What is a Group Auto and Homeowners Program?

It is a system where employees can purchase personal auto and homeowners insurance at reduced rates and pay the premiums through payroll deduction.

How can this be advantageous?

For the employer, you can add a benefit with no direct cost that solves a major financial obligation of employees. Your employees receive the convenience of payroll deduction, reduced premiums, and quality service.

Why are the premiums reduced?

Reduced costs in an employer-sponsored plan are due to three factors:

Decreased marketing costs--The costs to communicate to employees, quote their insurance, and initiate their policies are dramatically reduced. 

Better risk selection--Under the Group program we know the employee’s work status, we know their industry, and we are reaching a true cross-section of people from the lowest paid to the highest paid.
 
Administrative costs--There are great savings in sending one bill for many people compared to multiple bills throughout the year for one person.

How much work will this require on our part? 

You will not need to increase staff for this program nor have current staff become Group Auto/Home experts. These programs are totally outsourced. You do not rate policies, pay claims, make policy changes, or enroll employees. This is done through a customer service center. Problems not resolved between the employee and the service center are directed to groupauto.com.

What functions do we, the sponsoring employer, provide?

Your functions include reviewing the Communication Program that we provide and facilitating the payroll deduction process.

What is the cost/benefit ratio for this undertaking?

There is some initial programming and an hour or two of staff time per month per 1,000 employees. The premium savings per 1,000 employees generally is between $60,000 and $250,000 per year. 

What insurance companies provide Group Auto and Homeowners Programs?

There are a number of companies available today and each year additional companies enter this marketplace. Only the highest quality companies, who are well known by all of your employees across the entire United States, are used.

What type of discount will our employees receive?

That depends on the carrier we help you select to implement the program. Discounts of 5 percent to 20 percent or greater are the norm.

Are there minimum participation requirements?

No. A properly initiated program, due to its cost effectiveness and convenience, will attract many employees. While 15 percent participation is expected in the first year, a participation level of 30 percent is not unusual. After a few years we have seen enrollment as high as 65 percent.

Are policies individually underwritten?

The premium for each policy is tailored to the individual’s vehicles, driving record, and driving status. Most importantly, due to modern rating practices, in most cases 100 percent of your employees will be able to purchase insurance though this program, even those with less than perfect driving records.

What happens when employees terminate or retire?

Employees can continue the coverage when they leave your company. Their premiums may change depending on which insurance carrier we are using. Typically, retiring employees continue to receive the group discount.

What about Employer liability?

The insurance carrier will agree to indemnify the employer for claims brought against them as a result of the program. Unlike your health care program, employees are not a certificate holder to a master contract. The employee is the contract holder. Additionally, in the last 20 years, we have never seen an employer sued as the result of an employee problem with this program.

How is the program communicated to employees?

The goal of the Communication Plan is to provide employee awareness of the program and to mesh with your corporate policies and culture. A program can include posters, e-mail, newsletters, payroll stuffers, mailings, benefit fairs and other means that you typically use to communicate with your employees. The insurance carrier and D. M. White Corporation handle all costs. There are no enrollment time period restrictions and the program can be initiated at any time of the year.

What about the payroll interface?

The billing process is tailored around your payroll system. You will receive the billing on the dates you request. The billing can be transmitted through various mediums including fax, paper, diskette, tape or a Value Added Network such as IBM’s Advantis Network.

What about bill reconciliation?

The insurance company keeps records at the account level and also the employee level. You simply remit the amount deducted. The insurance carrier, not the employer, reconciles any difference from the amount billed.

What recognizable employers have established Group Auto Programs?

These national companies and many more have established Group Auto and Homeowners programs, most of them within the last few years:

 

Cigna Federal Express UPS
Wells Fargo Liz Claiborne, Inc Eddie Bauer Stores
Intel Microsoft Digital
US Air


Can employees access information about a Group Auto program over the
Internet?


Most insurance companies have capabilities in this area and those capabilities are increasing rapidly. The ability to enter information for rate quotes and other information are currently available. Groupauto.com assists in this process by being a source of information and problem solving for enrolled employees.