You can up your game if you know what car insurance companies don’t want you to know. Tactics and tricks used by vehicle insurers aren’t groundbreaking or top secret in anyway. Also, they aren’t deceiving or misleading but just the things they developed over the years to improve policyholder retention, profits and protect company reputation. You can spot them easily and even use them to your advantage if you have a little vehicle insurance insider knowledge.
Insurance carriers with large resources work hard to sell and charge you more. Sometimes, they come up with really smart solutions that trick many policyholders to spend extra or sign up to something. You really cannot blame them for trying hard as it is their duty to try and increase their profits. Your defense against these attempts is to educate yourself and be on the lookout for all the discounts you can get and ways to find cheap auto insurance. Ten of those things insurance companies don’t want you to know are discussed below so that you can be better prepared.
- Upselling and Loading Up Policies
When you are talking to your insurer you would notice that they are keen to talk to you about additional coverage options. Unless they are offering something absolutely free you should know that every addition will cost you money. Therefore, you should know exactly what you want and stand firm. There is no harm in listening to them but you should not jump on every offer. They usually either offer the additional services at a discounted price or make it sound like you are getting a good deal somehow.
There are great policies out there that appear to cover every imaginable risk. However, they are not cheap and you may not be able to afford them. They will be quick to tell you that cheaper policies don’t cover as much as their policies do. Although this may be true, you need to ask yourself if you really need a super-loaded policy and can afford the premium. Scaring motorists against cheaper policies is one of the oldest auto insurance tricks in the book. You can get a pretty decent policy at fairly affordable rates and this is one of the things car insurers don’t want you to find out.
- Policy Auto Renewal Arrangements
They make it look like all they consider is the continuation of your coverage. However, car insurance auto renewal is a great trick for them to make sure that they can keep collecting the premiums for years to come without the need to ask you. They generally insert a notice in bold within your renewal notice that says “If you are happy with your renewal terms you don’t need to do anything. We will collect the premium at renewal date and your coverage will carry on”. Great isn’t it?
Except this makes you lazy and feel like you are being taken care of. What you should be doing is to check for alternative quotes in time and decide if it is a good idea to switch or stick with the current policy. You cannot take their words for it and do nothing. This will cost you money. You should always ask why when auto insurance companies are being extra helpful.
- Insurance Company Agents (Not Yours)
Think how many times you referred to an insurance company agent as “your agent”? You have to be smart enough to make this distinction. If an agent is tied to a particular insurer, they work exclusively for that company. They cannot be tied to one company and still working for you. Yet, they make you believe that they are your agents.
The solution is to pick an independent auto insurance agent to work for you, instead of a tied agent. Only they can search the whole of the market on your behalf and offer advice on the best option. On the other hand, a tied agent can only work for one carrier and sell their product. So, they are totally biased towards one provider and therefore, they cannot be looking after your best interest. It is not hard to figure out that one of those fine balances somehow tipped in favor of insurers.
- Recovery Services Offered by Insurers
They love to corner and sell their policyholders as much as they can get away with. Majority of insurers are not equipped to provide Roadside Recovery Services to their policyholders the way companies like AAA can offer. Nonetheless, they keep calling their services as recovery services that suggest they offer similar levels of service.
They don’t have fully equipped vans and highly trained mechanics to come and get your car started again. They don’t even have enough coverage to get to you in time. They may be able to bring you petrol if you run out, send you a locksmith if you left your keys inside the vehicle or send a towing truck to pick the stranded automobile.
The worst part of what vehicle insurance companies don’t want you to know is that they can see all those recovery calls you made and use it to determine your insurance renewal quote. Furthermore, it is recorded as if you had an accident in the Accident Data Center when an insurance company send you a towing truck. On the contrary, nobody else knows when you call your independent recovery service provider as towing by recovery services is not recorded. In addition, you believe you have a recovery service contract. That leads to failure to buy an independent recovery plan that can actually help should you be stranded on the side of a road.
- Monthly Installments
Many a time, your agent will be quick to suggest that you can pay by installments. You may think “what a lovely company which allows you to spread the costs”. Think again, as it is not free to spread the premium. You will normally be charged over the top arrangement fees or interest for this facility. Also, showing quotes on monthly bases is a great sales trick as the customer is not scared with large lump sum premium but see a small monthly installment. This is one of those things car insurance companies don’t want you to know they are making money from. They want you to think that it is one of those solutions offered out of kindness of their heart.
Where possible, make your premium payment in one go and save a lot of money on arrangement fees and thanks to additional discounts offered. You may find that paying by credit card can work out cheaper. So, look at your figures carefully before jumping on an easy solution to your cash flow issues.
- Low Ball Claim Settlement Offers
A report released in 2007 by North Dakota Insurance Department revealed that one company used incentives to achieve low claim settlements. They offered claims adjusters pizza parties and gift cards when they manage to get a low payment for the company. Other similar rewards and pressures to employees to meet lower claim payment goals are known in the industry too. This is definitely what car insurers don’t want you to know but they couldn’t prevent it to come out. You should be aware of these tactics, especially when you have a claim. Luckily, not all insurers are the same.
This shows clearly that you and your insurer have different objectives. They are businesses with the aim of making profit. They will try to avoid paying claims or try to cut the costs down by achieving lower settlements. Therefore, you should watch out for low ball offers.
Before even they offer any settlement you should check the open market value of your automobile, find out the extent of your injuries and your rights. Don’t hesitate to talk to a lawyer if you need one. You should accept and expect that you will not be offered a fair settlement unless you put up a fight. Once you do your homework it is easier to appreciate a great settlement and accept with gratitude.
- Calls Made to Your Insurer
They will keep telling you that you should report “everything” to your insurer. Should you really if they will use it to charge you more? Lately, companies are pretty quick to open a claim file for you the moment you start talking about an incident. And that claim will be taken into account when they calculate the renewal premium. It doesn’t matter that you decided not to make a claim and they never paid a penny. Furthermore, it will go into CLUE (Comprehensive Loss Underwriting Exchange) report for every other company to see. This is what vehicle insurance companies don’t tell you but do.
Most companies and their agents will allow you to ask questions to them on hypothetical bases. By all means call them up and run your case to find out your options. But don’t give them, your particulars of policy details. If they insist on it, tell them you will call back. Alternatively, you can call your broker up and ask anything without the worry of it being recorded as a claim.
You are an adult and can decide when you should inform your insurer immediately and when you could think about it. If you had an accident with another car or hit a motorcycle and there are injuries and damages, you should use your cell phone to call the insurer immediately. However, if you have a small scratch on your car from a recent camping trip you can contemplate on making a claim, paying for it out of your pocket or leaving it alone.
- Low Deductibles
It is shocking how many motorists would prefer a policy with lower deductibles. Insurers do their research to find these weaknesses and work on them. Again, nothing is free in most cases and you will be charged higher premiums for having lower deductibles. Look at the figures carefully. Picking the policy that has lower deductibles will surely be a smart choice “if” you have two quotes for the same price and coverage. This may not be seen as one of those what auto insurance companies keep quite about cases but rather something they don’t need to tell you. However, it is easy to figure out. Do you know how do car insurance deductibles work? Read the post to figure out if you need high or low deductibles.
- Clever Policy Wordings
The problem is that they have written the policy documents and know exactly how to twist the wording the way that suits them. Again, this is what car insurance carriers don’t tell you. Many states have come up with legislation that require insurers to produce policy wordings in plain English. Remember that your agent has to explain every little detail you don’t understand. Take your time to ask your questions and get them clarify everything. You should stay away from companies with confusing policy documents and wordings and search for the ones that are open and clear. Never reading your policy document opens up all sorts of problems in the future.
The good news is that a few companies have actually shot themselves in the foot while they are trying to be clever. They refused some claims using the double meanings in the wordings only to find out the policyholders decided to sue them for much larger sums and win. The moment your insurer tries to be clever with you that may be the time to seek legal advice.
10. Credit Score and Public Information
Today, almost every insurer checks your credit score and penalizes you if it is not great. You can find out about auto insurance providers that don’t check credit. Turn the table on them by looking after your credit score before they look at it. Instead of being penalized for bad credit score you get discounts for a great one. Also, remember that auto insurers can check about policyholders in many ways than you can think of. So, the solution is never to hide the problems like traffic violation tickets and lapsed coverage but make sure that they don’t happen. They can check about accidents too as discussed above. It is best to disclose them so that you can get accurate car insurance quotes.
Also, they are reportedly going through your social profiles, Facebook pictures and Tweets if they suspect any funny business in claims. Make sure you don’t unknowingly cause a problem for yourself by posting a picture. For example, you may have posted a picture skiing in the mountains while you are claiming for injuries. If they find out about it they will question you. It may be a picture that was taken a while ago but why raise suspicion?
Now you know what car insurance carriers and agents know. Remember that you are up against businesses with varying degree of honesty, integrity, fairness and customer satisfaction targets. Also, you should keep in mind that you always have choices. You are allowing less than satisfactory business practices to go on when you fail to look into your policy and automobile insurer in detail.
Not every insurer is out there to get you. For example, a few people report to get claim checks that are more than they bargained for. A few things they have not included in their calculations but their insurer made allowances for those as well. There are some great automobile insurers out there and it is your job to find them. And you can do it if you know the things kept secret by car insurance providers.