More can equal less when buying auto and home insurance.
Members of professional and trade organizations, alumni associations and groups related to certain hobbies or interests often can save on auto insurance and home insurance, with discounts typically ranging from 5 percent to 15 percent.
“Affinity programs” provide another avenue for consumers looking to trim what they spend on essential budget items like insurance while giving insurers access to large pools of prospective customers. It’s an extra perk for your financial investment in an organization or profession that’s important to you.
Professional and trade associations have been offering benefits to their members as a way of creating an incentive for people to join and renew their memberships, says Amy Bach, executive director of United Policyholders, a nonprofit organization that monitors the insurance marketplace.
Group discounts are offered to members of large national associations as diverse as the AARP, National Rifle Association and National Association of Realtors, as well as educators, members of the military, and people in finance, medicine, science and other professions.
Experts say affinity programs often are a good deal for consumers, as long as the group discount is something they couldn’t get on their own.
“Generally speaking, a group that negotiates with an insurance company as a bulk purchaser has more leverage, more ability to get a sweeter deal than an individual,” Bach says. “The insurance company is thinking, ‘OK, we have the possibility to score a large number of customers, so we’ll sweeten the deal for that purpose.’ ”
Brown University in Providence, R.I., has seen tremendous growth in alumni and employee participation in its affinity program with Liberty Mutual Insurance, which began with discounts for alumni in 2002, says Ann Rockwell Roe, director of business operations at Brown. More than 8,000 alumni (among about 70,000) and about 1,000 employees have signed up.
“It’s been popular for a couple of reasons,” Roe says. “Obviously, everyone wants to save money, so the discount is a big draw. The partnership is with a well-known insurance company, so the name recognition is there.”
Brown is one of an estimated 12,000 groups – including alumni associations, trade associations, credit unions, banks and car manufacturers -- that make up Liberty Mutual’s affinity program, a large part of the company’s business, says Tony Rotondi, senior managing director of affinity marketing at Liberty Mutual. Liberty Mutual has been adding more than 1,000 affinity groups a year for the past several years.
The Hartford’s affinity partnerships include a new program with the American Kennel Club that provides discounts on auto and home insurance for folks whose dogs are AKC-registered.
GEICO’s affiliate program features more than 275 partners, ranging from the American Business Women’s Association and the National Society of Accountants, to sororities, fraternities and alumni associations.
Farmers Insurance extends discounts to eight main professions – police officers, firefighters, doctors, registered nurses, engineers, scientists, educators and members of the military. These discounts seek to reward people in heroic occupations, says Patty Hobson, director of strategic marketing at Farmers Insurance.
Taking advantage of savings
Here are five things you should know when pursuing discounts on auto and home insurance through your group membership:
1. Make sure the company is licensed in your state -- before you start the process.
2. Keep in mind that discounts vary by state, depending on insurance regulations.
Rotondi says Liberty Mutual’s discounts typically range from 10 percent to 15 percent for auto coverage and 5 percent to 10 percent for home insurance. Farmers’ discount for auto insurance is the highest in California, ranging from 15 percent to 18 percent, Hobson says. In other states, Farmers' auto discount is generally 5 percent; the discount for home insurance is 5 percent in all states. GEICO’s affinity discounts generally are up to 8 percent in most states.
3. Make sure you’re getting the right coverage for your needs. It’s easy to be swayed by a sweet-sounding deal.
4. Be comfortable with the insurer. One benefit is that your alumni association, for instance, already has done some of the homework on the insurer, says Peter Kochenburger, executive director of the Insurance Law Center at the University of Connecticut School of Law. You still should do research by checking out the insurer's reputation and financial status. Companies such as A.M. Best offer that sort of information.
5. Watch out for any conflict of interest. Ask whether your association or organization has a role in either screening or processing insurance claims, Bach says. If so, the association or organization could discourage you from filing a claim because of how it would reflect on the group.