Group insurance offerings in Canada usually take the form of a special offer made to a particular membership. This shouldn’t be confused with fleet insurance, usually a commercial product covering a number of vehicles owned by a business. Group insurance policies still depend on the record and history of individual drivers. The group benefit is usually a discount or special combination of features and options in a package offered to group members.
How do I get in an auto insurance group?
All it takes is membership in a group with whom an insurance company makes an agreement. This could be through membership in a special interest group, such as an automobile association, or an unrelated group that offers benefits to its members, often a labour union, particularly one with a large membership or national ties.
How do I benefit from group insurance?
There’s a chance you may not benefit at all. Even with discounts and special packages, the insurer offering group coverage may be priced higher than competitors, even after discounts apply. Group insurance offers are usually exclusive. That is, one group and one insurer partner on an offer for all members.
Otherwise, group insurance could be a straight discount off a policy. In that case, a driver who would normally pay $1,000 annually for insurance would pay $900 with a 10 percent group discount.
Insurance packages may be the arrangement. The insurer could offer a collection of optional endorsements at little or no extra charge as the feature of the group offer. The driver benefits through additional coverage – features such as non-owned vehicle coverage or accident forgiveness – that would cost extra when added to a personal policy.
How does an insurance company benefit from group insurance?
The insurance company making an agreement with a group essentially establishes a captive audience. For instance, the arrangement with a labour union might include ads in union publications or on union notice boards, increasing awareness with the union’s membership about that particular insurer.
Many motorists treat auto insurance shopping as a nuisance, an annual (or less, with automatic renewals) chore that provides no fireworks of consumer excitement. When the issue comes up, a group member may recall XYZ Insurance as the group provider, and consider that, since there’s a discount offered, insurance is reasonably priced. They contact the company, provide their membership details and the insurer takes it from there, applying group benefits and/or discounts.
Does group insurance really save money?
Yes, it can. For example, if a group member is already insured with the supplying company, adding membership discounts and features either reduces costs or adds coverage.
However, in Alberta, Ontario, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador and the three territories, car insurance comes through private insurers. Even British Columbia and Quebec have private insurance portions. In most cases, private insurers have their own way of pricing and offering coverage, dependent on provincial approval. It’s entirely possible that, no matter how good the group insurance deal, another company has a better rate.
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