needs of military personnel and/or government personnel as their underwriters understood the financial needs and the uniqueness of the military. (Most other providers would not touch military personnel in the late 1800s early 1900s due to the perceived risk of war casualties) Consequently, their quotes will have an implied military discount since a majority of their customers have military backgrounds.

In addition to military or veteran discounts, some additional things a savvy insurance shopper will ask for when looking for an auto insurance quote are:

New Car Discounts
2012 automobile models are now equipped with significant advancements in driver safety that are standard. For example, new vehicles have blind spot sensors in passenger side rear view mirrors to alert you of cars in your blind spot and the rear view camera is also becoming standard. These two innovations reduce accidents, which in turn will lower your rates.

Good Driver/Safe Driver/Defensive Driver Discounts
If you have a decent driving record, then you should definitely inquire about this discount. Another little known discount is a defensive driver (accident prevention) discount. For as little as $25.00, you can take a defensive driving course online and certain states like New York will require your insurer to give you a mandatory 10% discount.

Vehicular Discounts
If you drive an alternative fuels vehicle or if you have multiple vehicles insured, certain carriers provide discounts for these items as well. Ask for them.

Planners Discounts
If you are not in rush to get insurance due to your insurance lapsing (between 7 and 30 days), certain carriers also have an early sign-on discount (we call it planners). In fact, each year, it should be a customary habit to shop around for quotes to use this as a guideline to improve your rates with your current provider. If you are looking to shop around, you can request a quote here.

Claims and Reviews
Once you have locked in several quotes and are negotiating with your current provider, you should also continue your due diligence and get customer feedback on their claims process. There are several outstanding resources out there to assist you in this process:

Top 10 reviews
A reviews aggregator that lets you drill down by category and review actual user feedback.

The standard bearer in consumer reviews, but lacks user comments.

Consumer search does an outstanding job in aggregating JD Power and Consumer Reports content into an easy to use system.

Request a quote to save money on auto insurance.