What Is a Good Payer Discount?

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Your choice of insurance providers will often depend on your answer to the question, “What’s in it for me?” As you shop for the right insurance provider for your needs, certain perks and discounts arise that you can’t pass up. A good payer discount could be one of them.
What does it mean to have a good payer discount? How do you find an insurer that offers you this kind of deal, and what do you have to do to get the discount? Here’s what you need to know.

What Is a Good Payer Discount?

When you sign up for a car insurance policy (and possibly some other types of coverage) you commit to paying for your premiums on time. That might be on the first of every month, quarterly, or annually. It’s a financial agreement that can cause a lapse in coverage and costly penalties if you break it.
But did you know that some insurance companies actually reward customers who pay on time? That’s what a good payer discount is all about. If you consistently pay your insurance premiums when they are due or earlier, certain insurance companies will give you a lower price on your insurance.
In the terms of your agreement, it could be called a couple of different things. Insurers like Travelers and Farmers Insurance call it a Good Payer Discount. Others like Allstate call it a Responsible Payer Discount. No matter which term your insurance provider uses, it offers you a lower price simply for doing what you said you would do: pay on time.

How Do I Get a Good Payer Discount?

For insurers who offer a good payer discount, the criteria couldn’t be simpler to qualify. In fact, you automatically get the discount.
When you sign up for a new insurance policy, you receive the responsible payer discount up front. You’re already on your way to saving money. All policyholders get it at the start of their insurance. However, you lose your good payer discount if you receive a cancellation notice due to non-payment within the previous year.
Essentially, the only way to lose your responsible payer/good payer discount is to not pay for your insurance premiums.
If you maintain 12 months in a row that you pay your premiums on time, you may be able to get your discount back, but you could lose it if you miss a payment again.

Other Types of Payment-Related Discounts

Because insurance companies are trying to entice you to choose them, discounts are offered for a variety of customers. Discounts include:
  • New car discount if your vehicle is the current model year or one year prior and you’re the original owner.
  • Discounts for setting up an automatic withdrawal plan for paying your insurance premium.
  • A discount for paying for your policy premium in full for the year (pay-in-full discount).
  • Safe driving or claims-free discount for customers who haven’t had an at-fault accident in the previous year.
  • Early pay discount for policies issued more than seven days before the policy goes into effect.
  • A good student discount if the insured driver is a student who maintains a certain grade.
Choose your insurance company wisely because not all discounts are available in all states by all providers.