This article will discuss the discounts available to car insurance customers. This article also discusses certain discounts that car insurance customers cannot ask for. Because insurance laws vary from one state to another, any issues are specific to Illinois car insurance.
Legal Discounts vs Illegal Rebates. It is strictly forbidden for insurance producers to use rebates in their business practices. Insurance companies may offer discounts.
Rebating occurs when insurance agents , not the insurance company, give back any portion of their commission to clients to ‘elicit them to buy’ from the agents. This is, for example, when an agent offers $25.00 gift cards to customers who purchase car insurance policies from him/her. It is illegal and rebating. This is not considered rebate buying if the agent gives a $5 lunch card to anyone who gets a quote for a car or offers a nice pen for a home quote. Any amount that is materially given to buyers in exchange for them purchasing a policy is always rebate. If they are rebating, an insurance agent or client (if they know) is breaking the law.
If the home office of an insurance company gives back any premium, or gives the client a break on their premium, it is not considered a rebate. This lawful act can be called discounting. In situations of intense competition, discounting is common.
Competition between car insurance companies can be severe in larger cities, such as New York or Chicago. There are many insurance companies, thousands of agents and agencies competing with each other. Customers shouldn’t accept or ask for discounts beyond what is allowed by the headquarters of their automobile insurance company.
Discounts available to clients of Chicago-based car insurance companies (The Legal List Of Discounts You Can Ask for:
1. Prior insurance may qualify for discounts. Clients can get discounts of up to 10% if they show proof that they have had prior insurance uninterrupted for at least six month. Your prior policy must not have expired more than 30 days ago, depending on which insurance company you choose. The discount rate will be higher if you have had insurance for longer than 30 days. A proof from an insurance company is required. Your agent’s statements or temporary documents will not suffice. You must provide proof in the form of a valid insurance ID card from the prior company and not the agency.
2. Multi-car policy discount. Get 10% off if you have two or more vehicles covered under the same contract. Keep in mind that your policy cannot cover your neighbor or partner next door. The policy must name an insured who has an ‘insurable right’ to the automobile we insure.
3. Homeowner discount. You may be eligible for a price cut if you own a house or condo. As proof of residence ownership, insurance companies will usually ask for proof of mortgage payment or home insurance. This discount may not be available if you have a house in the name of your cousin.
4. Multiple policies can be eligible for discounts (package policy, multi-account discount strong>) Insuring multiple policies with the same insurer could result in discounts. If you purchase a condo or life insurance policy from the same company, you might be eligible for a discount on your auto insurance policy. These packages include auto and home insurance.
5. Discount for part time drivers. These discounts are usually applicable when the number of adult drivers exceeds the number of vehicles. In these cases, some companies will grant a “occasional” status to the young drivers and offer a discount.
6. Discounts for good students. These discounts are available to insured students with a high GPA at their school. This discount equals about 5% of vehicle’s liability premium that has been assigned to a good student operator.
7. Discount on auto security system. This is a limited discount of approximately 5% on the comprehensive only premium (not liability premium or collision premium). This discount is usually automatically given by most companies because vehicles already come with a security system.
8. Miscellaneous discounts like antilock brake system and air bags are also available. These are usually minor discounts, and most rating systems include them in the final premium.