Are Companies Required to Give Auto Insurance Discounts?

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Taking advantage of the numerous discounts offered on car insurance is a great way for motorists to save on auto coverage. There is a wide range of savings available, and, fortunately, some are required by law. Many states mandate that insurers apply a discount to policies for certain items such as completing a driver education course or having special features equipped on cars. Drivers may want to inquire about savings that they feel they are entitled to, and ask if any others are available.

Maine's laws require discounts to be given to drivers over the age of 55 who have completed a state-approved motor vehicle accident prevention course. A price reduction must be given for liability, medical payments, and collision coverages upon completion. Savings must be applied for 36 months from the date the course was completed, and a new course must be completed after that time period to continue receiving a discount car insurance premium. This doesn't apply if the policyholder or a member of the household was at-fault in a car accident, convicted of a moving violation, or has had their license suspended in the last three years.

Montana also requires insurers to give a price break to motorists age 55 years and older for completing a defensive driving course, and the premium reduction must be no less than 10 percent. The state also requires carriers to give a 5 percent discount on comprehensive coverage for vehicles equipped with authorized antitheft devices.

The state of New York has many discounts that are required to be applied to policies for specific items. Motorists can reduce premiums by completing an accident prevention course approved by the Department of Motor Vehicles, which will entitle them to a discount on liability, collision, and no-fault coverages. In addition, vehicles equipped with features such as automatic seat belts or air bags can get their owners a lower car insurance rate on no-fault and medical payments coverage. If an auto is equipped with a factory-installed antilock braking system (ABS), it will reduce the cost of liability, collision, no-fault, and medical payments coverage.
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The majority of states require insurers to apply some type of rate reduction for those who pose less of a risk on the road. Motorists should be sure to ask about any available. Consumers should be aware that some discounts are applied automatically and others have to be brought to the attention of a company to receive the savings. For instance, when the vehicle identification number (VIN) is put into the carrier's system, it will pull the factory specifications and apply the applicable price reductions. But if an auto owner had an aftermarket alarm installed, there would be no way for an insurance company to be aware unless the motorist tells them. The same goes for driving courses, and the carrier will usually require documentation proving an alarm has been installed or that a driver has completed an approved course.