Car Insurance Discount for Customer Loyalty

Customer loyalty discounts can save you up to 7% on your car insurance if you remain with one company for multiple years or refer other customers to them.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Oct 2, 2020

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Here's what you need to know...

  • Customer loyalty programs are designed for businesses to retain and reward customers
  • Some companies take customers’ driving records into account
  • Referring friends may also earn savings for customers

Being a long-time loyal customer is one of the easiest ways to reduce what you pay for car insurance.

In fact, the customer loyalty car insurance discount is quickly becoming a popular discount offered by various carriers.

If you have been with your insurance company for a good number of years, and have a fairly clean driving record, you may be eligible for this type of discount.

You should check with your insurance carrier to find out for sure.

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Customer loyalty programs are nothing new in the business world. Car dealers have been offering such programs for decades, providing loyal customers with free oil changes, free safety inspections, and reduced rates on tires and repairs.

Customer loyalty programs are designed to keep customers returning to a business year after year.

It is a great way to increase a company’s customer base and the revenue that goes along with it.

Time and Safety

A customer loyalty car insurance discount can work in one of several ways.

One of the most common programs involves combining the length of time a person has been with the company with their safety record.

With this type of program, you might receive an annual rebate check for every year you remain with the company accident-free. Some of these programs even increase the amount of the rebate as accident-free years accumulate.

Other loyalty discount programs don’t put as much emphasis on driver safety record, due to the fact that numerous accidents would cause rates to go up anyway.

For these programs, companies are more interested in the total amount of time you have purchased your insurance from them.

In theory, the longer you’ve been with them the greater the discount available.

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Offsetting the Regular Rate Increases

Unfortunately, one of the realities of the insurance industry is that rates generally go up from year to year.

Although car insurance rates from some companies have dropped slightly in recent years, they are normally on an upward trend over the course of 10 to 12 years.

That means a customer loyalty discount could offset premium increases from year to year.

For that reason alone it might be worth it to stay with your current car insurance carrier as long as possible.

According to statistics, the lowest risk drivers on the road are those between the ages of 36 and 55.

And since lower risk means lower car insurance rates, it is conceivable that a 50-year-old driver who has been with the same insurance company for 20 years could pay among the lowest car insurance rates in the industry.

That driver’s safety record, combined with a customer loyalty discount, could also mean that the rates he pays during those few years will be the lowest he’ll pay in his lifetime.

Referring Others

Another way some customer loyalty programs work is to provide discounts to drivers who refer others to the company.

This is also not a new practice in the business world. Companies have been offering referral discounts in all sorts of industries from carpet cleaning to car repairs to cell phone service.

Such programs are so successful that it’s reasonable car insurance companies would get on board too.

If your car insurance company offers this type of customer loyalty car insurance discount, it may require your referral continues with a policy for a certain amount of time.

For example, your insurance company may not allow you to take the discount if the person you referred drops his or her policy after the first six-month term. When insurance providers implement restrictions like this they are designed to ferret out undesirable referrals.

If you’re a good salesperson, you could potentially save a lot of money by referring your family and friends to your insurance company.

If you’re not sure what your provider currently offers, take a few minutes to contact them and ask. You might be surprised to find out that you’re eligible for some discounts that you are not currently taking.

Before deciding on your auto insurance carrier, enter your zip code below to compare car insurance rates from top companies in your area today!

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