Car Insurance Discounts When Working from Home

Sweatpants, coffee on tap, daytime Netflix binges—just some of the perks of working from home. There’s more, though, as remote working could net you some serious discounts on your car insurance.

While you’re brewing your 5th cup of the day and brushing cookie crumbs and cat hairs from your desk, take a look at the following tips for saving on your car insurance.

Step One: Speak with Your Insurer

If you have recently been tasked with working from home, like so much of the US population since early 2020, you should contact your insurance provider.

Ask them about car storage insurance when your car is completely off the road, and low-mileage options, when you have reduced your mileage.

Americans drive an average of 13,000 to 14,000 miles a year, and over 8,000 of this is tied to their daily commute. Take that out of the equation, remove a vacation or two, and your mileage could drop to just 3,000 or 4,000 miles.

At this level, many insurance companies are happy to offer you a discount. With Geico, for instance, you could save between 10 and 20% on your premiums by dropping your commute and keeping your mile count under 3,000.

Alternatively, you can join a low-mileage program, whereby a telematics device is installed in your car to track you while driving. These devices record everything from the miles you travel to the way you drive, determining how much of a risk you are.

Step Two: Look for Discounts

Whether you’re applying for a new policy or changing your current one, you can look for discounts to bring those premiums down. These discounts are based on everything from your age and marital status to your driving history. They include:

  • Multi-Policy Discounts: If you purchase more than one insurance policy from the same provider, you could save up to 30%. This generally applies to home insurance and car insurance.
  • Multi-Car Discounts: Offered to drivers who add more than one car to an auto insurance policy.
  • Membership: Members of the military, government workers, and seniors are offered discounts with some of the biggest insurers.
  • Car Features: Safety features and anti-theft devices all help to reduce your insurance premiums. Some of the biggest savings are on features that come standard, and you’ll only notice them if you drive a very old car.
  • Payment Discounts: Go paperless, choose Autopay, or pay for your policy upfront—all of these can net you a small discount. Over time,as you add more discounts, the savings will compound.
  • Good Student Discount: If you’re a student, achieve and maintain good grades and most insurers will give you a sizeable discount on your insurance premiums.

Step Three: Remove Unnecessary Coverage

Most states require liability coverage, and some also insist on uninsured/underinsured motorist coverage. Beyond this, everything else is optional, and it could double the size of your premiums.

Collision and comprehensive coverage are great to have, and if you have an expensive car and are involved in an accident, they will save you a small fortune. Until that point, though, they could cost you dearly.

Step Four: Improve your Credit Score

Your parents were right—your credit score really does follow you throughout your life. Insurers always factor your credit score into the equation because they know that drivers with poor scores are more likely to make costly claims.

Rebuilding your credit score is not something you can do overnight, but there are a few quick fixes you can try out:

  • Repay Your Debt: Clear as much of your current debts as possible. The more you pay, the lower your balances will be, and the less interest will compound. Low balances mean a higher credit utilization ratio, which accounts for a sizeable chunk of your credit score.
  • Keep Cleared Cards: Your credit utilization ratio calculates all your current debt and compares this to your available credit. The more you have used, the more this aspect of your score will be affected. To avoid seeing this score plummet, keep all cleared cards active.
  • Increase Credit Limits: When you increase your credit limits without increasing your debt, your credit utilization ratio improves. The change will be slight, but it all helps to improve your score.
  • Keep Meeting Your Monthly Payments: Your payment history is the most important part of your credit score. It takes the longest to improve but can be destroyed with a few missed payments. Make all payments on time to avoid any catastrophes.
  • Check Your Credit Report: Monitor your credit closely and keep it as clean as possible. If you notice something that shouldn’t be there, contact your creditors or the credit bureau and contest it.
  • Avoid New Accounts: Every time you open a new account, your credit score takes a hit. It also suffers slightly from the hard inquiry, which precedes every new account opening.

Step Five: Increase Your Deductible

Last but not least, you can increase your deductible to reduce your premiums. It will leave you with a big bill if you’re in an accident, but it could save you a fortune before then. Keep in mind that if you’re not driving as much as you did, your risk of being in an accident drops considerably.