Auto Insurance Discount: Asking For Beyond Boundaries May Be Illegal

This essay discusses the possible discounts that are available to auto insurance consumers. It also discusses the one discount that consumers should not ask for.Because insurance regulations deviate from state to another, any issues here is specific to the car insurance in the State of Illinois.

Legal Discounts Vs Illegal Rebates. Unlike many other businesses the insurance business totally disallows the practice of rebate.

Rebating appears when the agent, not the insurance company, provides some or any valuable share of his/ her commission to the people to 'stimulate' them to purchase insurance. For examples, when an insurance agent gives back a $25.00 gift card for consumers who buys car insurance policy from him or her, then this is rebating, and is strictly illegal. If the agent offers a $5 lunch card for anyone getting a car quote, or a nice pen for home quote then this is not rebate no purchase necessary. Any materialistic amount given to the clients in return of them buying a policy is always rebate. An insurance agent and a purchaser (if s/he knows) are breaking the law if they are committing rebating.

If the main office of the insurance carrier provides a portion of the premium to the customer (ie. rewarding customer for good management style, etc.) then this is not a rebate. The proper term to express this legal act is discounting. Neither the client Actually discounting is a common practice in situations with intense competition.

In larger cities like NY or Chicago, competition between car insurance companies is strong. There are many insurance companies and thousands of agents and insurance agencies who are competing against each others. Consumers should never ask for or accept offers of 'discounts' beyond what the principal office of the car insurance company offers.

Discounts Offered for Chicago Car Insurance Quotes Shoppers

1. Prior insurance discount. Companies may give you about 10%, more or less, if you had prior insurance, continuously for a minimum of six months. Depending on the insurance company, your prior policy should not have lapsed more than thirty days ago. The longer you had your insurance, the more discount you get. You need to present a proof that you carried the car insurance. Statements made by your agent or temporary documents 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 policy.

2. Multiple car discount. If you insure more than one vehicle you get a 5% to 10% discount. Bear in mind that you cannot have your next door neighbor, or best friend, under your policy. The named insured on the policy has to have 'insurable interest' in the auto we are insuring.

3. Discount for owning own residence. Owning a condo or a home may qualify you for a discount. Insurance carriers normally ask you for a proof (mortgage payment or home insurance policy) as evidence of home ownership. So if you own a house but the mortgage is under the name of your uncle not qualify you for this discount.

4. Multi policy accounts discount. Insuring more than one policy with the same insurance company can earn you discounts. Example, if you buy a life policy or condo insurance policy with the same company you may qualify for a discount on your auto insurance policy. Certain companies provide deep discount on these home and auto packages.

5. Discount for occasional operator. This discount is normally sought for young operators (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 'part time' status for the youthful operators in those situations, and a discount is given.

6. Discounts for good student. 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 driver.

7. Discount for having security system. This is a small 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. Miscellaneous discounts such as antilock brake system, air bags, etc. Most of these are minimal discounts and most rating systems already reflect them in the final price.