Three Thing You Don’t Know About Your Car Insurance That Will Cost You Money

One: When switching insurers, you need to cancel your initial insurance policy officially.

When you purchase car insurance, the insurer is likely to state that you may cancel your coverage at any time. All that is required of you is to notify the company in writing the date of the termination. However, many customers are under the assumption that once they decide to cancel the policy at the end of the coverage period, all they need to do is to disregard the bill. If the bill is not paid the second time around, the insurance providers will cancel your account for non-payment and this will go to your credit record.

What You Should Do: It is best to call your agent or any of your insurance company’s representatives and inform them that you are cancelling your coverage. Indicate the date of your cancellation otherwise; you might end up uninsured for a long time. Next, wait until your insurance company sends you a cancellation request, you will need to check for errors, just to be sure. You may also need to prove to your former insurance provider that you purchase car insurance from another company.

Two: You are responsible for your friend’s poor driving.

No matter the type of policy or the rates for car insurance that you paid for, you are responsible for filing claims once you let someone else use your car and crashes it. You will pay for the deductibles that apply to your policy and yes, there is a likelihood that your rates will increase due to filed claims. More so if you made any recent claims.

What You Should Do: If the person took your car without asking permission, you will not beheld liable for the damages. That said, if your friend is not insured and have caused significant damages that are beyond your policy limits, the injured party might come after you for medical and property damage bills.

Three: You will increase your overall bill if you pay in instalments.

Whenever you divide your annual premium payments into instalments instead of paying for a year’s worth of coverage in one go, you will be charged with “fractional premium”. While payment terms presented by many insurance companies are offered on a six-month, quarterly, or monthly basis, virtually all service providers will charge an administrative fee for dividing the payments. The more you break down the fees, the more the charges will add up regardless of the rates for car insurance.

-What You Should Do: Make it a point to always ask how much the extra fees will cost once you settle for instalment, upfront. If the charges will not cost you much, then maybe it is worth a shot. However, know that insurance companies have the right to cancel your policy if payments are delayed. The payment process is much more simplified if it is paid annually.

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