Most people don’t give the insurance process much thought until they get involved in an accident, or a need emerges. However, insurance is one thing you should regularly pay attention to from a financial perspective. Most people don’t realize that some mistakes could make them pay more for insurance than necessary. Setting up insurance coverage can be daunting, and getting the right one could be more problematic. That’s why we have discussed some of the most typical insurance traps to avoid.
Don’t purchase only the legally required amount of liability for your car
Keeping to the minimum required liability coverage is a standard error many people make, and it usually comes back to bite them. The minimum represents what is expected of you to drive without getting into trouble with the government. But because it covers only the primary insurance, you may have to pay out-of-pocket later and deplete your finances. The solution will be getting comprehensive insurance coverage that ensures sufficient insurance cover for your car and meets other associated needs.
Don’t choose an insurance company based only on price
Price is often the focus of most subscribers because it is the most accessible comparison tool. Grading services based on the cost is not flawed in itself. The caveat is that there are other important metrics to consider when selecting an insurance company. You also have to consider service delivery, financial health and the quality of customer service from the company in recent times.
Know the length of the policy terms, the cost of the deductibles and changes in subscription prices over time. In short, research the company, examine the insurer’s complaint records and customer reviews. It’s better not to subscribe at all than struggle to get service when you need it.
Don’t get the highest insurance possible
Trying to get all kinds of insurance protection that catches your fancy comes with a downside – you end up packing more than you need. It would be best to be proactive with risks, but you do not have to insure the most inconsequential things. You can channel the extra cash into your investing account or your emergency funds. There’s no general rule to this thing – you need to be as practical as possible with your choices.
Don’t insure your house on its market value
Buying home insurance in Canada based on the property’s market value is a blunder many people make, defeating the insurance’s purpose. Remember that you intend to build back your house in case of damage or other mishaps. So, when getting insurance coverage on your home, you should only subscribe to ones capable of handling your claims. The premium paid should cater to the cost of rebuilding, including labour and materials.
Do ask for discounts
Any form of deduction from the actual cost is always welcome anywhere in daily business life. Ditto to the Canada insurance industry – you must be ready to jump at any advantage. Obtaining discounts depends on your negotiation skills and how far you can prowl the internet.
Before you contact any insurance provider, you should diligently find information online to help you get price reductions. Information about referrals and special perks is commonly available on the provider’s website. There are several other sources of helpful information about discounts like third-party affiliate websites, online forums and other social media. You can even ask customer care reps about available deals and programmes.
There are several reasons why many skip this process altogether. Some don’t want to come off as not having enough money, while others consider it an outright waste of time. Getting discounts may appear unnecessary, but the process can help you gain valuable information about an insurance company.
Do provide genuine information during application
When signing up on any insurance policy, you’ll be required to provide details to identify you uniquely. Approximately one in three prospective car insurance subscribers lied on their insurance forms in one study. The main motive informing this behaviour is usually to get improved rates.
Hoarding accurate information during insurance application can win you immediate benefits, but most come back to hurt in the long run. In Canada, any form of falsification for untoward purposes is considered fraudulent and is punishable by law. Asides from the possibility of losing your claim to your insurance when the need arises, you may get sucked into a legal black hole.
Do read the terms and conditions of the insurance
One of the mightiest offences you can make in any transaction – and nearly everyone is guilty of it. We buy different physical and digital products without bothering about the Terms and Conditions section. Our track record of negligence on this aspect has endured because we usually do not need most of the T&Cs. One study by Yahoo Finance revealed that at least 91% of adults do not read this section before agreeing to it.
In things relating directly to your money, that section is the centrepiece of the entire transaction. It is a part you should read and reread for your safety. The company knows everything in the T&C they present to you in the T&C, so you should patiently spend time learning them. The actual size of losses resulting from ignoring the Terms and Conditions section is unclear. Instead, it is clear that most people don’t read it, and you should not be part of them. At least not when it comes to insuring lives and properties.
The Bottom line
Traps are there to be avoided. You don’t have to get into trouble because everyone else is. Choosing the right insurance company for you may be one of the best decisions. You only need to get it right, and doing that should never be difficult. The experts at Insurance Direct Canada can help you save time and money on these tiny but important details. Feel free to reach out to them via the Get Quotes button below; or follow where the Reviews button leads you to read CIBC Insurance review, Canada Life review, iA Financial Group review, etc.