You don’t want to make a mistake when buying insurance for your house, car, or other property. Insurance companies are only interested in one thing, and it has absolutely nothing to do either with your financial health or your personal life. Insurance companies are not charities. They will do whatever it takes to maximize their profits, even denying vital details. What are some items that insurance companies want you to not know? Continue reading to learn more.
A great Insurance Policy Agents market insurance to make a profit. Insurers often give them additional profits to help them sell their policies. Agents are paid higher commissions for signing up clients with low risk. The premiums they pay are therefore greater than their claims. It will be easier to get insurance that is right for you, rather than the broker’s, if you are aware that they may place their interests above yours.
How premiums are determined
Although all insurance companies use the same basic risk factors to determine your premiums (e.g. your driving record, age, credit history, and ownership of a home), there are many other variables that are not disclosed. You are simply not aware that every insurance company uses different formulas to calculate these risks. According to the National Association of Insurance Commissioners, insurance rates for the same policy can range from $600 up to $1,300 depending on where you live.
Diminished Value
Even if your car has been in an accident, its value will drop significantly, regardless of how well it was repaired. What most insurance companies do not tell you is that you may be able to collect the difference. This is what is called the diminished value. It is something you should remember when purchasing insurance. Keep in mind, however, that not all insurance companies will allow you to obtain this amount, particularly if the insurer covered the cost for repairs. You can still get a tax deduction for it. This is why you may want to hire an inspector to check the work and assess the loss.
Your mechanic?
You might believe the repair service is on your team. This could cost you a lot and even threaten your safety. Many insurance companies have formed partnerships with repair shops that are “approved” by their insurers. This is a very lucrative deal for the repair centre and they will cut corners to keep repair costs down in order to keep their insurer happy. Although there is no evidence to support this, the risk is too high to ignore. These are just a few of the things insurers can keep you from, which could impact the carrier from whom you choose to purchase insurance. There is not much you can do about them, but knowledge is power. You can ask the right questions and not just follow the advice of the agent.
