Motorcycle Insurance Articles
Why Motorcycle Insurance Discounts Are Illegal In Some States
2011-01-15
Certain motorcycle insurance discounts are illegal in some states. Each individual state motorcycle insurance law is unique to the state that it is in, and there is no official federal motorcycle insurance regulatory authority, so the state motorcycle insurance law is sovereign. The reason for the illegality varies according to the type of insurance discounts being discussed.
It will surprise some that insurance discounts that stem from loyalty are prohibited by certain states motorcycle insurance laws. Loyalty insurance discounts are a percentage of the entire premium removed because of a customer choosing to stay with a company for a set period of time. The reason these types of insurance discounts are prohibited by certain state motorcycle insurance law is because specific state regulatory authorities see it as a method of keeping consumers unfairly tied to substandard insurance protection. Many consumers just look at the bottom line and expect equal service. As an act of protection for the public, the state motorcycle insurance law is meant to keep motorcycle insurance companies from offering these so consumers will look around more for their own well being.
Another trend that is inspiring insurance discounts in terms of motorcycles is based on gender. It is shown that more women are buying motorcycles than ever before. It is, however, illegal to discriminate by some state laws based on gender. This means that even though women statistically have lower rates of incidents and cost less to insure, some states disallow discounts based on gender alone. This would have nothing to do with the underwriter's determination of cost to insure a woman based on individual risk. For example, if all factors are the same as far as location, type of vehicle, and age, then gender would cause a woman to be quoted a lesser cost than a man in most cases. However, some state motorcycle insurance laws would not allow a discount to be offered based on universal gender because it would be considered discrimination.
Motorcycle insurance discounts are limited by the state motorcycle insurance law that the insurance company is licensed to operate in. These discounts are going to vary in legality to the perception of the body in charge of the regulatory laws of that state. If there is a discount that is offered by a company that is inconsistent with the laws of the land, then the insurance company is risking high fines and possible loss of license to operate in that state. This is something that insurance companies take seriously because it affects their ability to make a profit. This is why these motorcycle insurance companies are careful in the type of discounts they offer.