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Free Auto Insurance with the Purchase of GM Vehicle. What?!

July 8, 2011

MetLife Auto & Home has introduced a new program it is launching with General Motors.  Essentially, GM will provide a 1 year paid auto policy as an incentive to purchase or lease a GM car.  This is being tested in two pilot states – Washington and Oregon, beginning on July 6.  More details can be found in this NY Times article

As Oregon agents, we have MANY questions about this program like: 

  • Are the dealers going to hire licensed insurance agents?  If not, will this violate state licensing laws?
  • If a car buyer has a DUI and multiple speeding tickets, none of that is factored into the premium?  No premium variation for age or sex? 
  • If GM does pay different rates to Met P&C based on the purchaser’s driving record, credit, etc. isn’t that discriminatory?  The rate differences could be huge!
  • Will consumer groups have a problem with this – one size fits all – coverage is standardized and not tailored to fit the consumers need?
  • What if the purchaser already has an auto policy on existing vehicles and now has a separate policy on this one.  How do the policies respond when the insured and a family member borrow or rent a nonowned auto?
  • What if the insured has an umbrella?  It’s unlikely to respond to claims to an auto insured under another personal auto policy.
  • They say the auto cannot be used for “commercial use.” What does that mean and how is it excluded in the policy? If the owner runs mail to the post office for his employer, is that “commercial use”?

Bottom line, I suppose this will help push some GM cars, but the program is not for people who have assets to protect.  There are SO MANY potential problems and pitfalls with this approach to insurance.  It’s going to get ugly when the unpaid claims start rolling in and customers and consumer groups figure out that this wasn’t such a great deal.

So if you’re thinking about buying a GM car, make sure you give us a call first to discuss the ins and outs!

Filed under: Uncategorized — admin
 
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