An independent insurance-agents' group is protesting a program where buyers of new GM automobiles receive a one-year auto-insurance policy at no extra cost through MetLife, but MetLife says the plan complies with state regulations.
The Professional Insurance Agents Western Alliance says the program—which gives a one-year auto-insurance policy to buyers or lessees of any new Chevrolet, Buick, GMC or Cadillac car, truck or crossover—contends that the program may not be legal.
PIA Western Alliance Executive Vice President Clark Sitzes says in a statement that the group is concerned that business is being taken away from independent agents.
Sitzes questions whether GM sales associates are acting as agents in selling both the car and insurance program—which he says would be a violation of the law.
He also raises the issue of anti-discrimination laws, saying that if the price auto buyers pay for their policies differs from what other MetLife customers pay, that may constitute discrimination.
"Consumers utilize licensed, professional independent insurance agents to provide them with a range of insurance options, counsel them, assist them in coordinating coverages and advocate for them," says Sitzes.
The GM program, which was launched in Oregon and Washington, may be rolled out more widely in the future. Sitzes says the program has received permission to be marketed in 17 states.
Under the program, buyers of GM autos are offered an auto-insurance policy that covers damage to the car for one year. The auto maker picks up the premium for liability, collision and comprehensive coverage.
Those who decide not to go with the program do not receive a discount on their automobile.
In an e-mail response to questions from NU, David Hammarstrom, a MetLife spokesman, says the program "has been fully vetted and approved in advance by appropriate insurance-regulatory bodies" in the states of Washington and Oregon.
He says the company has long been noted as one that utilizes "multi-channel distribution" to sell insurance and that the "innovative program was brought to us, and is brokered by, an independent insurance agency." MetLife did not identify the agency.
To get the insurance, Hammarstrom says the customer must have a valid driver's license; the vehicle must be registered in the participating state; and the vehicle cannot be used for commercial, fleet or livery use.
Customers can choose to:
- Take the basic policy and not include the vehicle on their existing policies.
- Continue with their existing policy and add the new car to the policy using the GM policy as "additional coverage from this program."
- Decline the coverage altogether.
The PIA Western Alliance, which represents agents in nine states, says it is working with regulators to determine the legality of these programs.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.