Customer Loyalty Auto Insurance Discounts

Customer Loyalty Auto Insurance Discounts

With the availability of information online regarding rates for auto insurance, many drivers utilize car insurance quote programs, business review sites, and other tools to determine which insurance company to select. Often, shoppers are more concerned with finding the lowest rate than the best policy to suit their needs.

Though it may seem as though this is advantageous for some insurance carriers, quite the opposite is true. For insurance companies, attracting new customers is expensive.  The industry spends over $6 billion per year on advertising. With so many seeking to switch carriers in their never-ending quest to secure the lowest rate, and insurance companies spending more money to attract new customers, carriers are fighting back with customer loyalty discounts.

To promote the retention of renewals, a number of insurers offer customer loyalty discounts or early renewal discounts. These customer loyalty programs can take numerous forms:

  1. Advanced renewal discounts: Pay your renewal premium early and we will give you a discount of ‘x’ dollars or ‘y’ percent on your renewal;
  2. Renewal discounts: Renew with us and we will give your renewal policy a credit of ‘x’ percent or a flat credit of ‘y’ dollars;
  3. Disappearing deductibles: For every year you renew with us without a claim, we will reduce your collision and comprehensive deductibles by ‘x’ dollars until they are gone;
  4. Rate Guarantees/Rate Locks: Some insurers promise that so long as certain conditions are met, they will not raise your rates at renewal.  Such programs are not available in all states.  Typical conditions on such a rate lock (for auto) require that:
  • You have not added or deleted a vehicle from your policy;
  • You have not added or removed a driver from your policy;
  • You have not change your primary address;
  • You have not changed the primary use of your vehicle (i.e. changing from pleasure use to business use);
  • You have no more than one at-fault accident in the last three years and no major moving violations (fleeing policy, driving while intoxicated, reckless driving, etc.) in the past three years.

Your customer loyalty auto insurance discount will vary depending upon your insurance carrier and the number of years you have held a policy with the same company. One of the best aspects of the discount is that it can help lower your rates whether you have the minimally required coverage or have a more comprehensive policy.

Keep in mind that customer loyalty discounts are sometimes used to offset an increase in rates, which is called “price optimization.” While some carriers refuse to partake in this practice, which is also called price maximization, for others, it’s part of their business model. This means an increase in premiums based on industry trends rather than losses.

One way to avoid price optimization is to shop for an insurance carrier that does not partake in this practice. Compare insurers and set up an annual appointment with your independent insurance agent to discuss your premium rates and the loyalty program discount they offer.

Don’t wait to renew until the last minute. Having an insurance policy lapse can be very risky. Driving without insurance can lead to fines or jail time. Being in an accident while uninsured can be quite costly. So, speak to your agent as soon as your renewal period begins.

Many carriers offer customer loyalty programs, although they vary from insurer to insurer.  In addition to these customer loyalty programs, there are many other home and auto premium discounts available.  In many cases, you will not get the discounts unless you talk to your agent or insurer about them. For example, if you do not tell your insurance agent that you have an alarm system, you probably won’t get a premium credit on your home insurance policy for having an alarm.

Below are links to a number of good articles on potential home and auto insurance policy discounts. If you are eligible for credits, but fail to take advantage, it could be costing you hundreds of dollars per year.

What Are Some Auto Insurance Discounts?

Auto Coverage Discounts

Home Coverage Discounts

How Much Does Homeowner’s Insurance Cost


While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.