How safe driving discounts work and how much they can save you

For many, car insurance rates have become cripplingly high. Across the U.S., "the average cost of full coverage car insurance rose to $2,543 in 2024, an increase of 26% over last year," said Bankrate. This means that "with a national median household income of $74,580 according to the latest data from the U.S. Census Bureau, Americans spend 3.41% of their income on car insurance."

One way to pay a little bit less on auto insurance? A safe driving discount.

What are safe driving discounts?

Generally speaking, a safe driver discount is a "discount your car insurance company gives you for, well, driving safely," said Policygenius. That said, exactly what type of discount a "safe driver discount" refers to can vary a bit, depending on your insurance company.

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For instance, one type you may be able to get is usage-based insurance (also known as telematics insurance), which "monitors your driving — usually via mobile app or a device installed in your car — and offers you discounts based on your performance," said ValuePenguin.

Additionally, "many major companies offer discounts to drivers who have had no accidents in the past three to five years" or who have not had any traffic violations within that time period, said ValuePenguin. Some companies also "combine the accident-free and violation-free rewards, offering a single safe-driving discount to drivers who have avoided incidents and accidents within the past three to five years."

How much can you save with a safe driving discount?

Exactly how much you can save depends on your insurance provider, but "in general, drivers with good records can save anywhere from 10% to 30% on car insurance premiums," said ValuePenguin.

More good news: It is "possible to save much more if you can qualify for more discounts on top of that," said Policygenius. For instance, "if your insurance company allows it, combining an accident-free or claims-free discount with a telematics discount, a good student discount or a safety feature discount could save you much more."

Are there any downsides to safe driving discounts?

If you participate in safe driving monitoring and the results do not bode well, there is the chance your rate could go up — rather than down. While Nationwide, State Farm, and USAA all said that "premiums are not raised as a result of telematics data … Allstate, American Family, Farmers, and Travelers, however, all indicated there could be a rate increase if the app rated you as an unsafe driver," said CNBC Select. It is also possible to see a rate increase with Geico and Progressive.

There is also the possibility that your data could be sold: "Depending on your insurer, telematics information can be shared or used for other purposes, including marketing," said CNBC Select. Further, even a "company that doesn't share or sell your data may still be required by law to comply with a subpoena, court order or law enforcement request."

How can you get a safe driving discount?

The first step to getting a safe driving discount is to ask whether your insurance provider offers one, and if so, what type of discount is available.

Keep in mind that it is often necessary to enroll for the discount "within the first few weeks of their policy going into effect," said CNBC Select. Otherwise, the "full discount usually isn't available until you renew," though "most companies offer a smaller discount just for signing up."