OAIN: Free Auto Insurance Deal Has Regulators' OK

A temporary sales incentive through which General Motors is insuring new cars, trucks and crossovers for free may be controversial, but it's legal, regulators in the Pacific Northwest told Online Auto Insurance News this week.

Officials said the promotion breaks no laws by providing annual Oregon and Washington auto insurance policies to new vehicle buyers at no cost.

The incentive, which gives anyone who buys a new GM by Sept. 6 a yearlong MetLife auto policy, has drawn complaints from associations that represent independent agents in the region.

The groups questioned the legality of the offer, pointing out that state statutes bar providers from giving away policies at no charge. But regulators in both states say that, because GM is paying the premiums, the offer does not violate any laws.

"We've looked at it closely and as far as we can determine, it is allowed under Washington state law," said Rich Roesler, a spokesman for the state's insurance department.

Cece Newell, a property and casualty technician with Oregon's insurance division, said she understands agents' concerns about the unusual GM/MetLife promotion. But she said the agents who have contacted her office with questions "were satisfied that we had done our homework before we approved" it.

The MetLife policies provide GM buyers with more than 500 percent the amount of total liability coverage legally required in both states and include comprehensive and collision coverage that neither state mandates.

Source: http://www.oregon.gov/ODOT/DMV/driverid/insurance.shtml

Officials at GM and MetLife have said they are considering expanding the trial insurance offer to other states if there is sufficient consumer demand.

Agents' associations have criticized the offer on other grounds, claiming that it takes business away from their members and provides buyers with insufficient advice about policy issues.

The groups have also questioned how the policies would affect consumers who own more than one vehicle and have existing MetLife coverage and how they would apply to rental vehicles.

Newell said consumers who take part in the promotion are advised to contact MetLife with any policy queries.

To learn more about this and other coverage issues, readers can go to http://www.onlineautoinsurance.com/washington/, where visitors will find informative resource pages and a quote-comparison generator that can help consumers find the best rates quickly.