What Is a Claims-Free Discount?

Last Updated on July 8, 2021

When signing up for car insurance, there are a number of different discount options you might see. Maximizing the number of discounts you qualify for is a great way to save money on your car insurance in the long run. A claims-free discount is one type of discount that your insurance company might offer. Here’s how claims-free discounts work and how you can get one.

Claims-Free Discounts Explained

A claims-free discount is a discount for drivers who have never had an accident or filed a claim on their car. The exact amount of the discount, as well as the requirements you must meet to qualify for it, can vary by insurance company.

Insurance companies offer these discounts to reward their safest drivers and most loyal customers. Since you haven’t ever filed a claim, you have saved the insurance company money, and they are passing these savings on to you. These discounts help encourage loyalty among customers as well.

How Do Claims-Free Discounts Work?

Each insurance company has its own rules and policies, so the exact details of your discount will vary depending on which provider you use. For example, some companies only offer these discounts in certain states or for certain types of car insurance policies. However, these discounts will usually save you anywhere from 10 to 30 percent on your car insurance policy. The discount may start on the lower end of that scale, but increase over time as you maintain your claims-free status.

You won’t get the claims-free discount right when you sign up for car insurance – you’ll need to earn it over time. You’ll usually need to have held your insurance policy for three to seven years without any claims in order to qualify for it. Some insurance companies will only offer this discount if you have been with their insurance company for this extended period of time. However, there are some insurance companies that will give you this discount if you have been with any insurance company for this long without a claim. In this instance, you’ll need to be able to prove that you were claim-free with another insurance company.

What Counts as a Claim?

In order to make sure you remain claims-free, you’ll need to understand what exactly qualifies as a claim to your insurance company. Some insurance companies will count any type of claim against you, while others will only count certain types of claims. There are many states that actually have laws mandating what types of claims count towards a claims-free discount.

In many places, emergency road service claims or glass claims won’t count against you for a claims-free discount. There are also places where claims on your comprehensive coverage that are less than $1,000 won’t count either. Comprehensive insurance covers things like weather damage, vandalism, and other damage that isn’t the result of a collision. The logic behind these claims being exempt is that they didn’t happen as the result of unsafe driving behaviors.

There are other situations in which you may not lose your claims-free discount after an accident as long as you are found not to be at fault. At-fault laws vary by state and can be very complex. However, if insurance inspectors determine that you weren’t at fault in the accident, the other driver’s insurance company will usually pay the damages. Since you didn’t cost the insurance company any extra money, you’ll get to maintain your discount.

It’s always important to check your insurance company’s specific policies, as well as the laws in your state. Knowing the details of your policy can help prevent confusion later on. There are some times where filing a claim will be unavoidable, but in general, knowing how your policy works can help you make the best decision possible when it comes to filing a claim.

How Do I Get a Claims-Free Discount?

Getting a claims-free discount should be a very simple process. Most insurance companies will automatically apply the discount to your policy once you qualify for it. However, if this doesn’t happen automatically, the easiest way to get the discount applied is to call your agent or your insurance company’s customer service line. They will be happy to apply the discount for you if you qualify.

When signing up for a new insurance policy, it’s always important to ask for a full list of discounts you might qualify for. You might be surprised by just how many discounts insurance companies offer that they don’t necessarily advertise. Even small discounts can add up over time and save you quite a bit of money.

Tips for Avoiding Claims

Of course, there are always going to be times when you need to file a claim in order to cover expensive repair or medical bills. However, if you have a significant claims-free discount or are on your way to getting one, you’ll want to make sure that you’re avoiding filing unnecessary claims. Not only will filing a claim jeopardize your discount in this case, but the base rate for your insurance policy could go up.

The best way to avoid filing a claim is to reduce your risk of getting in an accident. This means making sure that you’re always driving as safely as possible. You may want to consider taking a defensive driving course to brush up on your skills. Additionally, you can reduce your chances of getting in an accident by reducing the amount of time you spend in the car. Taking public transit and carpooling when possible can make a big difference.

If you do get into a small accident, consider whether it’s truly necessary to file a claim. There are many cases where it makes more financial sense to pay for repairs out-of-pocket and maintain your discount, rather than file a claim. In this situation, you may have to do a bit of math to weigh the pros and cons of each option.

A claims-free discount is a great incentive to maintain a good driving record. Over time, this discount can save you a significant amount of money on your policy.