Insurance tricks and traps

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Insurance Traps To Avoid

Car insurance companies can be pretty cute; apart from that eye watering premium they have many, many other ways of squeezing money out of an unsuspecting public! With a roughly 40% increase in premiums over the last year or so and an average comprehensive premium approaching the £1000 mark (although there are many young drivers who would absolutely love to pay as little as that!!!) You would think that they would be quite content with the money they were raking in already but just take a look at these little perks:

Alteration charges. Seven or eight years ago only a small proportion of car insurance companies would charge you a fee if you changed your car, or altered your details such as address, recent accidents, etc. Now almost 2/3 of them do so, and the price can be in three figures!

Excesses. This is the contribution that you have to make towards every claim and not so long ago the most common excess was about £100 so. This is now risen to around £500 or even more.

Cancellation fees. Once upon a time a lot of companies would allow you to cancel after a certain time and receive back a high proportion of your premium. Nowadays the vast majority of companies charge a hefty fee and some even confiscate 100% of the remaining balance!

Refused claims. Insurers are perfectly entitled to expect you to take reasonable precautions to avoid having your car damaged or stolen but some of them are now taking this to extremes. If your car keys are stolen for instance, and then used to drive away your car, expect a huge battle unless your insurer is a very, very good one indeed. Leave it unlocked at a petrol station whilst you go and pay your bill and if it is pinched you will probably have even less chance of ever getting paid!

An insurance policy is a tightly worded contract between yourself and your insurer but they have a big advantage over you; their solicitors wrote it. You will almost inevitably find that you are obliged to inform them immediately that any of your circumstances change, so if your car has to be parked for a while on the roadway overnight instead of on your drive, if you move to temporary accommodation, if you change your job, or any one of numerous other details without informing your insurance company they will have an excellent excuse to fight your claim if your car is stolen or vandalised.

I would be more sympathetic towards the insurance companies who, when they receive a claim, suddenly discover that the claimant is younger than he or she claimed to be, is not entitled to as much no claims discount as was written on the proposal form, or who had prior accidents or convictions which were not disclosed, if it was not for the fact that they very often make no attempt whatsoever to check on these details before taking the customers money, but wait until there is actually a claim.

The moral of the story; make sure that everything that you write on an insurance proposal form is 100% accurate. If any of your circumstances whatsoever change which could affect an insurance quotation, let your insurer know about it right away (secure in the knowledge that they will probably charge you a fee for taking note of it). And finally read the policy details, read them again and continue reading them until you fully understand them; otherwise that cheap insurance policy could turn out to be the most expensive purchase you have ever made.