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The Pros and Cons of Group Auto Insurance


Group auto insurance is a type of coverage where several people are insured under one umbrella policy. This is the most common coverage policy availed of by large groups, which usually include auto clubs, corporations, large families and transportation companies.

In availing of this type of coverage, the insured may choose between two options: either get a separate policy for all vehicles under it and make them annexes of one general policy, or make use of a single policy for every automobile unit. The former option is the more practical one, however, since making use of the latter option has resulted in more problems than benefits.

It is usually a good idea to make use of group auto insurance in securing more than one vehicle at the same time. The thing is, when there are advantages, there are also disadvantages.

Advantages of getting a group auto insurance coverage are higher discounts, faster transactions, simpler negotiations and easier premium payment options. Car insurance companies offer large discounts when a client avails of more insurance policies. The trade-off is simple – the company earns more and they give you a bigger discount in return. Some companies even give one policy for free. This is the reason why corporations make use of this type of indemnity agreement to insure their company vehicles. They can avail of big discounts and processing is much simpler.

Transactions with the provider are also made faster since you only have to consider getting one policy to cover all your vehicles. Instead of getting one contract for every car, you get one to cover everything. All it takes is a single signature, and you are done. This also gives way to simpler negotiations. With this, it is easier to bargain for lower premiums and more economical payment schemes because of the simplified process you started with. Finally, premium payment schemes are made much easier. You just give a lump sum that will correspond to the amount required for each vehicle. You no longer have to specify what amount will go to which automobile.

The disadvantage is that if one person in the group has a bad driving record or has been considered by the provider as having a high risk factor; other beneficiaries will also suffer the negative effects. Liken it to a “bad tomato in the basket” case. The rest of the group will have to bear the burden of having a member who has received bad points on his driving scoreboard.

In general, getting a group auto insurance policy is a smart move. There are greater benefits than burdens, and the process is simple, effective and practical.