Auto insurance discounts can be an excellent way for policyholders to cut coverage costs, but are all drivers receiving the right reductions? On March 29, a federal court in Pennsylvania found that several insurers in the state had been wrongly withholding state-mandated discounts for motorists whose cars had been equipped passive antitheft devices. Other Pennsylvanians with such devices may want to review their policies to make sure they’re getting the proper premium breaks.
In the case, suing policyholders believed that they were wrongfully denied a mandated comprehensive insurance coverage discount of at least 10 percent for having a passive security system installed in their vehicle. The district court agreed with them, concluding that these rate reductions are to be applied even without a policyholder’s request, leaving little wiggle room for insurers. Fortunately, not all savings require a multicompany legal battle.
It’s common for insurance companies to reduce the cost of a motorist’s comprehensive coverage for a vehicle equipped with an antitheft device, because these tools help to protect the insurer’s investment. If a car is outfitted with a passive disabling system and a GPS tracking device, the automobile in question is much more likely to be recovered. Because of these advantages, some states require insurers to give antitheft discounts, while in others insurers offer them voluntarily.
When rate reductions are mandated, however, it’s important for residents to take advantage. Rhode Island is one of the many states that also requires auto insurance coverage providers to issue premium reductions for insured drivers who own vehicles equipped with antitheft devices. This reduction can vary depending on the type of device, which was a major point of contention in the Pennsylvania case.
Rhode Island regulations spell out which types of devices get what levels of discounts in that state, with the types broken down into four main categories:
Alarm only: Audible devices that sound for at least three minutes and can be heard from 300 feet away (minimum 5 percent discount)
Active disabling: Devices that make the car’s starting system inoperative and must be activated by the driver manually (minimum 5 percent discount)
Passive disabling: Same as active disabling, but does not require the driver to manually activate it (minimum 15 percent discount)
Vehicle recovery system: Electronic device attached to the vehicle that is activated when the car’s stolen and provides information to law enforcement or a private party on the vehicle’s location (minimum 25 percent discount)
In Rhode Island, having more than one of these devices can get the policyholder savings on comprehensive coverage of at least up to 35 percent. Even though these are state requirements, individual insurers may choose to offer additional savings as well. Other states’ device descriptions and minimum discounts will vary from Rhode Island’s.
Drivers who have equipped their cars with antitheft devices may want to check with their insurers to see if they are getting any appropriate discounts. And policyholders who are thinking about getting an antitheft device could maximize their savings by asking their insurer which type will yield the greatest premium break.