Your insurance company is in business. They care more about their bottom line than paying your claims. This is why your insurer makes the claims process complicated and tries to give all sorts of reasons to wiggle out of having to pay you. The worst part is, there is a lot more they’re not telling you. Here are some car insurance secrets your insurer is keeping from you.
1. Your Insurer Can Save Money by Declaring Your Car a Total Loss
If your car is damaged extensively after an accident, you’re likely to believe that you’d be better off having the car written off as a total loss (totaled). Having your car declared totaled could actually be bad for you. You may recover less than the actual worth of your vehicle or less than it would cost you to buy a new one. On the flip side, having the car totaled could be good for your insurer. It will cost them less to declare it totaled than to make all the necessary repairs. This is why insurers are increasingly taking this route.
2. The Valuation Method Used for Your Car isn’t What You Might Expect
After your vehicle is totaled, your insurance has to value it before paying out your claim. Instead of relying on a 3rd party valuer, the insurance company will use a complex formula to arrive at the valuation. This usually involves doing a market search for similar vehicles and using quotes from different vendors to come up with a valuation. This leaves a lot of room for manipulation since they can use figures from an area where the car is generally cheaper. This is an attempt to lower the valuation of your vehicle. It is possible to mount a challenge if you feel that the valuation is too low. However, you’d need to get comparables and do a valuation of the car yourself.
3. Your Car Will Be Worth Less After Repairs
If the insurer repairs your vehicle, it will be worth far much less than it was before the accident. Your insurer may allow you to make a diminished value claim for the loss in value. However, you need to confirm that your policy has this option. You might also want to look at the replacement parts used to repair your vehicle. Sometimes, the insurer may use generic or salvage parts to try and save some money. This is one of the car insurance secrets your insurer is not telling you/
4. Your Premiums Could Go Up
The way insurance companies set premiums is shrouded in mystery. Some insurers increase your premiums after you get into an accident. This often discourages people from reporting accidents that seem minor. However, a seemingly minor accident can later turn out to be worse than originally thought. If you get into an accident, always report to your insurer even if you think it’s minor.
5. Your Insurer Can Drop Your Coverage or Deny Your Claim
In certain circumstances, your insurer can actually drop you as a client. One instance is if you got involved in a drunk driving accident. Normally, your insurer is not allowed by the law to drop you after a crash. They can’t wait until you actually need insurance to drop you. However, if they can prove that you lied in your insurance application, then you’ll definitely have a problem. For example, if you wrote that you’re the only driver but have a household member who regularly drives the car and they got into an accident, then they could very well deny the claim.
Before contacting your insurer after an accident, get in touch with Futerman partners. They will help with the claims process.