Independent insurance agents have some questions about the free auto insurance that GMC is offering some of its customers. They see potential problems with how those policies will interact with other auto insurance policies that a consumer already has.
Recently, GMC teamed up with MetLife Auto & Home in order to attract more customers. General Motors is giving one year of free auto insurance to customers who purchase a new 2010, 2011, or 2012 GMC car, truck, or crossover vehicle before September 6, 2011. The auto insurance policy will cover liability and damage. Right now, this program is only being offered in Oregon and Washington.
Some independent insurance agents have questions and concerns about this auto insurance policy, however. President and chief executive officer of the Independent Insurance Agents & Brokers of America, Bob Rusbuldt, has said that the free insurance “presents a bevy of legal issues”. These issues include questions about licensing and regulatory concerns. President of the Independent Agents and Brokers of Oregon, John Timm, feels the policy raises “a lot of questions” for consumers.
Some of the questions are thought provoking. Often, people buy a brand new vehicle when they need to replace the vehicle they are driving currently. The old vehicle is covered by an auto insurance policy. It has become fairly common for people to bundle their auto insurance with their homeowners insurance in order to save a little bit of money on both.
If that person buys a new vehicle from General Motors, he or she will receive free auto insurance (through MetLife Auto & Home). What happens to the discount they were getting by bundling auto and homeowners insurance from the same company?
What happens if the person wasn’t replacing a vehicle, but was instead buying an additional one? Some insurance companies offer automatic coverage for people who have all of their vehicles insured by that company. The new vehicle from GM is going to be covered by a different policy. What affect does that have on the automatic coverage through the first policy?
The need to rent a car brings up other potential problems. Which insurance policy is going to cover that? Will it be the auto insurance policy that the person had first, or will it be the free policy the person got from the General Motors offer? Which one should the person send the claim to?
There is also the concern that by offering this free insurance, General Motors is acting like an insurance agent. Could this program violate the state law in Oregon, (one of the states where the program is offered)? These questions, and others like them, will need answers.
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