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: May 22, 2020

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Here's what you need to know...

  • All insurers give their customers discounts to help make premiums more competitive to the qualified drivers
  • Some discounts are given for being claim-free or violation-free, but not only good drivers get discounts
  • One popular discount that is given to customers who stay with their carriers long-term is the loyalty discount
  • The loyalty discount is available on renewed terms when you’ve been a company long enough to qualify
  • Most companies give larger loyalty discounts as you renew your policy depending on how long you’ve been a customer
  • Some companies that offer this discount include Amica, Geico, and USAA.


Many people in search of a love connection say that loyalty is one of their favorite traits in a partner. If you ask a hiring manager what they’re looking for in a good candidate, loyalty would probably be on the list as well. Believe it or not, auto insurance companies want the same thing in their policyholders, that’s why they offer discounts.

Insurance discounts are something you should always aim to get. You can’t control your eligibility for some discounts, but there are some that are completely within your control. Loyalty can pay off when it comes to your auto insurance premiums.

If you’re about to shop around for auto insurance, learn about loyalty discounts and how switching to a new carrier could affect your current savings. Use our FREE insurance comparison tool above to get free quotes!

Table of Contents

Who is eligible for a loyalty discount?

There’s a long list of discounts that you’ll have to learn about when you’re shopping around for the best plan at the best price. Each of these discounts serves their own purpose and will have different eligibility requirements.

If you stumble across the loyalty discount, you automatically save just for saying that you’re inherently loyal by nature.

To receive any type of loyalty discount from any type of property insurer, you have to demonstrate that you’re loyal before any savings is applied. It’s like showing the company rather than telling them.

To show them how loyal of a consumer you can be, you’ll have to stay insured with the carrier for a specified number of terms. After you’ve stayed for the period required, the discount is applied.

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How long do you have to stay with the insurer?

There’s no telling how long you’ll have to be insurance with a carrier before you’ll save. Since the rules are enforced differently from carrier to carrier, you will have to either look up the company’s policy yourself or ask the agent you’re working with how many terms you’d have to renew before the discount would be added on.

Even though each insurer has a different rule surrounding the loyalty discount, a majority of the big-name companies that you see advertised all over TV and your community will offer something if you decide not to be a habitual switcher in the insurance community.

A survey revealed that about one in three companies offer this type of savings. It’s not an exhaustive list, but here’s a list of some of the bigger companies with loyalty discounts:

  • State Farm
  • Progressive
  • Farmers
  • USAA
  • Nationwide
  • American Family

How long do you have to be with the insurer?

All of the companies that offer loyalty discounts set their own requirements. While it’s usually up to the insurer to decide whether or not to cut personal rates down a notch, the eligibility criteria must be the same for each and every policyholder regardless of how much their premiums are or what risk class they are in.

This rule is set in place by the Department of Insurance to protect consumers. How long you must keep your policy all depends on the length of your current term and the company’s rules.

Usually, the company will start to offer a small discount after you’ve been insured continuously for one year. With other more rigid requirements, you might have to renew for two to three years before seeing the savings. You’ll have to check with your insurer.

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What is the average savings?

Loyalty is rewarded through some of the best carriers. There are still a few carriers that don’t reward consumer loyalty because they offer lower rates from the start. After surveying the total amount of loyalty discounts in the industry, Market Watch calculated that the average annual savings are $46 or 6% off the total policy premium.

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Does the discount grow over time?

Most discounts will stay the same for as long as you receive it. One of the interesting things about the loyalty discount is that it can get bigger over time. The first year, your discount might only be 5 percent of the premiums but after 3 to 5 years, that total discount could grow to 10 percent.

When will the loyalty discount be applied?

You won’t see a loyalty discount on your initial quote or anywhere on your first term’s declarations page. That’s because it’s not applied until the first renewal after you’ve satisfied the time period that the company requires.

If you have to be with the insurer for a continuous year, you’ll have to have a policy for either two six-month terms or one annual term that never had any lapses. On the next renewal declarations page, you should see your new discount.

Do you get a discount for being loyal in the past?

If you’ve been loyal to your past insurer years, it’s scary to think of losing those savings because you want to switch carriers. Fortunately, many companies will give you a form of loyalty discount for staying with your past insurer for so long.

This type of coverage is called a Continuous Coverage discount or a Prior Insurance discount. You’ll need proof that your insurance from the previous carrier did not ever lapse for non-payment.

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Staying Loyal Doesn’t Always Save You

It’s nice to learn that you can receive a discount for simply continuing to do business with your insurer. Unfortunately, many people stick with their insurers because of these discounts and find out later that being loyal can cost you. Since every carrier has different rates, it’s in your interest to find lower rates even if you’re not getting the discount.

How To Price the Cost of Insurance Fast

If you’re not happy with your most recent rate, it’s time to contemplate whether or not you being loyal is really being rewarded. You can easily request comparison quotes online for car insurance in your state.

Make sure you enter information about your previous coverage into the online quoting tool and you may even get a prior insurance discount for being loyal in the past. Don’t miss out on our Free insurance comparison tool below! Just enter our ZIP code and start comparing rates now!