4 Things You Need To Know About Insurance Companies

October 26, 2020

Insurance is a necessary evil in life. For the lucky ones, it seems that they are paying endless premiums without ever having to make a claim,

and for the unlucky ones who need to make a claim, they find that the insurance company will do all it can to stop paying out the compensation that is due.

Whether the insurance is for your car, your home, or your business, they will try underhand tactics to avoid paying out but will continue to collect your premiums. Occasionally, an insurance company will come good and will pay out what you are rightfully due, but sadly you will normally fight with your hands to achieve this. To make you as prepared as possible, we are now going to take a look at 4 things that you need to know about insurance companies, so read on to find out more.

1. Where You Live Makes a Difference

As much as insurance companies will try to keep it quiet, it is true that where you live can make a huge difference to your insurance premiums. If we look at car insurance, for example, then your zip code will have a huge bearing on the amount that you will pay. Inner-city residents face paying higher premiums. Not only because there are more cars on the road – which means they are more likely to have an accident, but also because there is more crime in inner cities than there is in the countryside, so their chances of having their car stolen are increased. Sadly the only way of avoiding these increased premiums is to live in a part of the country where there is less traffic, and the crime rates are lower. 

2. They Are a Nightmare to Negotiate With

When you have an accident, whether in a vehicle or the workplace, you will often be injured, and in some cases, your injury can be so severe that you are never able to work again. On top of the loss of earnings, you will also be faced with huge hospital bills, so you need to seek the appropriate compensation. This is when you need to negotiate with an insurance company, and this is where a lawyer comes in handy and will earn their crust. Professional lawyers are much more adept at arguing a case for compensation after a car accident than amateurs with no experience. Add to the fact that you will be traumatized by the events surrounding your crash. It makes much more sense to engage a pro if you want to maximize your compensation. 

3. Your Credit Score Matters

Everyone has an individual credit score, which normally determines the rate at which you can borrow money, or even whether you will be lent money at all. Well, did you know that insurance companies will also take into account your credit score when setting your insurance premiums? In a few states, this practice is illegal, but in the majority, studies show that there is a direct correlation between your credit score and your insurance premium. They justify this because they believe that the lower your rating, the more likely you are to have an accident, and you are, therefore, a riskier proposition to insure. This may well not be the case, but that doesn’t matter because in the eyes of the insurer it does. As with many things in life, the richer you are, the less you will pay, but that is just a reflection of the society that we live in today. 

4. Your Driving Record Matters

The cleaner your driving license the less you will have to pay, full stop. This also extends to making claims, regardless if they were successful or not because all claims, accidents, and traffic infringements are automatically logged into a database and it will be this database that will be used to determine the premiums that you will pay. It doesn’t matter if you try and shop around and use a different insurance company as they all have the same database so the level of your premiums will barely change.

As we have learned, insurance companies can be difficult to get on with. They will try and avoid paying the compensation that is due as a result of an accident, so it is often best to hire a pro to fight your case. Your premiums depend on where you live and how many previous accidents or traffic infringements that you have had, and surprisingly they will even take into account your credit score when assessing your premium level. So, if you don’t want to fall foul of insurance companies, bear these points in mind.

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