One of the commercial tools used by insurance companies to build customer loyalty is the Car Insurance bonus. We are talking about bonuses that are transformed into discounts. When the insured has not registered claims or given parts to the Insurance for a while. Car Insurance bonuses promote savings and help everyone to drive better.
This practice not only helps customers remain loyal to their insurer but also promotes risk customization and rewards policyholders who are more cautious and careful.
But how do Car Insurance bonuses really work? As we have already pointed out, the application of bonuses that imply a discount in the price of the premium depends on the accident rate of the insured vehicle, that is to say, of the parts that the vehicle has generated in a certain period of time, which in most cases is 3 or 5 years.
Insurance companies apply the bonuses differently from each other, with different discount percentages and with longer or shorter periods of absence of parts. There are insurance companies that have a progressive system of discounts, with which as the years go by without having a claim, the discount is increased, up to a maximum that can reach 60% of the price of the Insurance.
We can also find Car Insurance companies that apply different bonuses depending on the coverage contracted, with discounts of greater or lesser amounts depending on whether the policy corresponds to a Third Party Insurance, an Extended Third Party Insurance, or an All Risk.
How is it determined that a Car Insurance has a bonus
In order to know if a vehicle is insured with a bonus, insurance companies capture information from a database called SINCO, which is produced by TIREA (Information and Network Technologies for Insurance Companies, a statistical service dedicated to the insurance sector).
In this database, the insurers can access the information of the policies and, if any, of the claims associated with each contract at the time of subscribing to a new Insurance for your Car.
The insurance bonus is for the policyholder
However, when deciding whether the insurance bonus is applicable, the company looks at the policyholder’s claims history, not the vehicle’s. Many people think that the driver of the vehicle or the owner is the ones who can enjoy the bonus, when in fact it is the policyholder who signs the insurance contract and is responsible for paying the premium.
That’s why, when determining whether or not there is a bonus in the policy, the insurance company needs the policyholder’s ID, the policy number, and the car’s registration number. With this data, SINCO’s statistics reflect the number of claims associated with the policyholder in recent years. With this data, each insurer establishes its discount on the premium price, based on the parts received during the last years.
Why are there bonuses in Car Insurance?
With this bonus system, companies customize policies based on each driver’s accident history. This way, the insurance company adjusts the policy prices in each case, according to each individual risk: Whoever has fewer accidents pays less, and whoever has more pays more.
Another fundamental reason for insurers to offer these discounts to customers with fewer accidents is to build loyalty among the company’s best policyholders. It is obvious that any insurance company is interested in having in its portfolio customers who do not have parties. They are the most profitable policyholders and rewarding their car caution with discounts is a way to avoid losing them.
The advantage for customers is also clear. Any driver who has been insuring the same car with the same company for several years can accumulate bonuses until reaching the maximum possible. And as we have pointed out, there are bonuses with really interesting discounts and get a good saving in Car Insurance. However, if at some point, for whatever reason, that customer decides to change insurance companies, what happens to those bonuses?
Are bonuses maintained when changing insurance companies?
Although the bonus system encourages customer loyalty to the insurer, the truth is that more and more insurers are offering as a commercial claim the maintenance of the bonuses when changing the Automobile Insurance. Others do not.
There are insurers that also have access to SINCO files and have chosen to respect the bonus of new clients (as long as they do not exceed the maximum bonus established by the insurer), applying those discounts to their own rates.
Other companies choose to set a maximum bonus for new clients and there are those that only apply bonuses to certain coverage. Again, the commercial policy of each insurance company introduces new elements to be taken into account when we decide to renew the Automobile Insurance or not, and with whom.
What if we change cars? By securing the new car you don’t lose the bonus
As we have already mentioned, the subject to whom the Car Insurance bonuses apply is the policyholder. The insured property is indeed the automobile, but it is the policyholder who is responsible for the policy. Therefore, when changing the car, the insurance company will respect the discount that corresponds to it for low accident rate.
Another thing is that, when changing the car for a more expensive or more powerful one, the insurer will change the price of the premium. If the insured risk changes, the premium may vary, even if the bonus discount is maintained.
If you’re a good driver and don’t have parts, it’s easier to find cheap Car Insurance. The bonuses you have accumulated will allow you to lower the price of the policy premium and, in many occasions, negotiate with other insurers in case you decide to change your insurance.
In any case, we can help you to select the best offers in the market and we have advisors that can advise you to achieve the greatest savings in your Car Insurance.