What is a Discount? - Insurance Navy. In insurance, a discount refers to a reduction in the insurance premium that a policyholder must pay. Insurance companies often offer this type of discount as a reward for certain behaviors or conditions, such as having a clean driving record for a period of time or safe driving habits, that statistically reduce the risk of a claim or as an incentive for specific actions, such as purchasing multiple policies from the same company. There are a variety of discounts depending on the type of insurance.
For instance, in auto insurance, being a safe driver, taking a driver training course, or using anti-theft devices may open potential discounts for policyholders. In home insurance companies may offer discounts for installing anti-theft systems, using fire-resistant materials in construction, or living in a gated community can also open various savings opportunities. The amount and availability of discounts can vary significantly between different insurance companies and regions.