4 Things You Should Know About Group Auto Insurance

Organizations and employers sometimes offer group auto insurance to members and employees as an added benefit. Auto insurance companies offer lower rates to group members since the entire group of drivers experiences lower levels of risk than individual drivers. Compare quotes for FREE by entering your ZIP on our homepage!

Insurance costs are based on the perceived level of risk that can be proven through actual accident and repair statistics.Large employers and organizations bring large numbers of new customers to the insurance company without significant marketing efforts on the part of the insurer. Drivers should know some facts about group auto insurance prior to joining and signing up for insurance.

Eligibility Requirements for Members

Any driver who wishes to participate in an auto insurance group must be part of an existing organization that offers group auto insurance. Frequent advertising of group auto insurance has become a habit of employers and organizations that want to draw new people. Lowering car insurance premiums is an attractive benefit for most drivers because of the annual increases in individual car insurance rates.

• Employment – Most employers that offer a group auto insurance plan will list the optional benefit in the employee handbook. A call to the human resources department can provide information. Enrollment is handled by the customer service department of the insurance company.
• Membership – Buying clubs, senior citizens organizations and other large pre-established groups will advertise lower car insurance rates as an added benefit offered to members. These groups do not underwrite cheap auto insurance.

Benefits of Group Auto Insurance

Insurance companies have lower administrative costs for group auto insurance policies. Group members file fewer claims than policyholders of standard individual auto insurance do.

Statistics prove that group members experience fewer moving violations and accidents.

Auto insurance providers reward group members through the following benefits.

• Simplified application – New members of an organization will find the auto insurance application to be simplified in comparison to the individual auto policy. Details about the group determine the terms of the insurance agreement, so adding members is easier for the insurance company. The member’s residential address will dictate some of the benefits offered by the insurance company.
• Automated payments – Monthly premium payments are collected from group members through various automated payment processes that provide convenience for the insurer and the member.
• Group discounts – Lower premiums are important to members. Insurance companies incur lower administrative costs for group auto insurance plans, and the cost savings is passed on to members.
• Tenure discount – Members will earn deeper auto insurance discounts for retaining an active membership status for a number of years. This is an important factor for controlling insurance costs for each participating member.
• Discount for garage – Vehicles that are parked in garages incur less non-collision damage. Group members will qualify for significant discounts for protecting the car from the elements, theft and vandalism. The comprehensive component must be on the policy for these discounts to be afforded.
• Convenient customer service – A phone call to the central customer service department provides the claims and other customer service support required by members. Members of group auto insurance plans like the convenient customer service offered by the insurer.

Options for Group Members

Insurers offer the same choices to group auto insurance members. Administration of the policy is the only difference in the group policy in comparison to the individual policy. Members will be offered various options that are designed to meet their personal auto insurance needs.

• Coverage choices – All of the major insurance components are offered to each member of the group policy. Liability, collision and comprehensive coverage are offered at the payout levels that are appropriate for the member. The group policy might offer default values, but the member is allowed to change the amounts. Members are allowed to purchase liability-only policies in the right circumstances.
• Payment options – Members are encouraged to embrace automated payment options to prevent lapses in auto insurance coverage. Discounts for automated payments are given directly by the auto insurance company.
• Traditional paper billing – For those who want to write a check, the monthly bill will be sent to the insured’s home address.
• Bank account deduction – On the bill due date, the insurance company will request payment from the checking account designated by the member.
• Credit card payment – Automatic payments made by credit card are common for group auto insurance members. This approach insures that the payment is received without concern about overdrafts.
• Payroll deduction – Employer group auto insurance provides the most convenient payment method. Employees like this simple option.

Departure from the Group

State laws will determine what happens for members who leave the organization that offers the group auto insurance.

Employers are subject to the limitations placed on the group auto insurance by the laws in each state.

Some former employees will be allowed to stay in the auto insurance group while others will not because of their state of residence.

• Quit job – Members might be offered the option to pay for their insurance outside the payroll deduction. Agreements with the insurance company vary, so the former employee must contact customer service to determine the options that exist.
• Disability – An employee on short-term or long-term disability might be given the option of paying for the group auto insurance directly. Once the employee returns to work, the payroll deduction can be restarted.
• Terminate membership – Organizations that offer group auto insurance have agreements with auto insurers that require members in the organization to qualify. Members who leave the organization will be notified of the termination date for the auto insurance.

Final Word

Group auto insurance is underwritten by major insurance companies and offered through existing employers and organizations. The insurance company pays insurance claims. State laws apply to the coverage offered to members. Many drivers are unaware of the existence of group auto insurance if they are not associated with an existing group. Try our FREE quote comparison tool today by entering your ZIP code!

Anyone struggling to pay high insurance premiums might benefit from finding an organization that offers group auto insurance. The driver’s profile will make influence the rate paid but not as significantly.

Drivers can find group insurance plans by asking auto insurers if any group plans are offered through their companies. Large numbers of auto insurance customers are brought to each insurance company through the efforts of organizations and employers. These groups are less expensive to administer, which makes group insurance attractive for organizations, insurers, employers and members.