Most individuals need a combination of home/tenants and auto insurance to protect their assets, satisfy government regulations, comply with loan or lease conditions, or to help ensure there is coverage in case of third-party liability. Many, however, do not take advantage of group rates for insurance to help reduce the amount they pay for coverage. One of the reasons for this is that they are unaware that they may qualify for group rates and pay the undiscounted rates quoted to them by their selected insurance broker, agent, or insurer. Group rates do not in of themselves guarantee lower premiums, however, they are a good and logical starting point for your personal rate comparison.
Finding out if you are eligible for group insurance rates is usually a matter of doing some basic research. Many employers and associations sponsor group insurance plans for their employees or members as a voluntary benefit. Alumni of various educational institutions are also sometimes eligible. In fact, whether mid- to large-size employers or associations offer these programs or not, most are eligible to have one, if they care to sponsor it.
Why Group Insurance Programs?
If you’re an individual, the most obvious benefit of a group insurance program is the discounted premium rate offered by the insurer. In the majority of cases, a discount of 10% to 30% off regular insurer rates for car or home insurance is considered normal.
Employers often look to group insurance programs as a way of rewarding employees for their continued loyalty or enticing prospective employees to work for them. Implementing a program is relatively easy with the sponsoring organization only responsible for helping to distribute marketing materials as required – this generally takes the form of providing distribution lists or facilitating actual drops. There is rarely any cost to the organization to offer a group sponsored program. Participation by organization employees or members is strictly voluntary and there are usually no minimum participation requirements.
Characteristics of Group Insurance Programs
In general, organizations that qualify for group insurance programs have a minimum of 250 employees/members – with the majority being over 25 years of age. It is normally a requirement that employees are either full-time or permanent part-time. Spouses and dependent children of sponsor employees/members are also generally eligible to participate in group insurance programs. Although sponsors cannot be involved in the licensed activity of actively selling the program, they are required to agree to a marketing plan and help facilitate the distribution of marketing materials to launch the program. The marketing plan will differ from sponsor to sponsor, but elements of the plan could typically include announcement letters, print and electronic brochures, posters, newsletter articles, on-site seminars, mail campaigns, email campaigns, and websites.
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