What discounts do most insurance companies provide?

Answer 1

Technically, most premium reductions are not "discounts", but are factors that insurers consider in setting rates, from which premiums derive. That is, an insurer is required to charge the same rate for the same risk in the same place. If factors differ such that a reduced risk of loss exists, the insurer may offer a lower rate. Since premiums are a function of rates (rate X $100 of value), a lower rate will generally translate into a reduced premium.

The factors that might be factors in lower rates/premiums depend upon the kind of insurance involved. That is, they are different in auto insurance, homeowners insurance, types of commercial insurance, etc. However, the common denominator are factors that lower risk of loss and hence, the likelihood that the insured will be exposed to a covered loss for which the insurer will have to pay.

Examples in the auto arena include such things as crashworthiness, lack of collisions within a stated period of time, good grades for students/new drivers, refresher courses for older drivers, and others.

An example in the homeowners area might include things such as a new roof that meets current wind load standards.

Some "discounts" are promulgated by the insurer based upon its own loss experience, and some are mandated by statute as a matter of public policy.

It is important to periodically meet with the insurance agent and broker to review current coverages and risk factors to determine whether the insurer has made available new or different "discounts" for which the risk insured may qualify.