Forming groups is one of the fundamental characteristic of human relationships. Whether it is for personal or professional reasons, a group can prove to be valuable especially in times of need. There is a social bond that keeps the members intact so that some of the activities can be carried out collectively.
Such kind of cohesion is now present in insurance policies and it is called group insurance. This kind of insurance requires each member of the group to pay a certain amount so that they can pay for the premium of the insurance. Sure, the premium is a lot more expensive than individual premiums however the payment was to be undertaken by the group, so if you divide it among the members you can see that it is actually cheaper. In a sense, it is only a single insurance policy. However, its unique characteristic is that it covers each and every member and gives them the same amount of benefits in time of accidents. Group insurance policies were first seen in the health care system wherein a single insurance can cover up to a certain amount of family members or a certain institution like a university. Such phenomenon is also present in real estate industry wherein you see the homeowners of a residential estate or people in a condominium pay one insurance policy that covers up the entire building or the entire estate.
Group insurance policies are also available in the auto insurance industry.
Like in health care or in real estate, the group auto insurance is suitable for institutions, groups, or organizations with a strong membership. The same principles apply: the members of the company or group would pay their contribution so that they can collectively pay the premium. When we look at companies, most of the time the vehicles that they use for transportation is a property of the company. Now, instead of applying for individual non-owners auto insurance, group auto insurance can help the members pay for less but enjoy the same benefits.
Moreover, there is an added dynamic to it. If one of the members feels that he or she does not need full coverage insurance or that they cannot pay even the amount of the contribution, they can opt to pay for less and still receive a considerable amount of insurance whenever something bad happens. Hence, groups can tailor it to fit the paying capability of each and every member.
Group auto insurance is also suitable for people who own more than vehicle. If you own a relatively large collection of cars (i.e. you have a car for each day of the week or you can now build a car museum), you can save a lot of money if you avail of a group auto insurance rather than applying for individual car insurance for each car that you own. That way, it would also be easier to manage because all of your cars are accounted for in one contract. So it won't really matter which car you are using at the time of an accident.
Resource: http://www.isnare.com/?aid=406392&ca=Finances
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