Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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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 5, 2020

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Here's what you need to know...

  • If two or more individuals in your home need auto insurance coverage, you may be able to take advantage of a family plan to save money on your premium
  • The requirements for a family discount may vary by provider, so it is important to find a provider who has qualifications that you meet
  • Car insurance companies may also offer you a discount for bundling your coverage and for many other factors

An auto insurance premium can be a rather large expense in your budget when you are the only driver insured on your policy, but the expense can multiply when you add other drivers to it.

The good news is that some providers offer a family plan discount that can help you to save money on the coverage you need.

By learning more about what this type of discount is and how to take advantage of it, you can more easily save money on your family’s car insurance premium.

Compare car insurance quotes using our free rate tool above. It’s an easy way to find out how much money you could save on your premium.

Table of Contents

Saving Money on Car Insurance With a Family Plan Discount

The qualifications for a family plan discount may vary by provider. For example, some auto insurance providers offer this discount when you have two or more drivers on the same plan. Others offer it when you have at least three drivers on the plan.

In addition to variations in the qualifications for this discount, there are also variations in the discount’s value to you.

With some providers, the discount may only equate to a few dollars difference on your premium, but other providers may offer a much more substantial discount.

Remember that this is only one of many discounts that car insurance companies offer, and you may maximize your savings by exploring and taking advantage of multiple discounts.

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Why Some Providers Offer This Type of Discount

Providers determine your auto insurance rates by analyzing their risk associated with insuring you and the vehicle. They also take into account their administrative expenses associated with servicing your account.

When you wrap multiple drivers under one policy, you decrease the administrative overhead that auto insurance companies have related to your overall coverage. The discount is a way for the insurance companies to pass this savings on to you.

You may also qualify for savings based on lower administrative fees when you insure multiple vehicles under a single policy. Some insurance companies take this into account with their family plan discount, but other providers issue a second discount for insuring multiple vehicles.

How Adding Drivers to Your Coverage Affects Pricing

Buying car insurance for all of your family’s drivers can be expensive, and one reason for this is because some of your drivers may be considered riskier to insure than others.

There are many factors that auto insurance companies review when determining your rates, and these factors may be reviewed for each driver on your policy:

By adding more drivers who may have different risk factors to your coverage, you should expect your premium amount to be higher than if you were simply insuring one driver and one vehicle under the policy.

Other Discounts Your Family May Qualify For

The family plan discount is only one of multiple discounts that you may qualify for. This discount typically applies to your entire premium, but some drivers may individually qualify for other discounts that can reduce the overall premium cost. This includes:

  • A good student or distant student discount
  • A safe driver or claims-free discount
  • An infrequent or low mileage discount
  • A military veteran discount
  • A senior citizen discount

Who to Buy Car Insurance From

Before you can take advantage of a family plan discount and other possible discounts available through some insurance companies, you need to know who to reach out to for quotes.

With dozens of providers to choose from, you need to find an effective way to narrow down your options. One thoughtful strategy is to eliminate providers who are not strong from a financial standpoint and who have a low customer satisfaction rating.

You can easily research these qualifications online before you request quotes for your coverage.

When You Add a Teen Driver to Your Coverage

Many family policies have a teen or young adult drivers. Because these drivers lack experience behind the wheel and are statistically more likely to be involved in accidents, adding a teen driver to your existing policy can be expensive.

Nonetheless, it may be one of the more affordable options to consider when insuring a young driver.

Because your insurance rates can change dramatically when you add a new driver, a new vehicle, or both to your coverage, you should consider shopping around for new rates before you buy your coverage.

This simple step may help you to qualify for more discounts and set up more affordable coverage.

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Choosing a Safe Car

The car that your teen drives can play a major role in insurance costs as well. While the family plan discount can save you money, you may also want to find a safe vehicle that is more affordable to insure.

Car insurance companies take into account multiple vehicle-related factors to determine insurance rates:

  • The safety and security equipment in the vehicle
  • The power of the engine
  • The car’s replacement value and repair cost

You may request quotes from several providers on a vehicle before finalizing your buying plans. These quotes will help you to more easily identify the most affordable vehicles to insure.

Safe Driving Tips for the Whole Family

Most drivers can benefit from improving their driving habits on the road in some way. By doing so, you may decrease the number of claims you need to file against your family’s policy, and you may be able to avoid serious injuries.

These tips can help you and your loved ones to stay safe on the road:

  • Avoid speeding, and always drive at or below the posted speed limit.
  • Pay attention to all road signs.
  • Do not drive when you are feeling upset or emotional.
  • Minimize distractions in the car. For example, place your cell phone out of reach so that you are not tempted to reach for it, and avoid eating in the car.
  • Do not drive when road conditions are bad unless absolutely necessary.
  • Schedule regular maintenance service for all of your family’s vehicles.

While you may be focused on setting up affordable coverage for your family, you also need to focus on the type and limits of your coverage.

The best car insurance policy for your family is one that is both fully protective and affordable, and you can more easily find the right coverage when you spend time comparing the options thoroughly. Enter your zip code below to compare today!