Pricing is generally a strength of group auto plans, but there are certain aspects related to pricing which may cause certain eligible members to shy away. Group policies can include any eligible member, but the transferability of such policies can be an issue. The protection in coverage afforded by group car insurance plans is generally excellent, but individual choice may be limited. A closer examination of some of these potential drawbacks to group auto insurance can help eligible auto owners to see the full picture and decide whether or not they wish to participate.
Pricing Affected by All Members
One of the biggest draws most of us have to participating in an auto insurance group is monetary. Based on what we hear from insurance representatives and from other drivers participating in groups, our expectation is that by joining, we are guaranteed to save money. It must be pointed out that in a general sense, this is probably true: auto insurance groups tend to be able to offer lower prices to group members than individual policies. There are many reasons for this, but basically the difference comes down to volume.
The larger the insured group of drivers, the more the risk is spread out. Insurers can cut the group members a break on rates because of the fact that the group essentially comes to them and there is no selling or marketing involved beyond initially setting up the group plan. Beyond this savings, the impact of one accident or one poor driving record is lessened because it can be basically spread out across the group. This is a good thing if you are that driver with the recent history of at-fault accidents or a poor driving record in general. If you have had trouble finding affordable rates through the years, membership in a group auto insurance plan might be just what you need. But for drivers who have clean records and great credit scores, just the opposite may be true.
If you have always qualified for preferred driver rates and safe driver discounts from your insurers through the years, group auto insurance may actually hinder your ability to save money. Depending on the specific demographic represented in the group, your group rates as determined by the auto insurance provider might actually push your policy premiums up higher than they would be if you just contracted an individual policy on your own and decided not to participate at all. You must keep this in mind as you contemplate participation in auto insurance groups. It does not hurt to gather some prices for doing it both ways, and you are certainly under no obligation to join-one of the great benefits of most auto insurance groups is that membership is generally
Group Policies Often Non-Transferable
Just like with the pricing aspect, one of the other perceived strengths of the group car insurance concept is also a source of one of its weaknesses. Group membership requires meeting eligibility standards: belonging to a civic organization, being an employee of a company a union, or being associated with some other participating group. Part of the draw of getting set up with an auto insurance group is the fact that its existence can add value to membership or employment in a group or company. You can use it as a selling point for those you are recruiting to join or hire in. But this strength-the exclusivity of membership-also masks a corresponding weakness.
Any group member who loses or resigns membership in the participating organization immediately becomes ineligible for membership in the auto insurance group. Thus, if you decide not to renew your membership in a civic group, or if you take a job with some other company, you will have to start over in your search for suitable auto insurance coverage. The benefits of group membership will no longer be available to you. This can be both inconvenient and expensive to drivers who see actual savings in their premiums due to participation.
If you have enjoyed much lower auto insurance premiums thanks to your membership in a group auto insurance plan, it might give you reason to rethink quitting that non-profit organization just for the sake of your policy. As for your employment, generally we only switch jobs when the benefits outweigh the drawbacks, so this is just one more small factor to take into consideration, one part of the overall picture to ponder before turning in your two week notice.
Group Auto Policies Sometimes Inflexible
Aside from generally advantageous policy pricing and the basic exclusivity of group membership, the other primary advantage of auto insurance group policies is the great coverage they can offer to members. In most cases, these groups (especially the larger ones serving big organizations and companies) are set up and administered by large, well-known auto insurance carriers. They are designed to sell themselves, in a sense. The goal of the insurers offering these group plans is to make it difficult for eligible drivers to turn down participation. They want to make the plans too good to pass up, so they typically offer great values on extensive coverage.
But once again, a primary strength of group auto insurance hides its twin, the weakness accompanying that strength. Surely these plans do offer great coverage at generally reasonable policy prices; the trouble is, they are sometimes inflexible in the way they are set up. For the entire group to qualify for discounts on certain areas of coverage, often the whole group or at least a large percentage of it has to elect to carry this coverage. For example, an auto insurer might offer great rates on elective collision insurance to a group, but they may require all members of the group to add collision coverage to their individual plans in order for the discounts to be good.
This sort of inflexibility in coverage options can help the insurer to focus their efforts and offer a better overall value for members of the auto insurance group; but at the same time, it can discourage certain eligible parties from participating. For example, a driver who only owns an old, beat up car would probably not be interested in adding collision insurance to her policy even at a discounted cost. This kind of coverage is still not a value to her, because it is not an area of coverage she has any need for.
There is no doubt that group auto insurance can be an excellent option for eligible drivers in many cases. However, there are certain factors to consider before any eligible driver signs on. Group auto insurance plans are a great option, but they’re not for everyone. Decide for yourself whether they are right for you.
Here’s what you need to know…
Many jobs offer group insurance options for employees
Alumni from some colleges and universities may qualify for group insurance
Certain clubs and organizations make group plans available to members
Group plans occasionally have drawbacks, so do your homework before making any decisions
Three car insurance group options you should look into include those associated with your job, your education and your profession or interests. Buying car insurance as part of a group can give you a number of benefits, and you may already belong to a group through which you can reap those benefits.
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Being part of a group plan for auto insurance can save you money on more than just the premium, but may come with perks you could not otherwise enjoy with an individual car insurance policy.
As enticing as the perks may be, you still want to make sure you are getting the best possible deal with your particular policy.
Group Options Through Your Job
Employers are well-known for offering group health plans, but they may not be as well-credited for having car insurance options for their workers.
That option may already exist at your place of employment and, if it doesn’t, you may be able to persuade your employer to look into it if you have enough backing from fellow employees.
Larger companies may be more apt than smaller firms to provide group options for car insurance, and they may also be able to provide the biggest perks along with it.
This is due to sheer volume alone, with more employees leading to more advantages when it comes to insuring a group.
Employers that are exceedingly large may be able to offer group insurance options that extend far beyond health and car insurance.
The state of Idaho, for example, offers group insurance programs across the board to its current and retired employees as well as their dependents, according to the state’s Office of Group Insurance website.
If your company does offer a car insurance group option, you will probably have to pay for it out of your own pocket. The price would depend on the personalized options you choose, in addition to the bare minimum required by each state.
Just as not every employer offers health plans, not every company offers car insurance group options. In addition, every employee may not be eligible.
Requirements may include working a minimum amount of hours each week, having tenure with the company, or being in a specific profession with the firm.
Find out More About Employer Group Options
Find out more about what car insurance group options your employer may offer, if any, by contacting your company’s Human Resources Department. The information may also be published in your employee handbook or on the firm’s website.
If you happen to work for a car insurance company, one could only hope one of the perks is group auto insurance options for its employees. This is only a theory, however, not a practice mandated by any rules or regulations.
Group Options through Your School
Full-time high school students often get a break with car insurance discounts if they maintain good grades. But current students are not the only ones who may get a break on car insurance rates.
Depending on where you received your advanced education or additional training beyond high school, you may be part of a group that has a car insurance option already in place.
Colleges or trade schools may offer car insurance group options, with one example coming from the City University of New York (CUNY).
Auto insurance discounts are on the list of the many benefits that come with being a CUNY alumnus, according to the CUNY.edu website. Alumni benefits include discounts on a number of other items as well, including:
dining and travel
theater and movie tickets
access to CUNY libraries, professional development, and continuing education programs
One reason CUNY is able to offer a wide range of perks is the sheer amount of students that have attended one of its universities. The City University network contains 23 colleges throughout New York City’s five boroughs. Its alumni headcount exceeds 900,000.
To be eligible for the benefits that come from being a graduate of a specific school or institution, you are usually required to officially join the alumni organization or group as a paying member.
The price of annual membership, however, can balance out the money you save if you take advantage of the car insurance breaks and other cash-saving benefits.
Schools may require graduation as a term for membership rather than attendance. Find out more about group options through your school by contacting the development staff or alumni headquarters.
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Group Options Through Other Organizations
Your profession or your interests may also come into play for car insurance group options if you are part of a professional or membership organization or society.
Many vocations have one or more professional groups associated with them, such as societies for journalists, attorneys, accountants, teachers, and actors.
Honorary groups and societies are another batch of organizations that may offer car insurance group options to its members.
One example is the Golden Key International Honor Society, which lists insurance discounts as one of the membership benefits on the official website. Membership also merits additional discounts from banks and bookstores.
Even if the group is not related to your profession or education, those that focus on special interests may also offer group options for car insurance. These may include organizations for individuals interested in certain activities and hobbies, such as gardeners or train enthusiasts.
The field can be wide open for membership perks from each particular group, depending on the size, budget, and connections of each specific organization.
Because the perks that come with being a paying member to a particular organization are usually a huge selling point, you may be able to research the availability of car insurance group options directly on an organization’s website.
If not, you can always contact the head of the group or chapter in your area to glean the specifics.
Benefits of Car Insurance Group Plans
Perhaps the biggest benefit of obtaining car insurance as part of a group rather than an individual is the cost. Because insurance companies are extending coverage to a larger amount of people, they can offer prices that allow each individual to save money.
If the car insurance company is saving money by working with a group, they can more easily pass along the savings to members of the group.
Car insurance companies may also be able to offer other discounts in addition to lower premiums. These include:AdobeStock_58062499-1600×1600
discounts for parking in select parking garages or facilities
discounts on car rentals, auto accessories
services related to your car, such as towing or repairs
Group plans may also allow for greater flexibility when it comes to method of payment.
For instance, some companies may allow you to automatically pay your premiums through payroll deductions.
Or you may get additional leeway when it comes to setting up payment plans, such as those scheduled on a monthly, annual or semi-annual basis.
In order to encourage loyalty to your employer as well as the car insurance company, your auto insurance policy could also become less expensive the longer you remain employed.
Tenure discount may be the term you hear relating to such a break. Car insurance companies may offer similar discounts to individuals, calling them loyalty discounts.
Possible Detriments of Car Insurance Group Plans
Anyone who is a free spirit may dislike the idea of a group plan due to the potential limitations it may impose. An organization that offers group plan options may only do so through a specific auto insurance carrier.
That means you may have to abandon a company you have long enjoyed while setting up a trusting relationship with a new one.
This can particularly backfire if the car insurance company offered as part of your group plan has its own set of detriments, such as:
poor customer satisfaction
an unstable financial portfolio
harsh or ridiculous guidelines for filing claims
If you leave or lose your job for any reason, you are also out of the group car insurance plan.
While you may be able to retain the same type of coverage and level of car insurance with the same insurance company, you can probably bet your rates will increase and you’ll no longer enjoy the perks that came with being part of a larger group.
The same potential hazards apply if you drop out of any organization from which you received a car insurance group plan option.
Tips on Shopping for Car Insurance
One of the foremost tips for getting the best coverage at the best rates is to compare more than one company, according to the Illinois Department of Insurance.
While this may not apply if you are offered only one company option for group plans, you can still compare other companies to make sure you are getting the best deal.
The group rate may weigh in cheaper than an individual rate all around, but you should still look at other factors that are just as important as a low premium.
These include customer satisfaction, ease and convenience of filing claims, company reputation, a strong financial outlook, and how comfortable you are with the company’s policies.
Ask about additional discounts that apply, even beyond the group rate discount you may already be getting.
You may be offered a reduced premium for things like being a good driver, low annual mileage, and having a number of safety and security features installed on your vehicle. If you don’t ask, you may never know about additional discounts.