Hick-ups In Car Insurance Policies PDF Print E-mail
Written by Ryan Parker   
Sunday, 17 January 2010 12:03
For most of us, we know the importance of car insurance. We are told this by our parents, the TV, magazines that we read and just about anyone that doesn't like the idea of financial risk when it comes to their automobiles. We would happily go out and buy their car insurance, most of the time a comprehensive plan and think that we are covered by a non-existent bubble of security. This false impression however falls to pieces when something untoward happens and you turn to your car insurance for the protection that they are supposed to offer.
by RyanParker


For most of us, we know the importance of car insurance. We are told this by our parents, the TV, magazines that we read and just about anyone that doesn't like the idea of financial risk when it comes to their automobiles. We would happily go out and buy their car insurance, most of the time a comprehensive plan and think that we are covered by a non-existent bubble of security. This false impression however falls to pieces when something untoward happens and you turn to your car insurance for the protection that they are supposed to offer.

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 most "in-your-face" way for car insurance companies to screw you over when you are submit a claim is to flat out deny the claim. In most of these cases, the insuree will be completely taken by surprise and won't know how else to proceed. Some are even so dumbfounded by that response that they just forget the claim altogether thinking that they have done something wrong to solicit that response from the insurer. In almost all countries the insurance companies are governed by an insurance regulator that will always obligate the insurer to settle your policy claim fairly and promptly. The regulations almost always side the insuree against any heavy handedness by large insurance companies. If you feel that anything that your car insurance company is doing is not fair then they are certainly setting up themselves to being sued. The best way to respond to this is to write back and simply say that they have made a mistake, state their obligations and ask them to reconsider their previous response. If that doesn't change their mindset, you can appeal to the state or country insurance governance agency or commissioner to help you with your case. If the claim is large enough then you might even consider bringing up the subject to a insurance lawyer to discuss what bad faith you have received from the insurance company.

In addition to trying to get out of paying you your rightful claim there are also some dodgy things that car insurance companies do to get you to pay more than you need for your policy. Some people mistakenly think that car insurance policy premiums should rise every year. Car insurance companies are more than happy to jump on those people with a vengeance. This is especially so if you have had a claim the previous year where the insurance companies have a very valid reason to up your premium. Sometimes cunning insurance companies may even increase your coverage for the next year without you knowing about it. This might even be the case where you have decided to clean up your policy and delete some coverage items. You might find that those items that you deleted will magically reappear in the policy for the following year.

On an industry report published some time ago, stats showed that the majority of car insurance company's resources go towards poaching customers from other car insurance companies. This is in place of actually taking care of their current customers. It stated that as much as 75% of their resources were diverted to obtaining new customers while only 25% was allocated to servicing their current customers. By this measure we can see that car insurance companies won't really give must care to you as a current customer. They would rather spend money to attract new customers. With this knowledge it is very important to know what deals your current insurer has to entice new customers. It is the normal practice of these insurers to not automatically extend the same deals to their current customers. If you are aware of any deals then it becomes your responsibility to push your current insurer to offer the same deals to you or you might consider moving to another insurer.

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".

The main cause of dissatisfaction with your car insurance is to do with a misunderstanding or simply not paying enough attention to your car insurance policy either at the beginning or when your policy was being renewed. A policy is basically a contract that binds both you and the insurer into an agreement. Everything that the insurer is liable to do for you is in the policy documentations. It is for this reason that it is vitally important that you actually take the time to read and understand the car insurance policy. Do it so you won't get any surprises when you make a claim in the future.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

An honest look at car insurance policies and why they might not be as good as they seem. We look at the common let-downs that car insurance companies specialize in and how you can avoid them.