I received a letter last week from the University of Alabama, Birmingham alumni association. I graduated from there with a business degree, I’ll let you guess when. The letter was to offer me savings of $300 to $400 a year on my car insurance with a company I was with before I started Wise Insurance Group. As an alumnus of UAB, I qualified for an insurance discount.
The number of discounts for home and car insurance has grown over the past 10 years. Insurance companies are competing with each other to win your attention and hopefully your business. Breaking through the clutter of advertisements, traditional or electronic, is an increasingly difficult proposition so sometimes it takes an offer of a discount to see if you’ll take a moment to compare.
The discounts available from many carriers for home insurance policies include:
- New home
- Green home
- New purchase
- Gated community
- Limited access community
- Hail resistant roof
- Monitored alarm
- Fire extinguisher
- Home updates (new roof)
- Retired homeowner
When it comes to car insurance, the discounts include:
- Passive restraints
- Airbags (front & side)
- Daytime running lights
- Security system (alarm, active, passive)
- 4 wheel anti-lock brakes
- Good driver / accident free
- Good student
- Driver’s education
- Defensive driving
- Mature driver
There are payment discounts based on whether you pay the premium in full or elect to have the payments made by scheduled electronic funds transfer. Also available are affinity discounts for having attended a specific school, working for a certain employer, or being a member of a credit union. The most interesting discount I’ve seen lately was one for “liking” the company on Facebook.
The question that begs to be asked: do these discounts mean anything? The answer: it just depends. As an insurance agent, I believe one of my responsibilities is to look out for my clients’ wellbeing. Part of that is to make sure each client has the right insurance to protect them against something going wrong. I also believe it’s my responsibility to help them pay only what they need to for their insurance, so I look for every discount that’s available to them.
I truly believe no one should pay more than they have to for insurance regardless of type. The dizzying array of discounts sometimes sends the wrong message by setting up an expectation that every client is going to save hundreds of dollars by switching. Sometimes that’s true but sometimes it’s not. There may be accidents, tickets, prior claims, a low credit score or a several other reasons that cause people to pay more for insurance. Or it may mean that the carrier does not have a competitive rate regardless of the available discounts.
If you’re comparing insurance, the question isn’t whether carrier A offers a specific discount that carrier B offers. Ultimately, when comparing rates between two companies ask which one provides the best coverage for the best rate? Then who’s going to be easier to work with when a claim occurs? Sooner or later, we will all have a home or car claim and having a company stand with you is as important as what you pay for your insurance. Having an agent that has more than one option can also be helpful!
What’s the most interesting discount you’ve seen? Share your observations, experiences and questions with us on our Google + and Facebook pages or in the comments section of our blog. I’d love to hear from you.