Group Insurance Rates: a Good Idea for You?

Group insurance is becoming popular with many companies that are looking to insure their employees on the road, but want to save money. A group insurance policy is essentially an auto insurance agreement that covers multiple drivers under one contract.

By providing insurance to a large number of drivers at one time, insurance companies can cut their costs and lower the cost of premiums for their drivers. Although there are many advantages to signing your company up with a group insurance scheme, there are also a few down sides that you need to consider before signing any contracts.

The following article will look at both the positive and negative sides of group auto insurance policies. Think they’re for you? You might change your mind after reading this.

Group Insurance Rates Positives

Group Insurance Rates

  • Save Money: Companies often find themselves tempted to sign up with a group insurance policy for one reason—to save money. As mentioned previously, the policies work by combining a number of drivers on the same agreement. Because the risk for the insurance company is split between a number of people, they can afford to lower the cost of insurance premiums. Not only does this mean that you and your employees will pay less each month as a standard rule, but in the event of an accident, you will each pay less for repairs and maintenance to any damaged vehicles because there are more of you chipping in to cover the costs.
  • Become Accessible for Discounts: Another benefit of being part of a group of insurers rather than using a lone agent is that you are more likely to qualify for major discounts from your insurance company. These discounts are special group bargains that are available to those who sign up for a group auto insurance policy to take money off of your premiums, because they come directly out of your pay check.
  • Money Off For Being a Valued Customer: If you have been working at your particular company for a long time, getting involved with a group auto insurance policy could really save you money. Many of these schemes slash their rates for employees who have been working at a company for a specific amount of time. The fact is the longer you have held down a steady job in one company, the more trustworthy and reliable you are, which means that insurance companies will be more willing to lower their premiums in order to secure your business.
  • Hands-Off Approach: Another great benefit of group auto insurance for the individual is that you will be fairly removed from the entire process. The majority of negotiations are held between the insurance company and the HR department of your company. Apart from some simple forms to sign, and agreements to be made with your company, all you have to do is sign up, and you are free to drive!
  • Keep Payments Flexible: It’s true that insurance premiums are a lot cheaper if you are involved in a group insurance policy. However, another benefit is that you will probably be able to alter the payments you make each month with your company. With such a large number of people signing up to your insurance scheme, your bosses are more likely to give you some leeway during that one month when you are finding funds particularly low. The benefit is that there will always be people around who can cover you for one month, and you can do the same for them when you have a little more extra money.
  • Benefits to the Business: The key to running any successful business is having happy employees who feel safe and secure in their jobs. Offering them the opportunity to sign up with a group auto insurance scheme will show them that they are valued as employees due to the fact that they will be saving money on what can otherwise be an expensive outlay. So on the face of it, group auto insurance deals seem to be a perfect solution to those expensive car costs. However, there are certain negative aspects that need to be kept in mind before any policy is taken out.

Group Insurance Rates Negatives

scheme to take out additional collision coverage

  • Non-Transferability: Group schemes are usually put in place by companies to save them money. With that in mind, it can be difficult for an individual to leave a group policy, because having one less person signed up to the scheme will mean the premiums go up for everybody. Employees should think very carefully about exactly how long they are likely to want to be involved in the scheme—once you are signed up, it can be tricky to get out of the agreement.
  • Prices Affect All Differently: Although a group policy lowers the overall cost of car insurance, it might not be such a great deal for individual drivers. For example, if you have a poor driving record and a bad credit score, joining a group scheme may be the only way that you can be covered for car insurance. On the other hand, if you are a careful driver with a strong credit history and years of experience, you may find that your individual costs may be more than what they might be if you simply insured yourself because of other more careless drivers who happen to be on the same group scheme as you. Drivers should try to find out who exactly is on their proposed group auto insurance plan and what their driving history is like before they sign up.
  • Inflexibility: Sometimes, insurance companies may only offer great discounts for certain types of insurance. For example, they may require drivers on the scheme to take out additional collision coverage, after which the company will lower certain premiums. However, any driver planning to join a group scheme should weigh the pros and cons of any particular coverage that is required to join, as it may turn out that you are unlikely to use the extra coverage and may be paying for insurance that you simply don’t need.

CONCLUSION: On the whole, group auto insurance plans are a great way to save money. Although there may be certain aspects that should be reviewed and checked before signing up, the overall lowered cost of premiums make the schemes a safe bet for the majority of drivers.

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