Agents Question GM Free Car Insurance Deal With MetLife Auto

By | July 12, 2011

  • July 12, 2011 at 1:27 pm
    Realist says:
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    GM is acting like Obama’s government. Total disregard for the future and another attemp to spread the wealth. Vote them all out.

    • July 12, 2011 at 1:46 pm
      Dubya says:
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      You guys are just nuts. The “government” said it was OK. Would you prefer the “government” stepped in and prevented a business from introducing a product into the marketplace? I thought you guys were all about personal responsibility. If it’s a bad product, let the market sort it out. Somehow, that just doesn’t apply when it’s a product that competes with you. Somehow, GM has become socialist by offering pre-paid insurance. “Spread the wealth?” Do you really think the cost of the policy is not included in GM’s pricing? How about all those people who decline the insurance? Pure profit for GM. You folks need to up your meds.

      • July 13, 2011 at 10:14 am
        Hillsborough agent says:
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        all auto insurance is prepaid. auto insurance is not a new product. If the cost is built in to GM’s pricing, then those who decline the coverage are paying for an insurance policy but are getting no coverage. Is that legal? When your local independent insurance agent accepts payment but provides no coverage they get a trip to the local pokey.

        Please explain the difference.

  • July 12, 2011 at 1:41 pm
    Hillsborough agent says:
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    “Rates under the program are not based on factors specific to insureds or garaging locations, but instead on the vehicle’s make, value, horsepower and other factors, said Cece Newell, the Oregon Insurance Division’s property/ casualty analyst.”

    So driving record is not factored in? Good news if you have a couple DUI’s on your record. Your car payment is basically free for a year with the money you’ll save on insurance. Not sure if this is the type of customer Met Life is trying to attract.

  • July 12, 2011 at 1:42 pm
    Raider Fan says:
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    Question to so called Realist, How doe’s insurance regulators of two states become Obama’s problem. Do you know the difference between State and Federal? Also if you read the entire article, Volkswagon tried to do this in 2004-05, was Bush at fault for that?

    Listen twice as much as you speak and you will go a lot farther in this life. Or not and sound angry every time you open your mouth.
    Just an opinion that means nothing unless you learn from it.

  • July 12, 2011 at 2:18 pm
    Bluemax says:
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    Lets be proactive here. 1. no new apps going to Met anywhere, 2.identify all GM insured autos in management system and send them a letter to consider the downsides and all agents should be able to think of many. Point out this is great program for those with bad scores, under the infuence drivers and espaecally those who want to provide a performance auto to a 1 6 year old with permission of course. Has anyone asked why VW stopped their plan? The Company is willing to possibly alienate their entire representative base in exchange for some new policies without sensible underwriting. Do you think those accepting this offer will be aggressively marketed for the rest of their business? For me I will file Met under “prostitute” for the time being.

  • July 12, 2011 at 2:22 pm
    JoeB says:
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    I’d love to see who is the named insured on this type of policy. Is it GM or on an individual basis?

  • July 12, 2011 at 2:48 pm
    taz says:
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    What I do not hear in the article is that a number of States whom have already turned down similar programs – I believe the number was 13 states to date.

    I have been in communication with WA OIC and their responses are not willing to take in the big picture of protecting the insureds of WA. Very frustrated, again, by that entities actions or inactions.

  • July 12, 2011 at 3:00 pm
    Bond says:
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    I can see how this can really be abused at the dealership level, salesman offering the free coverage and then advising the buyer what coverage limits to take. Anything to sell a car. Harley Davidson did this with Foremost and it has caused our agency all kinds of headaches over the years.

  • July 12, 2011 at 3:14 pm
    Bob says:
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    So if the Agency owner (substitute GM here) holds him or herself out as the master policy holder for all their insureds it would be acceptable to reduce the price or give away auto insurance for free based on the other insurance products (substitute vehicle here) the customer purchases from them? This would not be rebating correct? I also raised this issue with a State Insurance Department when Nationwide and VW did this but did not get a response as the program was discontinued.

  • July 12, 2011 at 3:33 pm
    JoeB says:
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    I’d love to know what kind of product this is. Is it one single policy with 10,000 vehicles? Or is it going to be 10,000 policies? Driver’s record does not affect rate, sounds like a commercial auto policy. Who is the named insured?

    • July 13, 2011 at 2:28 pm
      dmorrowins says:
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      what are the limits? is it just state min. What if they cancel mid term? Do they get the money or does it go back to GM. Details details. We all want to know what is going on here. In my experince Dealship buisness is crap. 1 or 2 out of 10 will stay on the books. How do the deal with the really bad drivers that have accidents? Is their a cap on this insurance ie $1,000 year and the customer pays the balance.
      Good deal for the agents who sell this. They can cross sell the heck out of it and get additonal cars or units. But how long will it last once the “free’ time is up.

  • July 12, 2011 at 4:26 pm
    Bill says:
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    What about umbrella policies? If all autos are not with the company writing the umbrella there is usually a stiff surcharge on the umbrella. Might be a surprise to those customers when they get a bill for the new auto.
    How can this program not be considered rebating?

    • July 12, 2011 at 4:34 pm
      J says:
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      Also, do the liability limits from Met meet the umbrella requirements? That makes any surcharge insignificant, if underlying limits are not met.

  • July 12, 2011 at 5:36 pm
    Sam says:
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    There appears to be a glaring issue in that the article states the policy is offered “at no additional cost” if this is the case then it is “free insurance” and Oregon law defines insurance as “The making of a legal and enforceable contract between one party (called the insurer) with another (called the insured) In consideration of a sum of money (called the premium). If there is no premium paid then one could take it literally that there is no contract…..
    Further, there would be a class action from all the auto policy holders who must pay a premium in order to receive a contract. A bit of discrimination for those who do not purchase a GM vehicle as they are required to submit to credit history; driving records; claim history and garaging locations in order for their premiums to be calculated. Not so with this group of individuals.

    • July 13, 2011 at 2:33 pm
      dmorrowins says:
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      more than likely it will be built in the cars under insurance. They pay for it but more than likely will finance 1 year of insuance for the term of the loan. I still want to know if the free insurance is state min or not. Otherwise it is a another crappy policy

  • July 12, 2011 at 6:28 pm
    SWFL Agent says:
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    Wait ’till the accidents start happening. The lawsuits will follow. I can see insured’s filing suits based using the defense of “that’s what the salesman said”, “I thought the coverage was what I needed”, etc. It’s really hard to believe any insurance company would entertain this idea. I had no idea Met was having trouble writing business.

  • July 13, 2011 at 8:10 am
    Ktown says:
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    General Motors + MetLife = shut up people they get what they want! Who say’s no to companies with a trillion in assets?

  • July 13, 2011 at 9:12 am
    UCT says:
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    This will end poorly for GM. As someone else stated, wait until the lawsuits start coming in claiming the Salesperson said this or that. There is nothing more a jury hates than a Car Salesperson. GM will get sued, settle a class action lawsuit out of court, and wish this idea had been something Ford came up with.

  • July 13, 2011 at 1:43 pm
    jtownagent says:
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    Who is providing the insurance advice (car sales person)? Isn’t this selling (giving away) insurance without a license?

    • July 13, 2011 at 2:34 pm
      dmorrowins says:
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      yep. More than likely it will be handled by the f & I person and then trasferred to a met life agent. Or they will have an apoitend agent from f &I on site.

  • July 13, 2011 at 2:21 pm
    Frisco Texas Agent says:
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    Don’t many of these insurance companies require all autos in the household on one policy? What about the stacking of liaiblity, UM or medical?

    Do these policies cover the driver’s on other cars such as their parents or on rental cars? Travelers wont exclude drivers and if they are in the household they must be included. Same for umbrella requirements.

    Also, I assume GM is reporting these expenses to the IRS so are all these policy holders reporting this as income and if not, and GM doesn’t 1099 each one of them, is GM (YES WE BAILED THEM OUT)helping advance tax evasion schemes?

  • July 13, 2011 at 2:22 pm
    Suze says:
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    What happens after the first year when all the higher risk drivers get notice of non-renewal?

  • July 13, 2011 at 3:00 pm
    Danno says:
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    I didnt hear anything about UM/UIM or PIP at all. How about Liability limits in gereral as well as underlying coverage for umbrella policies?

    • July 13, 2011 at 5:32 pm
      4carinsurancequotes.com says:
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      Danno:

      I read that limits will be above the state minimum, still collecting info on that.

  • July 14, 2011 at 10:36 am
    WA agent says:
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    PROVIDED TO ME BY METLIFE
    ____________________
    MetLife Auto & Home – Private Passenger Automobile – “In the Car” Program Introduction

    MetLife Auto & Home is pleased to introduce an innovative and simplified approach for new vehicle purchasers and lessees to obtain automobile insurance. This new “In The Carâ„¢” program is being filed in multiple states.

    This program works in conjunction with General Motors. General Motors is introducing this sales promotion on all new 2010, 2011, and 2012 Chevrolet, Buick, Cadillac, and GMC vehicles. During this promotion, purchasers or lessees of each eligible new vehicle will automatically be provided with an automobile insurance policy, paid for by the manufacturer on behalf of the customer. The cost of the insurance is not added to the price of the car, it comes out of the manufacturer’s sales promotion budget.

    If a customer chooses to retain his/her existing insurance or chooses to purchase insurance from a different company, he/she may do so at his/her own expense and this policy from MetLife Auto & Home would provide coverage in excess of the other policy. The customer may decline to participate in this program and would, therefore, not receive any coverage or benefit for his/her newly purchased or leased vehicle.

    Customers participating in this program are not subject to traditional underwriting criteria and the only eligibility requirements are that the customer have a valid driver’s license, that the new vehicle be registered in a state where the program is in effect, that the vehicle not be primarily used for commercial, fleet, or livery purposes, and that the new vehicle be one of the makes and models designated by the manufacturer as eligible for the program. All qualified individuals may participate, providing equitable treatment for all similarly situated customers.

    The coverages provided under this program have been combined into two offerings, Basic and Enhanced. The Basic package is provided to new vehicle purchasers/lessees and is paid for solely by the vehicle manufacturer. If the customer desires higher limits, the Enhanced package is available for an additional premium payable by the insured.

    Policies in this program are issued for annual policy terms with coverages and limits that exceed the minimum limits required. The coverage limits provided are:

    Basic Package
    Bodily Injury Liability $100,000 per person / $300,000 per occurrence
    Property Damage Liability $50,000 per occurrence
    Medical Expense or Personal Injury Protection (varies by state)
    Oregon includes PIP Medical Expense limit of $15,000 per person
    Washington includes PIP Medical Expense limit of $10,000 per person
    Uninsured Motorists / Underinsured Motorists (varies by state)
    Oregon Uninsured / Underinsured Motorist
    Bodily Injury $100,000 per person / $300,000 per accident
    Property Damage $50,000 per accident
    Washington Underinsured Motorist
    Bodily Injury $100,000 per person / $300,000 per accident
    Property Damage $50,000 per accident
    Comprehensive $500 Deductible
    Collision $500 Deductible
    Towing and Labor $50 per occurrence
    Substitute Transportation $25 per day / $750 per occurrence

    Enhanced Package
    Bodily Injury Liability $250,000 per person / $500,000 per occurrence
    Property Damage Liability $100,000 per occurrence
    Medical Expense or Personal Injury Protection (varies by state)
    Oregon includes PIP Medical Expense limit of $25,000 per person
    Washington includes PIP Medical Expense limit of $35,000 per person
    Uninsured Motorists / Underinsured Motorists (varies by state)
    Oregon Uninsured / Underinsured Motorist
    Bodily Injury $250,000 per person / $500,000 per accident
    Property Damage $100,000 per accident
    Washington Underinsured Motorist
    Bodily Injury $250,000 per person / $500,000 per accident
    Property Damage $100,000 per accident
    Comprehensive $500 Deductible
    Collision $500 Deductible
    Towing and Labor $100 per occurrence
    Substitute Transportation $40 per day / $1,200 per occurrence
    Glass Deductible Buyback

    Policies will remain in force for the annual policy period, regardless of the customer’s driving record, as long as he/she owns or leases the vehicle. If the customer no longer has an interest in the vehicle (e.g., the vehicle is sold or repossessed), the customer will no longer need the policy and will request the policy be cancelled. If the policy is cancelled for any reason, only the unearned premiums paid by the insured will be refunded to the insured. The customer will not be refunded unearned premiums paid by the manufacturer.

    As noted above, automobile insurance through this program is paid for by the manufacturer to each eligible purchaser or lessee of a new qualifying vehicle. There is no application to be completed, nor does the customer go through any underwriting or acceptability process. Policy issuance is initiated by us when the dealership provides us with information regarding the vehicle purchase or lease. The dealership is not selling, soliciting, or negotiating the sale of insurance, nor discussing coverage, and is not collecting any compensation for the insurance coverage offered to the customer. The dealership does not ask any underwriting or coverage questions, and does not gather or provide any information that is not already part of the vehicle purchase or lease process. The dealer receives no compensation from the insurance company. Information about the vehicle purchased or leased and the owner/lessee is passed to us through a secure website, with the purchaser’s/lessee’s consent, created by us for the purpose of administering this program. Upon receipt of the vehicle purchase or lease information from the dealership, a welcome package of information is produced for the customer. This welcome package includes a welcome letter, insurance binder indicating the provided coverages and limits, a frequently asked questions flyer, and company contact information. Dealership personnel are not allowed to discuss insurance coverages nor limits being provided under this program. If the customer has any questions, needs additional information, or would like to discuss the insurance policy coverages and limits, he/she must contact us. Customers may contact the company while they are at the dealership, or any time thereafter. Company representatives are available to the customer, through our call center, at any point in the process and throughout the policy term.

    Once the customer has taken possession of the new vehicle, an automobile insurance policy will be issued using our currently filed and approved auto policy and endorsements. A new endorsement specific to this program has been approved for use.

    Upon expiration of the manufacturer-paid policy term, the company will notify customers of their upcoming expiration dates and discuss options available to them for continuing coverage for their vehicles. Subsequent policy terms will be issued at the customer’s expense and are subject to traditional rating and underwriting practices.

  • July 14, 2011 at 1:50 pm
    Don Moe says:
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    Washington agency owner: This is a mess waiting to happen. Car Dealers have a hard time with credit insurance let alone car. Having done business with Car Dealers I can assure all that this will fail. WA OIC does not care that the folks doing this are not licensed nor qualified to explain or sell auto insurance. Go figure!

  • July 14, 2011 at 1:58 pm
    Don Moe says:
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    WA policies are house hold policies, which means everyone in the house hold is covered unless excluded. Is Met going to exclude drivers? How about other vehicles in the house hold…? Is the owner the only driver covered….to many questions and not enough answers…Again OIC WA is not paying attention and really protecting consumers in WA….

  • July 14, 2011 at 2:36 pm
    JoeB says:
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    WA agents, do your insureds get surcharged for at fault accidents & tickets? What happens when surcharges get added on the policy renewals? Will these extra charges be paid by the GM sales budget? And who pays the GM promotional budget? How much of GM do the taxpayers own? Both GM & Met are going to get burned on this one.

  • July 15, 2011 at 2:18 pm
    P Purple says:
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    What a hissy fit all of you are having! Thank you to “WA agent” for the information from MetLife – it seems they are addressing most of the concerns you are raising. Having been a Progressive & Travelers agent for 15 years, this concept doesn’t bother me one bit. Many companies have more than one channel for delivering their personal auto insurance product. As an independent agent, I am not in competetion with Travelers & Progressive when they write a direct policy – we attract a different type of client. And if any of your current clients are fortunate enough to be given this savings when they buy a new GM car, I’m sure you will be able to help them with any questions or changes that they need in their umbrella, and you will only enhance your relationship with them by helping them save money.

  • July 18, 2011 at 12:12 pm
    savannah says:
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    Boy, I think everyone should take a step back for a minute and gather all the information before you start making conclusions about what the outcome of this is going to be. We are in the United States of America and this country is built on new and innovative ideas. Some of them may sound crazy, but many times those are the ones that put us at the head of the class. Thank you “WA agent” for the information from Metlife. It is good to see someone is doing their homework and getting some facts. It sounds to me like Metlife is doing their job and covering the basis. What a great bonus for our Insured’s to be able to get free insurance for a year, regardless of their credit or driving record. That is exactly what some people need . . . is a break.

    • July 18, 2011 at 2:58 pm
      Bob says:
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      Perhaps you’re right savannah – new ideas to put the independent insurance agents out of business are just what the country needs, more jobs to India and Ireland that will certainly keep our country at the head of the class.
      The people who need a break are not necessarily the ones who can afford a new car – they’re the ones who must keep their old klunkers alive so they can get to work every day – like me.

  • July 18, 2011 at 12:46 pm
    Ross Hall says:
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    When the same thing was done in the UK in the late 1980s (keep up, USA!) a few people got caught out due to the restrictions on the cover. For example, the cover was for Social, Domestic & Pleasure + Commuting, but people who moved between different client locations were buying cars and therefore not covered.

    A localised advertising campaign to raise awareness of this issue could be a huge opportunity for a smart independent agent, a chance to demonstrate knowledge and expertise to a business community. If memory serves me correctly the small firm I was working for at the time grew its commercial vehicle book when we took this stance.

  • July 18, 2011 at 1:50 pm
    Inquiry says:
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    I would beg to differ that GM is not receiving compensation for the policy written. They may not receive a commission check directly, but they are receiving a benefit.

  • July 19, 2011 at 10:25 am
    Deb says:
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    How is this not considered a form of rebating?

  • July 19, 2011 at 10:57 am
    Katherine Hefner says:
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    The def of rebating is – giving or offering some benefit other than those specified in the policy, to induce a customer to buy insurance. Rebates are illegal. …. People will always take advantage of a free deal in any economy, it’s when the year is up that we will hear those people really speak. It will be an interesting year to watch this play out.

  • July 19, 2011 at 2:51 pm
    pecosinsurance@gmail.com says:
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    How do you rate household members? especially those are at age 16 to age 20 something?



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