Unfortunately most of us feel like we’re at the mercy of our insurance company.
However, there is a way to level the playing field the best you can. The secret is education, if you know their tricks, you will know how to avoid them and protect yourself and your interests.
You might not need to carry collision insurance as your car depreciates, it gets closer and closer to the cost of your deductible. For example, if you have a car that is seven or more years old and only worth $2,500, remember that the insurance company won’t pay you any more than the Blue Book value of your car.
If the value is the same or less than your deductible, you won’t receive any money from the insurance company anyway, why bother paying extra every month for collision coverage you won’t ever be able to use?
In this case, the minimum policy required by law is more than enough. However, don’t count on your insurance agent to tell you about this, they’re main focus is signing you for a much insurance as they can. More insurance means more money for them.
You need Gap Insurance in our next example, you trade in your clunker for a brand new car. Along with that new car smell, you also get a $25,000 loan. Two weeks later your new car is totaled and the insurance company offers you a check for $21,000 for the car.
Wait a minute, your car is only 2 weeks old, she hasn’t even had her first oil change.
Welcome to depreciation, however, the bank will still want every last penny of the $25,000 they loaned you, so you are on the hook for $4,000. If you have Gap Insurance you won’t have to pay the difference of $4,000, so it is well worth looking into.
Anti-Concurrent Language in Your Policy It has always been your dream to live by the water, now you live in a beautiful coastal town and recently a major hurricane strikes, causing major damage to your home, including tens of thousands of dollars in flood damage. But you don’t have to worry because you have hurricane insurance as a part of your homeowner’s policy, right?
Your insurance company tells you that because of the anti-concurrent language in your policy, nothing is covered because flood damage isn’t covered even though the damage was caused by a hurricane.
Make sure you ask your insurance agent about the anti-concurrent language in your policy and ask them to show it to you in the policy.
Using Your Credit Score to Determine Your Rate If you have had some problems paying your bills or had a bankruptcy, then your insurance company checking your credit score before signing you may not seem like an unreasonable practice since they want to make sure you will make your payments.
However, look at it a different way. What if you believe in only paying cash for everything and don’t have credit cards because you don’t want the interest payments or the debt. This practice assumes that having credit, and being in debt, makes you a responsible person.
When receiving a rate quote, ask your agent if they used your credit score as a determination of your rate.
In the Case of a Claim do Your Research Many insurance companies offer their adjusters rewards for meeting low payment goals.
Many even pressure employees to meet these goals. This all means that the insurance companies don’t always have your best interest in mind when they are settling a claim with you.
Before you sit down with an insurance adjuster, know how much your car is worth, have a clear idea of the extent of your injuries and speak to an attorney if necessary. While this isn’t to imply that insurance companies are going to resort to underhanded means to save a buck, they want to save money as much as you want to make it, so they will
most likely not give you their best offer without a little negotiation.
They Consider it a Claim Even if You Call for Information
Say the neighborhood kids are playing ball and it winds up going through your kitchen window. You call your insurance company to just get some information about your deductible because you’ve never made a claim before.
However, your insurance company may consider this simple call a claim and adjust your rates accordingly and that information may go to CLUE (Comprehensive Loss Underwriting Exchange). This report, on your house, is available to anyone with a financial interest in your home.
If you have a question about your policy and have to call your insurance company, it is a good idea to make your questions as general as possible to be able to understand your policy, but not give out too much information if it isn’t necessary.
No, not all insurance companies are out to get you by any underhanded means possible. However, they are a business and like all businesses they don’t make any money if they are free with their payouts. There are also honest and dishonest people in all businesses, so you have to protect yourself and your interests at all times.