Looking at New or Changing Auto Insurance Products
Competition is making insurance companies more inventive
The auto insurance business in the United States is highly competitive, with companies large and small. As for the guys who sell the insurance, it is estimated that up to 95 percent of them fail in their first year. But, of course, companies go on competing because the market is huge.
The benefit for the driver is that companies compete fiercely on rates, but, also, other features of insurance. Something new is always being offered to set a given insurance product apart from its competitors. What are some of these new features—and do they save the driver money?
Discounts as such are as old as auto insurance, of course, but now there are more than a dozen different types of discounts. Not everyone is eligible for all of them; some are narrowly focused on one group or another.
The "up to…" offer. One reminder before we begin. A common way to advertise a discount is to say there is "up to a 35 percent discount!" That means that there is a range of discounts, and for the most eligible drivers—the "best in class"—the discount can be as much as 35 percent. There is no guarantee you will be eligible for that best deal. An insurance specialist can help you.
The "offer" your state requires. Also, be aware that some states are now mandating certain discounts, so all companies are required to offer them. New York State encourages drivers to take a defensive driving course. If they complete it, they earn a 10 percent discount on their collision and liability coverage for the next three years. It is a handy thing for insurance agents to offer when the customer asks: Isn't there some way to lower my insurance?
The cap on total discount. As you explore discounts and start to add up the percentages offered, it may be exciting. But insurers often cap the total discount (all discounts combined) a customer is permitted. For example, up to 25 percent.
Some newer car insurance products
We mentioned this one, above, earned by taking an approved course. Here, we will add that this may apply only to drivers of a certain age (50 plus). Not all states mandate this discount, and usually it is not more than 10 percent.
As cars acquire new safety features, some earn car safety discounts. Anti-lock brakes, airbags, and daytime running lights are examples. Some of these discounts apply only to part of your coverage, such as a percentage of medical payments.
Anti-theft discounts have evolved with new technology, but they remain common because four out of five stolen cars are gone forever. There are devices, now, that can improve your chances of recovering the car. Buying a car with them or having them installed later can mean a discount. One type of anti-theft system makes use of GPS to locate the stolen vehicle. Some models come with systems like OnStar that can prevent your car from being restarted. Other stolen vehicle recovery systems use radio signals to your car's transceiver to locate it. A way of discouraging thieves from bothering with your car is permanently engraving your Vehicle Identification Number (VIN) in the glass of your car's windows. If thieves are going to sell your car to a normal dealer, they first must replace all the windows.
Most major car insurance companies now offer some form of accident forgiveness because drivers worry that reporting an accident will drive up their rates. One at-fault accident can increase your rate by as much as one-third. Insurers define and apply accident forgiveness in different ways, but essentially it prevents your rate from going up after your first accident. Sometimes accident forgiveness is a reward for a good driving record. Also, accident forgiveness may vary from state to state. In some case, accident forgiveness is something you pay to have in your policy. It differs by company. Ask an insurance specialist what is available to you.
A variation on the common good driver discount is the "Good Student Discount" for a full-time high school or college student with good grades (at least a B average). A related discount is one you may get if your student is away at school without a car. There are some eligibility requirements like the student being under age 25 and more than 100 miles away.
Some insurance companies will give you a discount if you pay your entire annual insurance bill up front. If you permit your insurance company to make automatic withdrawals of installments from your account, you may get a small discount. Another small discount may be offered if you will go paperless, receiving policies and bills online. An insurance company may give you an incentive to get an online car insurance quote and sign up online.
We mentioned narrower discounts for some groups. A few big insurance companies offer teachers discounts, and others offer discounts to members of the armed services.
Insurance companies go after attractive customer groups like college alumni or members of professional organizations.
A new and growing discount is made possible by technology that wirelessly monitors how often and how far you drive. You also must demonstrate good driving habits.
Ask Select My Insurance for more information
For additional information about these and other discounts on your automobile insurance—including eligibility, size of discounts, and best offers--contact a specialist, here. Or fill out the brief form on this site, so we can get in touch with you. There is no obligation, of course, but some big opportunities to save.
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