You might think that the business of car insurance is a clear-cut thing, since everything is black and white, right? Wrong. There are secrets that your car insurance company isn’t telling you. Here are some of them, so that you’re more aware the next time you buy car insurance.
Car Insurance Companies are Frenemies
So you think that the liberalised car insurance sector means that every car insurance provider sees its fellow providers as a threat? Well, yes, they’re all their own enemies, but they’re also indirect friends by dint of the metadata on your claims information that they can subscribe to. Metadata databases like these collect information on vehicle owners to help insurance companies determine how risky a customer you are. When it comes to personal information, however, you’re a little safer: if you stick to your car insurance provider year after year, you can expect your information to remain a secret due to privacy laws. Your information will only be shared if you decide to switch car insurance providers. For example, you will have to reveal your No-Claim Discount history and prove it to your new insurer so that you can continue enjoying the NCD.
You Can Switch Companies Anytime
If you thought to protect your personal information by sticking to one car insurance company for the lifespan of your car, know that the privacy of your personal information might come at the cost of better deals elsewhere. After all, with the liberalisation of their sector, car insurance providers are more motivated than ever to make changing insurance companies easy, much like how you can port in and out of major telcos today. The downside to this is that you may lose any discounts or favourable rates that have applied to you with your previous car insurance provider, so shop well and question thoroughly before you make the switch!
Your Driving Records Matters
Don’t go driving around thinking that you can break all the rules you like so long as you don’t cause an accident or incident that is claimable under your car insurance. All the accidents you have been involved in are always recorded, and car insurance providers will use these records to assess your risk level and their profit margins (hey, they’re a business, after all!). They subscribe to the philosophy of what has happened once, may happen again. If you appear to be a high-risk client to them, prepare to pay more for your premium even if your current car is brand-new!
They Can Deny Coverage
Car insurance providers will not prevent you from buying better coverage for your car, as it means more money and profits for them. One exception is the purchase of comprehensive covers, which is usually only made available for new cars below a certain number of years of age. They also reserve the right to deny your claim if they are suspicious of its legitimacy. For example, your comprehensive cover technically means that both you and the third party involved are eligible to claim in the event of an incident, but if you end up not being able to prove that, say, there was a third party involved in the first place, your insurance company may not approve your claim at all and you’ll be left to foot the full bill by yourself.
They Can Terminate Your Contract
A car insurance provider cannot simply decide to drop you as their client simply because you’ve been involved in too many accidents recently. Under normal circumstances, your right as a purchaser is protected, and a car insurance provider cannot simply drop you as their client as long as the insurance contract you signed remains valid. However, they can terminate your contract if they found you to be dishonest or fraudulent when purchasing your car insurance, such as lying about your car.