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 reputation. You can spot them easily and even use it to your advantage if you have a little car insurance insider knowledge. It would help if you know how they think, operate and what information they use.
They dedicate large resources and 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 profits. The defense against these attempts is to be on the lookout for all the discounts you can get and ways to find cheap auto insurance. Ten of those things They rather keep wrapped up are discussed below so that you can be better prepared.
- Upselling and Loading Up Policies
When you are talking to them 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 quickly. 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 include every imaginable peril. However, they are not cheap and you may not be able to afford them. They will be quick to tell you that cheaper ones don’t cover as much as theirs do. Although this may be true, you should consider if you really need a super-loaded package and can afford it. Scaring motorists against cheaper policies is one of the oldest auto insurance tricks in the book. You can get a pretty decent one at fairly affordable rates and it does the job.
- Policy Auto Renewal Arrangements
They make it look like all they consider is the continuation of coverage. However, 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 a notice that says “If you are happy with the renewal terms you don’t need to do anything. We will collect the premium and the 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 one. You cannot take it on face value and do nothing. This will cost you money. You should always ask why when automobile insurance companies are being extra helpful. It is not being skeptical but saying it as it is.
- Insurance Company Agents (Not Yours)
Think how many times you referred to them as “your agent”? You have to be smart enough to make this distinction. If an agent is tied, they work exclusively for that company. They cannot be tied to them and still working for you. Yet, they make you believe that they are.
The solution is to pick an independent broker to work for you, instead of a tied agent. Only they can search the whole of the market for you and offer advice on the best option. On the other hand, a tied agent can only work for and sell one carrier’s 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 their favor.
- Recovery Services Offered by Insurers
They love to corner and sell to policyholders as much as they can get away with. Majority of them are not equipped to provide Roadside Breakdown Services the way AAA can. Nonetheless, they keep calling it recovery that suggests they offer similar levels of service.
They don’t have fully equipped vans and highly trained mechanics to come and get it started again. They don’t even have enough vans 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 keys inside the vehicle or send a towing truck to pick the stranded automobile.
The worst part of it is that they can see all those roadside assistance calls you made and use it to determine a renewal quote. Furthermore, it is recorded as if you had an accident in the Accident Data Center when a vehicle insurer sends you a towing truck. On the contrary, nobody else knows when you call an independent recovery service provider as towing by them is not recorded. In addition, you believe you have a good contract. That leads to failure to buy an independent breakdown plan that can actually help should you be stranded on the side of a road.
- Monthly Installments
Many a time, an agent will be quick to suggest that you can pay by installments. You may think “how nice of them to allow you to spread the costs”. Think again, as it is not free to spread the premium. You will normally be charged 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 amount but see a small monthly installment. You would see if you look at it closely that the overall amount is now higher and they would probably write those charges somewhere but they pretty well know that it will be overlooked. It is simply another revenue source for them. However, they want you to think that it is one of those solutions offered out of kindness of their heart.
Where possible, make the premium payment in one go and save a lot of money on arrangement fees. Also, keep in mind that most of them give about 5% discount to get the money fast. You may find that paying by credit card can work out cheaper. So, look at figures carefully before jumping on an easy solution to 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 settlement. 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 one in. Luckily, not all of them are the same.
This shows clearly that you and them have different objectives. They are businesses with the aim of making profit. They will try to avoid paying 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 it, find out the extent of injuries and your rights. Don’t hesitate to talk to a lawyer if you need one. You should expect that you will not be offered a fair settlement unless you put up a fight. Once you have done your homework it is easier to appreciate a great settlement and accept it with gratitude.
- Calls Made to Your Auto Insurer
They will keep telling you that you should report “everything” to them. Should you really if they will use it to charge you more? Lately, they are pretty quick to open a claim file for you the moment you start talking about an incident. And it will be taken into account when they calculate the renewal premium. It doesn’t matter that you decided not to go ahead with it and they never paid a penny. Furthermore, it will go into CLUE (Comprehensive Loss Underwriting Exchange) report for all of them to see. This is what vehicle insurance companies don’t tell you but do.
Most of them and agents will allow you to ask questions on hypothetical bases. By all means call them up and run the case to find out more. But don’t give them any identifiable detail. If they insist on it, tell them you will call back. Alternatively, you can call the broker up and ask anything without the worry of it being recorded at all.
You are an adult and can decide when you should inform them 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 the cell phone to call them immediately. However, if you have a small scratch from a recent camping trip you can contemplate on making a claim, paying for it out of pocket or leaving it alone.
- Low Deductibles
It is shocking how many motorists would prefer a policy with lower deductibles. They carry out researches 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 automobile 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 deductibles work? Read the post to figure out if you need them high or low.
- Clever Policy Wordings
The problem is that they have written the documents and know exactly how to twist the wording the way that suits them. Many states have come up with legislation that requires them to produce wordings in plain English. Remember that the agent has to explain every little detail you don’t understand. Take time to ask questions and get them clarify everything. You should stay away from the ones with confusing documents and wordings and search for the ones that are open and clear. Not having any clue about what is in them can open up all sorts of issues in the future.
The good news is that a few of them 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 they try to be clever with you that may be the time to seek legal advice.
10. Credit Score and Public Information
Today, almost all of them check credit score and penalize you if it is not great. You can find out about providers that don’t check credit. Turn the table on them by looking after the score before they look at it. Instead of being penalized for bad credit you get discounts for a great one. Also, remember that automobile 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 social profiles, Facebook pictures and Tweets if they suspect any funny business. 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 vehicle 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 don’t consider these things in detail.
Not every automobile 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 calculations but the carriers made allowances for those as well. There are some great ones 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.