Auto Insurance Loyalty Discount
Although California auto insurance policies will not offer a continuous coverage
discount when changing insurance companies many companies will offer their clients a loyalty discount. These discounts will vary from five to ten percent between companies. Many times that consumer will be eligible for the loyalty discount if they maintain the same insurance policy for at least 12 months.In California all auto insurance rates are reviewed and approved by the department of insurance. Insurance companies are required to comply with the guidelines and rates that are approved by the California DOI. There can be no variations or exceptions to the rates that are approved. This is meant to help ensure that the carriers maintain profitability and are not pricing their policies to a point that could harm the financial strength of the companies or charge higher premiums than what would be appropriate.
With these rates being set consumers should understand that when they are shopping auto insurance policies between carriers it may be a good idea to make the change even with as low as a 10 percent saving on the policy. Since the new insurance company is not able to immediately provide a discount for continuous coverage the rates being quoted for the initial policy term are quoted without any type of loyalty discount.
With this being said, a consumer that changes insurance companies and is expecting an initial savings of 10 percent could easily see a 15 to 20 percent savings after the policy matures and they receive the loyalty discount from their new insurance company. Consumers should keep this in mind and think of the long term saving of changing insurance carriers rather than exclusively focusing on the saving during the initial policy term.
Auto Insurance Loyalty Discount
By: Paul Woodward