Car insurance companies will never explain the full scope of what your insurance policy is about and that is why it is important to know the things car insurance companies will not tell you.
Aside from making money from premiums that claims are not paid for, insurance companies feed off the ignorance of policyholders and many are not aware. They are keen on exempting some important information from their customers so they can enjoy more profit.
The holding back of information makes it impossible for policyholders to get the full scope of their policies and the benefits they are entitled to. In a recent post, I wrote about what car insurance does not cover because most individuals do not bother to read the provisions of their policies and their insurance providers overlook the place of properly informing their clients about the exclusions and inclusions of their policies.
Looking at how insurance companies shield information from their customers and how policyholders are greatly affected by this move, I have explained in detail six (6) things car insurance companies will not tell you. The goal of this post is to intimate you with vital and important things your car insurance provider will not tell you as you seek to insure your vehicle.
Staying abreast with the information I will share in a moment will help you make the best out of your car insurance policy. Are you ready to know what your car insurer is hiding from you? Then journey along with me.
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1. Your Credit Score Poses an Important Impact on your Policy
In buying an insurance policy, be rest assured that your credit score impacts the amount you will have to pay. Car insurance companies will shield this information from you and only a few will tell you that a bad credit score will impact the cost of your car insurance.
Some insurance companies will not consider you for their car insurance policy if your credit score is poor. A couple of car insurance companies in the United States and the United Kingdom will disapprove of your application when you have a bad credit score.
While some insurers may plainly tell you that your credit score would impact your policy others will simply disapprove of your application or charge you higher premiums.
2. Deductibles Must Be Choose Wisely
Choosing the right amount of deductibles could be the most important factor in getting an affordable and cheap car insurance policy. With the wrong choice of deductibles, you could be paying through your nose to maintain your insurance policy.
With higher deductibles, a policyholder can save money right out of the gate. This also discourages the use of insurance for smaller losses that could affect the loss-free discounts used by most auto insurance companies.
It is important to note that higher deductibles have a break-even point of about five (5) years. An average client has a comprehensive or collision claim only every eleven (11) years and the choice of your policy deductibles will greatly impact your policy.
As a recommendation, consult an insurance agent or broker to help you choose the right amount of deductibles.
3. Insurance is not Worth it For Older Vehicles
This is one very profitable aspect for insurance providers. Insurance companies have a way around making a profit when you try to insure a car that has lost value.
The sad part about this is that the loss of value as attributed to the car is not necessarily the market value for the car. Insurance companies have a pre-defined table that tries to diminish the value of a given vehicle as it gets older.
Surprisingly, whether your car is new or old, the cost of repairing it and maintaining it is almost the same. This means there should be no disparity in the payment of claims regardless of the age of a car but this is not so with auto insurers.
For instance, if your car depreciates in value by 40 percent in a particular year, your insurer would be willing to only pay for 60 percent of the total cost of repairs. Most of these things are not related to policyholders and when it is time to file claims they receive the shock of their lives.
The bitter truth is that as your car gets older, insurance for it is not worth it. It will only give insurance companies leverage to exploit you in the name of providing auto insurance.
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4. High Valuation of a Vehicle to Increase the Premiums Payable
This is another subtle area that car insurers profit from at the expense of the ignorance of policyholders. A rule in the car insurance industry is that the higher the value of a vehicle, the higher the premiums that would be charged.
In keeping step with this rule and ensuring profit-making, insurance companies give high valuations for cars which typically increases the number of premiums you will pay them. How do they profit from this action?
They profit from this action because when it is time to pay claims, the value of your car is not considered except your car is stolen or is declared a ‘total loss’. Outside this, you would be paying unnecessary premiums for a car that is not worth that amount because your insurer proposed a high valuation for the car.
It would be in your best interest to seek low valuations for your car when buying insurance. There is no point in feeling good about high valuations for your car. Become financially savvy, drop your ego aside, and save some of the bucks you would have spent on unnecessary insurance cover.
5. Claims are Delayed to the Advantage of Insurance Companies
One of the selling points of insurance companies around the world is their quick response in attending to and resolving claims. A fast claims process will make a company preferred above others. In this regard, it is quintessential to note that some companies intentionally delay the claims process.
Sadly, when the claims process is delayed it would be to their own advantage. Chances are that you could get tired of calling and submitting documents or so and decide to let go of the claim. It is possible for the claim to be delayed until the company holds on to something they can use as a ground to disallow your claims application.
According to reviews by many unhappy customers, this is one of the secrets of Southern General Insurance. They delay the claims process and use it to their advantage.
6. Insuring your Car is NOT Mandatory by Law
I have saved this one for last cause I know it would be difficult to believe but then it is true. Car insurance being mandatory by law is one of the biggest lies of the insurance industry and it is used as a strategy to get more members of the public to buy auto insurance.
Nobody cares if your car is insured or not. It is your personal property and it is nobody’s business whether you decide to insure it or not.
Although, there is a side to this fact we must be careful about. In some states in the US, car insurance is required by law. Proof of your car insurance policy will be demanded when your vehicle is pulled over by cops or vehicle inspection officers.
For car insurance companies, whether you are living in areas where car insurance is mandatory or not, they would still present you with this clause, so you purchase car insurance.
Insuring your car is beneficial, let’s not forget that, but then buying an insurance policy should be because you have understood the benefits of one and not because you are compelled to get one.
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Industry lies are everywhere. The insurance industry is not exempted from the bandwagoning of industries that lie to customers in a bid to command their patronage. I am optimistic you are now aware of some of the things car insurance companies will not tell you.
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