Hick-ups In Car Insurance Policies

Written By: Ryan Parker on January 27, 2010 One Comment

It is almost everywhere that we hear that having insurance is a good thing. We are even brought up on the fact that having insurance is the smart way of doing things. We are made to believe that with insurance, we are somehow protected in some sort of bubble. Any financial risk from accidents, injuries all the way to repairs etc will be magically taken care-off by the insurance companies. They don’t tell you that buying car insurance itself could be a financial risk. This is especially so if they decline your claim or make it difficult for you to get your car repaired. Car insurance policies aren’t the godsend that many people think they are.

Here we will look at car insurance policies and why you will be severely short-changed if you aren’t careful with it. We will explore the importance of fully understanding what the car insurer provides in their policies. We will also look at some underhanded ways that insurers might try to relieve you of more money than you should be paying for your insurance policy. It is important to note that all insurance companies are very careful with their wording of their policies. This is to cover themselves in terms of excessive pay-outs and also fraudsters that might want to steal their money. The insurers will normally set-up little escape clauses in their policies which if you aren’t careful can mean that these insurers can weasel their way out of their obligations. We’ll have a look at some common ways the insurers might get themselves off the hook and also ways they use to get you to pay more than necessary below.

The first and often most profoundly heartbreaking one is when the insurance company flat out denies your claim and says that you can’t do anything about it. In most cases like this, the insuree is taken aback and doesn’t know how to proceed further. It is important to note that car insurance companies have a legal obligation to fairly and promptly settle your claim. If they do anything else that you think might be contravening this, they are at fault and vulnerable to being sued. Depending on which country and state that you are in there are many different ways you can approach this. For most the first thing to do is to first write back to tell them that they have made a mistake, state their obligations and ask them to reconsider their response. If that fails, then you can appeal to your state or country car insurance commissioner for further help with you case. If the claim is big then you can also contact a attorney that specializes in insurance law and discuss your case of bad faith about your insurance company. The last and most extreme course of action is to sue your insurance company. Note that this may cost quite a lot and may not be the most suitable option for most to follow.

Customers should also be very careful with how car insurance companies sneak charges into the policies of current customers to try increase their profit margins. Most car insurance companies work on the assumption that some people actually expect car insurance policy premiums to increase over time. This is especially the case when you might have made a small claim the previous year or if you have made your premium payments late for whatever reason. Sometimes insurers will even sneakily add extra coverage items into your policy hoping that you might not notice. This is even the case for coverage items that you have decided to omit the previous year. You might find that they have mysteriously reappeared in the new policy. If you don’t catch this at the time of renewal and actually pay the insurance companies, you might find it very hard to get back the money even if you request for it.

Very few customers will know that most car insurance companies will spend 75% of their resources in getting new customers and only 25% of their resources maintaining their current customers. It has somehow been hardwired in their brains that it is better to steal customers from their competitors than to build long lasting relationships with their current customers. This being the case they will often give new customers very good incentives to move your car insurance policy over to them however would not offer the same courtesy to their current customers. Policy holders should keep up with the latest promotions that their car insurance companies might be running. Call the insurer if you are eligible and insist that the same offer be extended to you or your will move your business elsewhere.

Another sneaky thing that insurers do to your car insurance policy is to mess around with your deductibles so that they can get more premium out of you. If you set your deductibles low, the price of your premium will go up. If your deductibles are high then your premium is low. It is always to the benefit of the insurer to keep your deductibles as low as possible so they can earn extra money from you. There are two times that they can hit you with this. The first is when you sign-up and aren’t particular about your deductibles. The second is when your car insurance policy is up for renewal and the insurance company sneakily reduces your deductibles back to “default”.

More often than not, the root cause of misunderstandings and general problems when it comes to the claims process is often the policy that is not thoroughly understood by the insuree. The car insurance policy is a contract between you and the insurer, everything about your arrangements are put into wording in the policy documentation. It is for this reason that it is very important to fully understand your policy before paying a cent. This is even true when the time for renewals, some small things may change that might lead to substantial differences in claim ability.

Let Ryan Parker bring you through the maze that is the auto insurance policy. There are a few things that very few people know and will often be a deal breaker especially when it comes to the time to claim. He looks at the important points and why you need to be careful with which type of car insurance you get.