June 24, 2010

Loyalty Discounts And How They Affect Auto Insurance Quotes

Every driver wants to pay as little as possible for car insurance premiums, and the best way to do this without compromising one's insurance coverage is to find as many discounts as possible. Insurance discounts can take many forms, and one of the more popular types of discounts is the loyalty discount. This special type of discount provides customers of a certain insurance company with relief if they've kept a policy in good standing for a certain length of time. They're often applied automatically, so some drivers aren't even aware of the fact that they're getting a loyalty discount. However, there are a few important facts that all drivers should know about loyalty discounts and how they affect an auto insurance quote.

First of all, while loyalty discounts can be significant, it's usually possible to get a comparable discount from a rival insurer. Simply inform the rival insurance agent about the loyalty discount, and they'll usually do whatever they can to meet the new price. Insurance agents want to get as many customers as possible, as you might assume, and in many cases, this means offering great deals–particularly when you can provide proof of their competition's rates.

You should also know that loyalty discounts are illegal in some states, as state insurance commissions often see them as a way to unfairly force customers to keep substandard auto insurance policies. You can check with your state insurance commission to find out whether loyalty discounts are allowed, although insurance companies rarely offer illegal discounts due to the heavy penalties that they may receive. Instead, many insurers in such states offer consistent insurance discounts–drivers with no gaps in their insurance records receive discounts that are fairly comparable to typical loyalty discounts. However, the discount won't be denied if you were insured with another company.

When looking for an auto insurance quote, don't base your decision on a loyalty discount. While they're a useful way to decrease the overall cost of a car insurance policy, they are by no means the only way to do so. Many drivers find comparison shopping websites and alternative discounts (such as discounts for anti-theft devices or for keeping low mileage on a vehicle) to be a better way to save money, and they don't require a driver to keep his or her car insurance policy with a certain company. Think carefully when looking for an auto insurance quote; remember, your goal is to find the best possible coverage that you can afford. While a loyalty discount may help you to do this, it's usually not necessary, and it's nothing to base a policy decision around.