This essay discusses the possible discounts that are available to auto insurance consumers. The article is also about certain discounts that auto insurance consumers must not be asked for. Since insurance is a jurisdictional subject, some of the discussion topics here pertains issues related to the auto insurance consumers for car insurance in the State of Illinois.
Legal Vs Illegal Allowances. Using rebates in the insurance business is severely prohibited.
If and when an insurance agent, not the insurance company, returns any part of their commission to the customers to 'induce' them to buy from the agent then a rebating has occurred. For examples, if the insurance representative gives the customer a gift card worth $25 for buying a home insurance policy then this is rebate, and is strictly illegal. If the agent offers a $5 lunch card for anyone asking for a car quote, or a nice pen for home quote then this is not rebate buying is not required. Any materialistic amount given to the customers in return of them buying a policy is always rebate. Both the agent and the buyer (if s/he knows) are breaking the law if they are committing rebating.
If the home office of the insurance company returns a portion of the premium to the client (ie. lower risk, etc.) then this is not a rebate. In many instances this is called Discounts. There is no breaking of any law here by either the client or the company Actually discounting is a common practice in situations with intense competition.
In large metropolitan areas like Miami or Chicago, competition between auto insurance companies is severe. There are many insurance companies and thousands of agents and insurance agencies who are competing against each others. Clients should never ask for or accept offers of 'discounts' beyond what the main office of the automobile insurance company grants.
Possible Discounts for Clients of Auto Insurance Companies in Chicago, Illinois
1. Prior insurance discount. Clients may get about 10% if they prove that they had prior insurance without interruption for at least 6 months. Depending on the insurance company, your prior policy must not have lapsed more than a month ago. The longer you had your insurance, the more discount you get. You need to present a proof, an original proof, from prior insurance company. Statements made by your agent or temporary papers are not good enough. The proof has to be in the form of valid insurance ID card made by the prior company, not agency, itself, or a declaration page of your contract.
2. Multiple car discount. If you insure more than one vehicle you get a 5% to 10% discount. Remember that you cannot have your next door neighbor, or partner, under your policy. The person insured on the policy has to have 'insurable interest' in the car we are insuring, ie must be titleholder or spouse.
3. Discounts for owning a home. Owning a condo or a home may qualify you for a discount. Companies normally ask you for a proof (mortgage payment or home insurance policy) as evidence of ownership of a residence. In the event of you owning a home under your sister's name, this may not qualify you for this discount.
4. Packaged policies discount. Insuring more than one policy with the same insurance company can earn you discounts. For example, if you buy a home policy or condo insurance policy with the same company you may be entitled for a discount on your automobile insurance policy. Certain insurers provide deep discount on these auto and home packages.
5. Discount for part time drivers. This discount is normally sought for youthful drivers (under age 25) in situations when the number of adult drivers is equal to or more than the number of vehicles insured. Some companies will allow a 'occasional' status for the youthful operators in those situations, and a discount is offered.
6. Discounts for good grades. This discount is available with standard and preferred companies for insured students who have high GPA their school. The discount is about 5% of the liability premium of the vehicle that is assigned to that specific good student operator.
7. Security alarm discount. This is another limited discount of about 5% on the premium of the comprehensive only (not liability or collision premium). Most companies give this discount automatically because most vehicles come with a security alarm anyways.
8. Other miscellaneous discounts such as antilock brake system, air bags, etc. Most of these are minimal discounts and most rating systems already include them in the final price.
