7 Insurance Tricks That Cost You Money

Is it possible to purchase insurance that counters insurance? Some people may wish they could buy some protection against their insurance if they have been the victims of the unethical actions of some insurance companies. Sadly, we frequently feel as though we are at the whim of the powerful insurance companies, but knowledge offers a chance to level the playing field. Knowing their tricks will enable you to avoid them.

1. You May Not Need Collision Insurance

So you bought an automobile that was an older model. It's at least seven years old, only worth $2,500. Your car's deductible is getting ever-closer as it depreciates. Keep in mind that the insurance provider will only pay you up to the worth of your car; therefore, if the value is equal to or lower than your deductible, you won't receive any compensation. Consider skipping collision insurance if you drive an outdated vehicle. In your case, the bare minimum coverage mandated by law is sufficient. However, don't rely on your insurance agent to notify you.

2. If You Have a Car Loan, You Need Gap Insurance

After getting rid of the old car, you bought a brand-new vehicle with that incomparable new-car smell. You drove home after taking out a $25,000 loan. Your car was totaled two weeks later, and the insurance provider offered to buy it from you for $21,000. You will be responsible for the remaining $4,000 because the bank will still demand payment of the $25,000 you owe.

Without gap insurance, you are responsible for paying it yourself. Gap insurance is something you ought to think about if you have a car loan.

3. Anti-Concurrent Language in Your Policy

You reside in a seaside town, and recently a powerful hurricane struck, causing significant damage to your house, including flooding that cost tens of thousands of dollars to repair. You have storm insurance as part of your homeowner's policy, so everything will be covered, right? Wrong!

Your insurance provider informs you that nothing is covered under your policy due to the anti-concurrent language's exclusion of flood damage, despite the fact that the damage was undoubtedly brought on by the hurricane. They tell you that you should have read your policy, which only adds salt to injury. Does this all seem unclear to you?

Make sure to ask your insurance agent where the anti-concurrent language is located in your policy and request a copy of it.

4. You'll Never Understand It, Anyway

Attempting to read your insurance policy, ever? These laws are written in an excessively difficult fashion, regardless of your degree of education or street smarts, however this issue is quickly being resolved. More than half of the states in the US have introduced or passed legislation requiring insurance firms to write their policies in plain English. If you don't understand a policy, always ask for an explanation. Do you have a recording-capable phone? In order to capture the insurance agent's explanation, turn on the microphone.

5. We Use Your Credit Score to Determine Your Rate

Experiencing issues with paying your bills? Bankruptcy? If your insurance provider is relying on you to pay for your policy, these may not seem like ridiculous things to consider, but consider it from a different perspective: What if you only accept cash and have no credit? What if you're old and no longer make credit-related purchases?

This approach makes the assumption that having credit indicates responsibility, even though some people are so responsible that they don't require any credit at all. Ask the representative providing the rate quote if the rate was determined using your credit score as a criterion.

6. We Get a Bonus If We Hassle You

Farmers Insurance once had an incentive program called "Quest for Gold" that offered adjusters pizza parties and $25 gift cards if they achieved low payment goals, according to a North Dakota Insurance Department report published in 2007. They weren't the only ones; additional individuals encouraged staff to accomplish low pay targets by rewarding adjusters with various presents.

Know how much your automobile is worth, have a clear understanding of how severe your injuries are, and, if required, speak with an attorney before engaging in negotiations with the insurance adjuster. Although not all insurance firms will behave in this manner, they generally won't make you their best and fairest offer without a little bit of haggling on your part because they want to save money just as much as you do.

7. We Consider It a Claim If You Call

You call the insurer to get some information because a neighbor unintentionally threw a baseball through your kitchen window and you can't remember what your deductible is or whether you've ever filed a claim for homeowner's insurance. You advise them of the circumstance and merely want information.

The call may be recorded in the CLUE (Comprehensive Loss Underwriting Exchange) report on your property, which is accessible to anyone with a financial interest in your home, and your insurance company may treat that as a claim and alter premiums appropriately. It could be challenging to obtain home insurance as a result of just one phone conversation.

If you must call with a question concerning your policy, frame it as a general inquiry that you are making to better understand your policy.

 

the conclusion

Although not all insurance firms have your best interests in mind, you must always take precautions because there are honest and dishonest people in any industry.