Subscription Insurance: Are Services Like Care by Volvo Worth it?

I remember New Year’s Eve of 1999. I was 7 years old and I was sitting in a bean bag chair on my living room floor with my family, considering if the world would really end at midnight like the people on the news had speculated. 

The turn of the new millennium was a memorable moment for many, so it’s hard to believe that 22 years have already passed, but at the same time, so much has changed in that time. And while changes in the insurance industry maybe haven’t been as drastic as those in say … the technology or medical fields, there are definitely some differences between insurance in 2000 and insurance 22 years later.

And we expect to continue to see innovation at a rapid rate in the industry.

One example for instance, is subscription insurance – insurance bundled into service packages offered by companies who don’t traditionally offer insurance.

At Berry Insurance, we recently learned about a subscription insurance program, Care by Volvo, when one of our clients asked about it. While this was the first we had heard of it, we expect that other vehicle companies may follow suit offering auto insurance through a subscription service.

So we decided to look into it. In this article, we will tell you what we learned so you can decide if this type of program would be right for you.

What is Care by Volvo?

According to their website, Care by Volvo is a Volvo subscription service offering maintenance, protection for tires, wheels, excessive wear, and roadside assistance. But here’s the thing – it also includes car insurance coverage.

On their website they say “We partner with Liberty Mutual Insurance to obtain comprehensive coverage for our vehicles. Coverages and limits are provided at or in excess of state requirements. Coverages and limits are pre-selected and cannot be modified.”

Sounds great, right?

Well, maybe. But when it comes to these types of offers, there are things you may need to look out for, or else you may be facing consequential gaps in coverage.

When Care by Volvo may not work for you:

If the limits aren’t enough:

As we mentioned above, Care by Volvo says they offer comprehensive coverage outside the state’s minimum requirements.

But in our experience, some insurance carriers boast offering coverages beyond state requirements, but that doesn’t mean it’s necessarily enough coverage for your needs.

In MA, a few coverages (such as Bodily Injury to Others and Personal Injury Protection) have set limits. But for other coverages (Bodily Injury Caused by an Uninsured Auto and Damage to Someone Else’s Property) the limits can be increased above the state minimums. Other coverages (Optional Bodily Injury to Others, Medical Payments, Collision, Limited Collision, Comprehensive, Substitute Transportation, Towing & Labor, and Bodily Injury Caused by an Underinsured Auto) are often optional for MA drivers, and limits can be selected. 

When we quote insurance for prospects, we always make sure to quote high enough limits to provide adequate protection for each individual situation. And most times, this means quoting the highest possible limits.

With the rising costs of vehicles and medical bills, the state minimums just aren’t enough to protect anybody. Many times, even the maximum limits don’t provide enough protection for worst-case-scenario auto accidents, which is why we often recommend an umbrella insurance policy in addition to auto insurance.

So if the limits provided through Care by Volvo or similar subscription services aren’t high enough, the program probably isn’t right for you and you should maintain coverage through a reputable agency who is dedicated to thoroughly protecting you.

To learn more about auto insurance limits, read this article: How Much Car Insurance Do I Need? (And Why the State Minimum Isn’t Enough).

If you have an umbrella insurance policy:

If you have a personal liability umbrella insurance policy and you intend to keep it, Care by Volvo is not for you for a couple of reasons.

For one, in order to have an umbrella policy, you need to have the maximum liability limits on both your home and auto insurance policies. 

And as we already learned, the Volvo Care limits are pre-selected and cannot be modified, so if they do not meet the criteria for your umbrella insurance policy, you will lose your umbrella insurance.

But even if Volvo did offer the maximum limits required for umbrella insurance, there is another reason you couldn’t maintain your policy.

Because the auto insurance is offered to you through Volvo first, it is actually considered a commercial policy by Liberty Mutual, meaning you wouldn’t be eligible for a personal umbrella policy.

If you’re losing a multi-policy discount:

As you are probably aware, bundling insurance policies with the same insurance carrier is one of the most effective ways to save money on your insurance. 

Many insurance companies offer incentives for the more business you provide them. By bundling your car insurance with other policies (such as homeowners/rental) within the same insurance company, you may be able to save approximately 5-25 % on your policies.

So if you move your insurance from your current provider to the Volvo insurance or a similar subscription package, you will be losing your multi-policy discount and may be missing out on a good amount of savings.

If you think you may want to cancel:

Unfortunately, if you aren’t sure if you want to commit to Care by Volvo and just want to test it out, you are not able to do that.

According to the Care by Volvo website, “You can cancel your subscription any time after 5 months have expired in the lease term without incurring any early termination charge.”

Are there other options?

So what if the Care by Volvo limits aren’t high enough for you, or you aren’t willing to lose your multi-policy discount? Can you still take advantage of the Care by Volvo benefits while maintaining your previous insurance?

On the Care by Volvo website they say “ If the insurance coverage or limits provided as part of the Care by Volvo program doesn't meet your needs, Volvo offers standard purchase and lease options along with your choice of purchasing your own personal insurance policy.”

So basically, if the insurance provided by Volvo (Liberty Mutual) doesn’t fit your needs, unfortunately your only option is to opt out of the program altogether and get the car through standard purchase or lease options while getting your own insurance elsewhere.

Protect your new vehicle with a comprehensive insurance policy:

Depending on what your insurance priorities are, Volvo insurance or similar subscription services may work just fine for you.

But if you care about being adequately protected, don’t want to risk out-of-pocket claims, have an umbrella insurance policy, or will lose money from your bundling discount, it is probably best to stick with a traditional insurance agency or carrier – at least as long as these subscription services are only offering sub-par limits.

If you want a thorough auto insurance policy paired with a guide who can help you make sure you are making all the right insurance choices, we recommend that you get your insurance through a reputable independent insurance agency.

And if you’re located in Massachusetts like us, here are some more specific suggestions: Top 10 Insurance Agencies in Massachusetts.