Agents Concerned by GM “Free Insurance” Pilot Program

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UPDATED: Mar 13, 2020

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Buy a new GM car or truck, get a free year of full coverage insurance.

Buy a new GM car or truck, get a free year of full coverage insurance. (image by Chevrolet.com)

Earlier this week, we reported on the General Motors promotion currently running in the Pacific northwest states of Oregon and Washington that provides buyers of any new 2010, 2011 or 2012 GM brand (Chevrolet, Buick, GMC and Cadillac) car, truck or crossover a year of included full coverage insurance from MetLife. Now there is a firestorm of controversy brewing with independent insurance agents over the program.

Bob Rusbuldt, President and CEO of the Independent Insurance Agents & Brokers of America (IIABA) said “We have raised licensing and regulatory concerns, along with important consumer issues.”

Part of the issue lies in how MetLife auto insurance has been traditionally sold – through independent insurance agents. The insurance is also being provided without concern for traditional underwriting criteria – meaning the only requirements to obtain the insurance is to have a valid driver’s license and the purchase of a new General Motors automobile. Things such as driving record, age, sex and other rating factors that are normally used to quote policies are not relevant to obtain the MetLife insurance policy.

John Timm, president of the Independent Agents and Brokers of Oregon says “There are a lot of unknowns; it’s a very vague offer. It’s doubtful that consumers will be well served.”

MetLife indicates that they’re sticking with the promotion, and that they see it as a way to increase not only their own brand recognition and gain new customers. They believe that independent agents will benefit as well, since they’ll assign customers to such agents if they continue to use MetLife after the free year of insurance ends.

In the end, the GM offer really isn’t about car insurance, but rather to sell more cars and trucks. The cost of the insurance policy is paid out of General Motors’ marketing budget, rather than simply being added to the price of the car. The program was given approval by insurance regulators in both states before being launched, and we highly suspect it won’t have a material impact on independent insurance agents.

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