Back in the 1980’s, Yamaha tried this marketing strategy with it’s street legal motorcycles. They furnished basic limits coverage on approved forms through their selected insurance company. It was approved in each state. The hook that sunk the “model” was the ultimate cost to Yamaha and the insurnce company. Everyone knows the “risk” of youth owning/riding high performance street sport bikes. I’d have to research my memory for more details, but as a Yamaha dealer AND longtime insurance agent….I was very, very interested in the concept. It didn’t work, though!
In most states, paying for one’s insurance as an incentive to purchase a product (car) is considered rebating and illegal.
Obviously, in Illinois and Wisconsin this seems to not be a problem. When Nationwide’s loss ratio sky-rockets, how long will it take for them to inform VW they are non-renewing the policies within the program?
What do they propose to do in households with multiple cars? Most companies offer multi-car discounts to avoid duplication of coverage or disputes over newly acquired vehicles and drive other car coverage.
What limits and coverage’s are offered? What about other vehicles owned by the same person or familiy?
Very interesting….would like to know more and results of test program…
Linda
Wow! These guys really want to lose money. Have they forgotten the reason why we have deductibles? People have no deterrent to playing bumper cars and charging everything to the ‘free’ insurance policy. Every minor ding or scratch will be claimed, things that normally fall under a deductible. These companies will be nickel and dimed into losing money through this business model. I hope that I’m missing something here because this sounds like bad idea, very bad.
That might be part of the gimmick that the deductibles are so high that the person has to essentially pay for the physical damages out of pocket. I can’t see them letting you choose a $0/full deductible; the coverages must be very strict and limited too. I hope they have an iron clad policy or some lawyer will have a strong ‘bad faith’ case. They might also require that the car be fixed only at the VW dealers too. So basically VW only pays for liability coverage.
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Got to admit it might be a brilliant scheme for the car company that wants to attract young drivers, who are more likely to value the free coverage.
Back in the 1980’s, Yamaha tried this marketing strategy with it’s street legal motorcycles. They furnished basic limits coverage on approved forms through their selected insurance company. It was approved in each state. The hook that sunk the “model” was the ultimate cost to Yamaha and the insurnce company. Everyone knows the “risk” of youth owning/riding high performance street sport bikes. I’d have to research my memory for more details, but as a Yamaha dealer AND longtime insurance agent….I was very, very interested in the concept. It didn’t work, though!
In most states, paying for one’s insurance as an incentive to purchase a product (car) is considered rebating and illegal.
Obviously, in Illinois and Wisconsin this seems to not be a problem. When Nationwide’s loss ratio sky-rockets, how long will it take for them to inform VW they are non-renewing the policies within the program?
Interesting concept!
I agree, an interesting “out of the box” concept…but a real working model?…I do not believe it will last long, nor will many states allow it.
Wait til this gets to NY and Mr Spitzer sees it!
What do they propose to do in households with multiple cars? Most companies offer multi-car discounts to avoid duplication of coverage or disputes over newly acquired vehicles and drive other car coverage.
What limits and coverage’s are offered? What about other vehicles owned by the same person or familiy?
Very interesting….would like to know more and results of test program…
Linda
Wow! These guys really want to lose money. Have they forgotten the reason why we have deductibles? People have no deterrent to playing bumper cars and charging everything to the ‘free’ insurance policy. Every minor ding or scratch will be claimed, things that normally fall under a deductible. These companies will be nickel and dimed into losing money through this business model. I hope that I’m missing something here because this sounds like bad idea, very bad.
To sell more vehicles, why not try lowering the price?
That’ll move more vehicles!
That might be part of the gimmick that the deductibles are so high that the person has to essentially pay for the physical damages out of pocket. I can’t see them letting you choose a $0/full deductible; the coverages must be very strict and limited too. I hope they have an iron clad policy or some lawyer will have a strong ‘bad faith’ case. They might also require that the car be fixed only at the VW dealers too. So basically VW only pays for liability coverage.