Am I Exposing Myself?
Written many years ago, as I was exiting Nortel. Would my group insurance discount with AVIVA disappear? In the end I changed companies, as the rates were cheaper elsewhere. Always shop around.
For the longest time I have been insuring with A Very Interesting Vivacious Atypical insurance company (no that is not their name, but there is a hint in the name I call them), as part of a Group Insurance for Nortel Employees. The rates seemed fine and the one time I had to deal with them, they were fine. Now I no longer am a Nortel Employee what does this mean?
Could my insurance company simply revoke my insurance because I am no longer part of the group? Would they suddenly send me a bill cancelling my discount? Am I at risk?
I decided the best way to deal with this is to be candid and then see what deals I could make if I used a simple full frontal attack. I called my insurance company and asked “I no longer work at Nortel, what does this mean?”, and the first woman I spoke to was quite jovial and jocular about the whole thing and said, “Well I guess since we sent this out to you, we can’t simply cancel your coverage, so you can just continue paying the rate we sent you”. This sounded wonderful, fantastic, so magnanimous and absolutely full of crap. I thanked the young lady and decided to call again on another day.
The second time I called I got a much more dower sounding young man, who honestly answered, “I have no idea what this means, let me go find out”, this made me feel much more confident that I might be getting a real answer and not just an off the cuff comment. The gentleman returned and confirmed what I heard previously, since I already had a quote for my insurance, that is the rate for the coming year. The gentlemen then went further to say that I was not the only person in this position, and his company had not made a statement about what should be done about these policy holders (given the “group” they are in cannot exist much longer). The gentleman then said I should just pay for the policy and that if something changed the company would contact me about what might happen.
From this phone call I can surmise:
- There is no policy in place yet on how to deal with former Nortel employees in this insurance group, however, I also guess that there are many more non-Nortel employees now in this group than there are actual employees.
- If the Insurance company in question thinks about it, and sees that I am a good customer they may offer me a similar rate under a different “group” name.
- There is a degree of risk if I simply renew with this insurance company
It is on my file that I am no longer a Nortel employee, thus there is no “intent to be fraudulent” on my part, but I guess my question would be: How big a risk am I taking by simply renewing this policy given I no longer qualify to be in the “group insurance”?
Comments or opinions welcome.
I’m not an expert in insurance, but I think the reason for a group discount is that a company beleives that people in that group (e.g. certain professions, graduate from certain school or employees of a company) have a lower risk than the average population. The fact that you not longer work for Nortel does not make you a higher risk driver per se, so your risk profile shouldn’t change a lot, at least in the short term. Do for the company there shouldn’t be any motivation to start charging you more, except for being able to milk you for more money:).
George’s answer sounds right to me, not that I’m an expert. You might consider seeing whether your new employer has an arrangement for car insurance and getting a quote there. Even if you stick with your current plan because it is easier for now, it would be good to know if you can do better with your new employer for the next renewal.
I don’t think you’re at risk. I’ve read my (group rate) insurance policy, and as there is no clause stating that I must remain part of the group to qualify, they cannot revoke coverage or alter the rate before the next year rolls around. Mostly group rates are a marketing ploy to get people to call their company first…they wouldn’t take you on at a rate that wouldn’t be expected to generate a profit.
They can cancel the offer before you accept it. They opted not to do that over the phone. But once you agree to this year’s rate, you’re locked for the year.
That said, the real risk you’re at is to be overcharged because they’re depending on inertia to keep you as a customer.
I used to insure with Monnex, who offer lots of group rates, including the university alumni group that I was part of. I called a few brokers before setting it up, and when they heard I was in “that group,” they said it wasn’t even worth their time to quote against it. After paying what turned out to be an exhorbitant rate for a year, I tried again. This time insisting that I get a quote from the company that does my employer’s insurance…they didn’t want to “waste their time” either. I saved almost 50% (would have been 45%, but I also increased my deductible).
I also had a Tad Discount group insurance (home) which was maintained during the year of the workforce-discounting event. Upon renewal I was just moved to the higher, regular non-group rate. This year moved to the even higher, still-staying-with-us suckers rate.
This might be something to look into with the Financial Services Commission of Ontario, but my first thought would be that there’s no risk, at least for the first year. If you sign up for and pay for an insurance policy, you’re signing a contract with the insurer – as long as there’s no fraud involved, they’re pretty much obliged to honour the policy if you need to make a claim.
My guess would be that at some point they decide you’re no longer eligible for “group” rates, and they send you a renewal at normal market rates. At that point, you could just go shopping for another policy with another company, and see if you can get a better deal elsewhere. It’s a good idea to do that with insurance in any event.