5 Common Discounts for Personal Lines Policies
June 4, 2020Everyone likes to save a few dollars. Even though saving money shouldn’t take precedence over having the correct coverage or dealing with a knowledgeable agent, it is possible to save while also getting a quality and comprehensive insurance product. And, there are common discounts for personal lines policies that you may be eligible for.
Keep in mind that when your insurance agent is going through what appears to be a laundry list of questions when they are getting you an insurance quote, it is to ensure that they are acquiring all the applicable underwriting information in order to provide you with the most accurate quote. Much of this information ends up being used to apply various discounts.
Agents that sell insurance via a consultative approach will uncover most of the details needed to provide you with the maximum amount of applicable discounts. What discounts are available will vary by the insurance carrier. However, being aware of a few of the most common discounts pertaining to personal lines policies (home, auto, etc.) will allow you to double-check if certain discounts are available if you do not see them applied to your quote.
Here are a few of the common discounts for personal lines policies:
1. Advanced Quote Discount
Insurance companies reward customers who plan ahead. Obtaining quotes in advance of your policy renewal date makes the process of writing a new policy easier on your insurance agent and the insuring company that will issue your policy paperwork.
Organized insureds who don’t wait for the last minute are typically more organized and thorough, which translates across other lifestyle behaviors and makes them a more insurable risk for the company to acquire.
For these reasons, some companies reward insureds who get a quote well before their renewal date, about seven or more days in most cases, with premium discounts. This is why requesting a quote early when your policy is coming up for renewal is one of the times you should consider shopping for car insurance.
2. Pay in Full Discount
If you can budget for it, consider paying your insurance premium in full rather than in installments. When you pay in full for the entire policy term, the insurance company needs to generate less billing. Also, there is less likelihood they will lose your policy mid-term to either a competing insurance company or to a non-payment issue with future installments.
Some carriers incentivize paying in full by offering substantial discounts to the total policy premium if insureds elect this payment plan. Even if your insurance carrier doesn’t have a pay in full discount, it is still important to consider paying in full because you stand to save on installment fees that are applied to additional premium payments. This pay in full discount is one of the ways to get the cheapest homeowners insurance.
3. EFT Discount
If you can’t pay in full, ask your agent for their advice as to the best way to set up your policy payments. Most insurance companies will have multiple payment plan options.
Oftentimes, the best way to save money on your overall insurance costs is to set up payments through an automatic electronic funds transfer (EFT) that automatically pulls money from your checking account on a specific day of the month.
Because these types of payments are automatic and the process requires less paperwork and manpower, insurance companies often reduce transaction or installment fees when this type of payment plan is selected.
4. Homeowner Discount
Many insurance companies will offer a multi-policy discount when you bundle more than one policy with the same insurance carrier. For example, insureds who take out a homeowners insurance and an auto policy with the same insurance company are usually eligible for significant premium discounts on each policy. This is one of the benefits of bundling your insurance policies.
Think of this as a sort of “volume” discount. For this reason, it is good to obtain quotes for multiple types of policies with the same insurance company for coverage and price comparison purposes. For example, Company A might be more expensive than Company B for your Homeowners policy. But, their auto insurance product might be much more competitive than Company B’s coverage, which makes the package of policies more cost-effective with Company A than Company B.
Similarly, there are cases where an insurance company may apply a discount to an auto policy even if they don’t write the homeowners insurance for that customer. If the customer is a homeowner, they may be eligible for a discount just because of that. As people age, certain life factors correlate with safer driving at the statistical level.
Things like getting married, having children, and owning a home are indicators of greater life responsibilities and actuarials show that these factors have a relationship to a more cautious approach to life and safer driving. So, some companies have used homeowner status as another policy discount.
5. Association Discount
Both regional and national associations oftentimes seek to provide additional benefits to their membership by partnering with companies to establish discounts that can be obtained by becoming a member of the association. Most people are aware of discount programs such as those that are available at hotels for AAA members.
The same is sometimes available with insurance companies. If you happen to be a member of an organization affiliated with an insurance company, it can lead to some premium discounts. In other cases, the premium discount can sometimes equal or exceed the cost of the membership to the association. In these cases, you might consider joining the association and receiving its other member benefits, the cost of which will be offset by your insurance policy discount.
Bundling multiple insurance policies often makes sense, but these common discounts for personal lines policies are just the tip of the iceberg. Each insurance company has its own pricing structures and discounts available and no two companies are exactly the same. Some insurance companies will use catchy marketing slogans to convince consumers that they are checking, and re-checking, for every available discount.
The truth is, an experienced and thorough independent insurance agent will have multiple insurance companies from which to acquire quotes and they will be able to make sure that all of the discounts have been applied within each company’s rating system so that the quotes that follow will be able to be compared on the basis of both coverage and price. They can help you obtain and accurately compare insurance proposals to help you pick the best insurance quote for you.
If you have questions about your home, auto, motorcycle, or watercraft policies, or you would like to ensure you are taking advantage of all the available discounts, give one of our experienced agents a call at 1-800-537-6880 or 717-668-2283.
Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.