Avoiding Insurance Scams

Many unscrupulous individuals are preying on a legitimate industry designed to protect the safety of the public. Though one may have avoided this altogether, it has an effect one the pricing of one’s very own car insurance. What happens is that the cost of the scam is passed on to the legitimate public. Here are some of the ways one can be protected against insurance scams.

1) Legal document. An insurance policy is a legal contract by and between the insured and the insurer. One must go through the provisions and must fully understand the obligations one agree to when signing it. It also should outline the responsibilities of the insurer. Essentially, the policy must describe what are considered covered, or part of the insurance coverage, and what are not. One of the common issues on coverage is if one’s car is covered as a private vehicle yet it is being used as a work vehicle. Also, if someone not part of the coverage operates the unit, then this is not to be paid by the insurance if a mishap occurs. One must be truthful about what indicates in the policy or else one would be liable under the law. It is this misrepresentation that the law seeks to correct.

2) The premium is costing of risk. The agreement of one’s coverage means the insurance company assumes the risks involved in the ownership and operation of the vehicle. Factors that determine one’s over-all risk includes one’s driving record, residence, age, gender and the frequency one drives the car. Once calculated, the company is statistically hedging on earning on the premium paid as against any costs that may be incurred. Since no one wants to meet an accident, this makes the insured a partner of the insurer, but if an accident does occur, proof that there was no fault by the insured is the best bet of insurers.

3) Since renovating and changing cars are pricey just the same with medical treatment, it is for these reasons why car insurance is expensive. There are those insured who give false statements regarding their requirements to pay a lesser premium. Others present an illicit petition. This means the risk is undercharged and in the end one pays more since the insurer pays more. So reporting the risk considerations is important in applying for insurance coverage.

4) Illegitimate claims are a bane to an insurance company’s business. As it is in business, when expenses go up so would the service rates. This raising of service rates affects everyone. This means one is being charged by the insurance company to recoup the losses incurred because of illegitimate claims or undercharged risks. Making a legitimate claim is thus a big part of the insurance business and thus the company merely investigates the validity and the legitimacy of the claim. So one who does not truthfully indicate all the risks involved in an insurance coverage scams not the company but others who will follow to be insured.

See: Apply for gas card

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