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Are car insurance loyalty discounts worth it?

You could score car insurance savings for being a loyal customer, but watch out for rates that creep up every year.


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Typically shopping around and comparing options will ensure you find the best deal. But if you’re happy with the car insurance you have, staying with your current provider could pay off before you know it.

How do I get a loyalty discount?

Unfortunately, most car insurance providers don’t advertise how long you need to be with a provider to see loyalty savings. Expect a time range of three to five years or more before the loyalty discount kicks in. You may want to call your current insurance company to ask them if you qualify or how long you’ll need to stay loyal to get the discount.

Many providers also offer a renewal discount. Similar to the concept of a loyalty discount, this is something you receive when you renew your coverage with your provider rather than moving your business elsewhere.

How much can I save on car insurance with a loyalty discount?

Car insurance discounts vary by provider and location. If your provider offers a break for sticking around, expect discounts in the 15-20% range. Some providers, such as Geico, advertise a discount of up to 30%.

Which companies have the best loyalty discounts?

Compare a few popular providers who offer discounts to loyal customers, depending on where you’re located.

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Is a loyalty discount worth it?

Not always. Sometimes staying with an insurance provider for an extended amount of time can cost you more than switching providers. You can usually get better insurance rates by switching providers because it gives you more negotiating power. Or, you can ask for new rates from your current provider every year or two.

However, if you meet the requirements of the loyalty discount because you’ve been with the company for several years, you might also qualify for no claims discounts, rate lock and accident forgiveness. But, even with perks like rate lock, which often guarantees your premiums for a year, your insurance rates tend to increase periodically from added fees and price optimization.

What’s price optimization?

The highest cost of not switching is because of something referred to as price optimization in the insurance industry. It’s a nice way of saying insurance providers will increase your rate by small amounts over the years.

It’s not optimizing anything for the customers. Price-optimized increases are gradual, creating a little extra cash flow for the insurer without scaring customers away with a sudden jump in costs. Think of it as insurance inflation for your premiums. If you got a notice in the mail about a small rate increase, a tiny bump in cost probably isn’t going to make you go through the effort of switching to a new provider.

Say you were paying $1,100 annually before, and the next year you’ll be charged $1,175. With an increase like that, you would probably pay an extra $5 or $10 a month. You might not realize you’ve seen the same increase every year, so what you thought was a good deal on insurance is now higher than market prices.

Which states ban price optimization?

Some states have decided to ban price optimization and any rating techniques that are not risk-based to protect consumers from price gouging.

You might not experience the effects of price optimization if you live in Maryland, Ohio, California, New York, Florida, Vermont, Washington, Indiana, Pennsylvania, Maine, District of Columbia, Rhode Island, Montana, Delaware, Colorado, Minnesota, Connecticut, Alaska, Missouri or Virginia.

Since most Americans are required by law to have auto insurance, these states feel it’s unfair for insurance companies to increase premiums based on how unlikely it is for a consumer to change companies over a small increase.

Get a new car insurance quote and save

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
All 50 states
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
AZ, CA, IL, LA, OH, TX, UT and WI
Get instant online support and score a low rate thanks to online data that sets premiums automatically.
The AARP Auto Insurance Program from The Hartford
All 50 states & DC
Drivers over age 50 can enjoy low rates and perks designed for mature drivers, plus freebies and AARP member perks like free replacement cost coverage.
All 50 states
Your dedicated agent can help you find the best savings with multiple discounts and rewards programs.
All 50 states
Roll in a variety of car insurance quotes from top insurers despite a high-risk driving profile, and view possible discounts while you’re at it.
All states except AK, DE, HI, MT, NH, VT, WY
Take advantage of this online company's low base rates and mobile tools like app-based telematics and teen safe driver programs.

Compare up to 4 providers

Should I stay or should I go?

Once you know what kinds of loyalty discounts your provider offers, hold your provider to that number and watch for other increases to weigh out your actual savings from loyalty discounts.

Because some providers use rate optimization, you might get a loyalty discount and still wind up paying more than you would if you switched providers.

To make sure you fully understand the details of what you’re paying for, speak with your agent or call your insurance company directly.

Bottom line

Loyalty discounts can offer significant savings on your car insurance but are unlikely to beat out the benefits of shopping around and taking good offers from other providers.

Monitor your annual insurance costs and watch for any increases that don’t seem warranted, as that could be a sign of price optimization. And if you’re feeling the effects of price optimization, it could be time to see what else is out there.

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