Create a 3 page essay paper that discusses Insurance College.Download file to see previous pages... The population of Californian state have jointly recommended that the favour under persistency disco

Create a 3 page essay paper that discusses Insurance College.

The population of Californian state have jointly recommended that the favour under persistency discount shall be offered to all the owners of all the insured vehicles. The persistency discount was additional favour towards the old customers. however the residents have claimed that they should be entitled for this persistency discount as well. It is debated that persistency discount was a trap, if the customer has to secure this benefit than the customer has to commit its long-term affiliation with the insurer. Thus persistency discount offered unconditional guarantee to the insurer about their customer loyalty. The residents have challenged such policy, and has stressed that this is against the notion of free and transparent competitive market.

It is however warned that the imposition of persistency discount will offer financial benefit to the owner, but will also put the owner under certain financial and legal constraints. It is warned that persistency discount amendment will be responsible for inclusion of other obligations and penalties towards the owner which presently have been ignored. The critics have cautioned that persistency discount will put the owner in web of other charges in form of automobile insurance, penalty for accidents - irrespective of their fault. the concerns are specifically valid for motorists. It is further warned that persistency discount might be an expensive discount for the vehicle owner. particularly those who have taken driving break of minimum three months, and will probably end up paying more amounts for re-registration of their dormant case. Furthermore, the critics have warned that implementation of persistency discount for new customer will give undue advantages to the insurance firms. It will give them the right to increase the insurance rates - and this increase might be significant for family who is currently under strong economic crunch due to global recession.

A chain of events have been idealised by the critics, who warn that implementation of persistency discount for new customers will increase the premium charges and other additional expenses particularly if the driver turns dormant. The increase in insurance rates will naturally develop reluctance among the low and middle class vehicle owners, and therefore there will be increase in the number of uninsured vehicles on road. The increase in the number of uninsured cars will affect the business of insurance companies, and therefore insurance companies will increase their premium charges from the registered vehicle owners. Eventually, the insured vehicle owner will end-up paying more insurance amount, and at parallel the uninsured vehicle owner has potential of heavy financial loss in case of accident. Critics warned that the demand for persistency discount for new customers will jeopardize the insurance business and the interest of vehicle owner. The contents of Continuous Coverage Auto Insurance Discount Act are suspected to be dubious. It is warned that this act will provide insurance firms with legal cover to disown the customer upon filing claim.

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The proposal has been supported by those who echo the concept of free and competitive market. The act is an attempt to develop competition among the insurance companies. This proposal shall provide vehicle owner to pick the smart deal.