The following post is directed at those who are current, past, or potential policyholders in BAA, the division of the aid plans that provides automobile coverage.

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Many of you who are reading this are good Mennonites, so you know that saving money and being efficient are important. I think we at the office can relate to the pain of having to write another cheque, especially if you don’t get a shiny new product to compensate you for the loss. One concern that we hear is that the upfront cost of BAA is significantly higher than insurance. This is especially true for mature drivers with more expensive vehicles. Allow us to explain why this is the case.

One reason that people take issue with BAA’s pricing, is that they fail to differentiate between BAA and regular insurance. There are key differences that look insignificant to the casual observer. Insurance is something that a consumer purchases to protect his/her investment from loss. Once the premium is paid, that money no longer belongs to the consumer but has only purchased a few limited rights for a set period of time.

Our aid plan on the other hand is a pooled fund in which the shareholders have an invested interest. Every member in the Church of God in Christ, Mennonite is an equal partner in this fund, even though they do not hold a direct title to it.

Insurance corporations are run by financial investor groups who have an interest in raising money for their shareholders. They need to be profitable. Hence, they do their best to manage their risk. They have to offer enough benefit to their customers to build confidence, but due to the nature of their business they are reluctant to offer their services to high-risk ventures unless they see a corresponding opportunity for financial gain.

Over time, auto insurance has evolved. In the past customers were treated quite equitably with only mild penalties and rewards for driving records. Currently, some insurance companies push severe penalties that younger, higher risk drivers are barely able to afford. Doing this enables insurance companies to offer coverage at apparently quite reasonable rates for good mature drivers.

BAA as an aid plan operates quite differently. We do have some price adjustments for age and vehicle type, but we do not implement any individual risk assessments. We are reluctant to begin doing this as it would add complexity to our system. Furthermore, it would likely stir up controversy; how are we to judge fairly who is worthy of bonuses and who should be penalized and how much?

Many of us, as men especially have been in the situation where we were the higher risk driver but have eventually matured. (Hopefully at least.) Now that insurance is cheaper for us than participating in this program, it is tempting to choose the cheaper option. We would suggest that those in this position have a responsibility to help carry the burden and risk with our youth. Every time one of us drops out of BAA, we are shifting this cost to those who are learning and are less able to carry it.

In the office we feel like BAA is a great introduction to our aid plans for our young people. However, this program depends on continued participation from those of you who could get cheaper coverage elsewhere. We ask that you consider more than just the immediate cost when choosing where you will purchase coverage.

In conclusion, we would like to reiterate that the money collected by BAA and MUA belongs to you as the Brotherhood. You may have relinquished control of it to a committee of brethren, but if there are ways to make this program more fair or equitable, we welcome your input. In contrast, if you choose to spend this money on insurance, it is gone and will likely never return.