4 Ways To Avoid Being Ripped Off By Insurance Providers

After an accident, one of your first calls should be your car insurance provider. But what happens when the service you were expecting falls short and you end up feeling alone instead of supported by your insurance provider? While the majority of insurers are legitimate, there are a few scams that occur in the insurance industry.

Examples Of Insurance Scams

Low-Ball Offers

After writing off your vehicle, your policy may cover a replacement or the cash value of an equivalent car. Some car insurance providers try low-ball their cash offer by understating the car’s condition with imaginary complaints on the condition of your car. They may even estimate the value of your car by using a “comparable” vehicle (often with aggrandized mileage on the clock. Low mileage is a significant factor in a car’s value, but some insurance companies would rather ignore this fact in order to pay out less. Make sure you keep copies of all annual scheduled services to prove the current mileage of your written off vehicle.

High Rates, Low Deductibles

You know how they say cheaper is not always better? Insurance providers and brokers will often push you towards a policy with a low deductible. They back this up by saying you will receive a lower claim should an accident occur. What some insurance providers may fail to tell you is the worst drivers would be better off with a higher deductible.

Renewal Price Hikes

Insurance companies rely on your lack of know-how, which can sometimes be the case when it is time to renew your policy. An introductory offer that’s too good to be true may well be followed by a price-hike and little, to no explanation of what you’ve done to warrant an increase in your premiums.

Ghost Agents

If you receive an email, see an ad or get a phone call promising a deal that seems too good to be true, chances are it is. These unrealistic deals have often to be found to be offered by “ghost,” or fake, insurance agents. Before buying a policy, you should check out car insurers thoroughly. Contact the South African Insurance Association (SAIA) to enquire whether the insurer is licensed. If possible, do business with insurers you know you can trust. 

How To Avoid Being Ripped Off By Insurance Providers 

  1. Read the fine print before  you sign an insurance policy 
  2. Stay informed with all consumer information on industry trends and practices. 
  3. Make comparisons and do not just accept what your insurance provider offers you. You may be missing out on a fantastic deal with another provider. 
  4. Avoid policy sliding. Commission-hungry agents may attempt to slip additional policy coverage into your package without your knowledge or approval. This is called policy sliding and increases your premium rates significantly.

It’s Your Right To Ask

Never allow an insurance broker or agent to sell you an insurance policy you do not properly understand. Don’t allow an agent to bully or intimidate you. Ask as many questions as it takes to fully understand your policy.  It’s your money and you have a right to know how it is being spent.

Read More about complaining about your insurance company

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Insurance Guru

Insurance Guru is here to help you simplify the complicated world of insurance, so you can make smart insurance decisions and get the best insurance deals for your situation.

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