According to the Enhanced Insurance glossary, an affinity group is “a group formed around a common interest, which is then turned into an association with formal or informal membership. This can be based on hobbies, jobs, and clubs. An insurance company then recognizes the existence of the association and markets products to the entire group, rather than its individual members.”
Affinity groups include a wide-variety of organizations and businesses like AAA, AARP, university alumni associations, military organizations, and fraternities and sororities. You may be a member of an affinity group and not even realize it. For example, if you graduated from a Big 10 college, you may qualify for a discount. Or, if you use a local community bank, they may have a relationship with certain insurance companies. Review the organizations and businesses that you belong to and speak with your independent insurance agent to see if any of them qualify you for a discount.
Home insurance companies offer discounts to members of affinity groups. The group usually has an agreement with certain insurance companies to encourage its members to purchase insurance through specified providers. On average, this discount is between 5 percent and 20 percent. Affinity groups offer access to reduced-rate group insurance policies and discounts off individual policies.
Home insurance companies like to partner with affinity groups because their networks usually have a large number of individual members who are all potential customers. Insurers also view members of affinity groups as having a lower insurance risk than others. As a result, they offer members better, lower insurance rates as an incentive to purchase.
The Pros and Cons
There are various advantages and disadvantages to going through your affinity group to receive an insurance discount. You might receive a larger discount on your home insurance. However, group policies will have non-negotiable liability limits and coverage. This may be less effective at covering all of your individual requirements. You may want to work with your independent insurance agent to purchase a more specialized policy that better suits your personal needs.
Some affinity groups will offer a smaller discount for a wider range of insurance products if you don’t want to purchase into a group plan. For example, AAA and AARP both offer its members a 10 percent discount off non-group insurance policies.
Your home insurance company will likely allow you to add your affinity group discount to other qualifying discounts, like paperless billing, paid-in-full, electronic funds transfer, and concurrent life insurance.
There are other benefits too: if you are in an affinity-discounted group policy, you may qualify for lifetime renewability, a rate that is locked for a certain period of time, or access to a special group policy customer service line. If your employer is the affinity group, then you may be able to have your premium payments taken out of your paycheck automatically.
Be sure to verify what the affinity discount entails. Sometimes, the discount will only apply to members of the organization and will not include coverage for children or spouses.
You also are not guaranteed to qualify for a particular home insurance policy simply because you are a member of an affinity group. The insurance company also takes other factors into account, like your credit score and previous insurance history, before determining if they have a policy that’s right for you.
Ask Your Agent
Speak with your independent insurance agent today to see if you qualify for an affinity group discount on your home insurance. They will have the knowledge and experience to recommend the right home insurance discounts and policies that suit your needs.
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