Some states‚Äô insurance commissions and insurance industry alliances are not pleased with‚Äô new free insurance incentive to spur new-vehicle purchases.
GM is collaborating with MetLife Home and Auto to provide a no-cost, one-year auto-insurance policy as an incentive to attract new-car buyers.
The offer, currently in test phase, runs through Sept. 6 in Washington and Oregon, traditionally heavy import vehicle states.
GM spokesman Tom Henderson says the auto maker is testing the program ‚Äúto determine consumer appeal of insurance as a new standard feature,‚ÄĚ like a warranty packaged in the cost of a new vehicle.
Departments of insurance of both states in which GM is piloting the program approved of it, he notes.
However some quarters of the insurance industry question its validity.
In National Underwriter, a trade publication, the Professional Insurance Agents Western Alliance ‚Äúcontends the program may not be legal.‚ÄĚ
Eighteen states have approved program filings. But the Indiana Department of Insurance asked MetLife Home and Auto to withdraw its filing, as it will not be approved in Indiana based on legality issues there.
Henderson cites research indicating 23% of vehicle buyers say they could not afford a new car because of the insurance coverage required.
‚ÄúThis program is one way we hope to make buying a new GM vehicle more affordable.‚ÄĚ
From a marketing standpoint, ‚Äúit‚Äôs a way to cut through the clutter and get people‚Äôs attention. We think we can do that and that is why we‚Äôre testing this program in just two states to see how consumers respond.‚ÄĚ