Does Your Insurance Policy Confuse The Daylight Out Of You?

I guess the first time you realized that the time had come to phone for a few insurance quotes, you never once dreamed how complicated and overwhelming insurance policies can be. There might be stuff you thought your policy covered, but when it was time to claim you realized you were improperly covered. There might be certain variations and ommissions on your policy that you weren’t aware of – this can easily turn into your worst headache.


Herewith a couple of the most frequent insurance policy misunderstandings, thoughts and false ideas investigated further:


As my car’s value depreciates yearly, my premiums would also be reduced, right? That could appear to be a rational conclusion to you, but keep in mind that cars are most times repaired and not replaced (as far as feasible of course!) and unfortunately the cost of parts, labour etc increases yearly.


If I decide on a certain insurance policy now, my premiums will stay the same year in year out, except for the 12-monthly inflation, right? No, not necessarily. Premiums are generally only set for a year. After a year insurance firms would assess your claim history of the past 12 months and your premiums might be modified accordingly. If you ended up being a high risk client by claiming a couple of times in the past year, your premiums will most probably increase. On the other hand, if you’ve proven that you are able to maintain a squeaky clean claim history, you may also be rewarded by lower monthly premiums.


If my policy includes an excess amount, I will only need to pay this excess if the accident was my fault, right? No! An excess amount is generally a voluntary amount – you commit to pay the excess amount no matter the cause of the accident or incident. Many insurance companies will endeavor to recover the excess amount from the responsible party if the accident was not your mistake, but this differs from business to business and cannot always be guaranteed. When getting insurance quotes, check into the different excess alternatives and also how that would influence your premium.


I have a gear-lock, so I don’t have to take any other safety measures, right? Once more, not quite! Many insurance companies won’t say yes to an insurance policy if there is not some other form of security such as an immobilizer or a tracking device. The more safety measures you have in your vehicle, the lower your insurance quotes as you are then considered to be a low risk customer.


You do not have to see my vehicle prior to deciding to insure it, right? Some insurance firms would like to examine your vehicle before finalizing your insurance policy. You can meanwhile get a number of insurance quotes, but the insurance coverage would not be activated before this inspection. They firstly have to inspect if the safety measures in your car meets their requirements and secondly they have to make sure that the car is in the condition you declare it to be in.


Unfortunately there are tons of chance takers out there- both in the form of unethical customers and insurance companies wanting to exploit clients, therefore it’s very critical that both sides (the insured and the insurer) take measures to protect themselves. Never assume, even if you have to ask a million questions, make sure that you completely understand your insurance plan.

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