Auto Insurance is a significant recurring expense that worries most people due to ever-increasing premium rates. However, such increase in insurance premium can be avoided by paying attention to some standard errors and avoiding them to keep the auto insurance premium under control.
You should avoid following common mistakes so that your car insurance premium stays under control:
1. Non-renewal of insurance policy
Most of the insurance companies offer discounts you renew your policy on time with the same company. They offer discounts like loyalty rewards, ‘No-Claim’ Bonus, etc. All these benefits and discounts will be forfeited if you do not renew your policy on time. In addition to forfeiting the renewal discounts, driving without a valid insurance is an offense which will invite a ticket, and the scenario can have a much more financial impact in case the vehicle is involved in an accident. So, it is always recommended to renew the insurance policy on time.
2. Impact of an ‘At-Fault’ Accident
An accident is something that everyone wants to avoid which however sometimes do happen due to an error in judgment or negligence of either party. Most of the accidents are however avoidable by being more vigilant on the road and obeying rules traffic at all times. In addition to having a dual impact on an individual like an injury to self and damage to the vehicle; the accidents also will raise the cost of insurance premiums (in case of at-fault’ accidents). There is no way to get out of this situation except to follow the rules and drive carefully at all times. Even an ‘Accident Forgiveness’ clause in the policy will give immunity only for the first accident. So, vigilance on the road will not only benefit your safety but also your wallet as you will be paying lesser insurance premiums in the long run.
3. Traffic Ticket
Traffic violation ticket not only increases the chance of an ‘At-Fault’ accident but also increases the insurance premium significantly. All type of ‘moving violations’ like over speeding, driving without a seatbelt, driving through a red light or a stop sign or making an illegal turn will impact the record. Insurance premium increases with every such violation and keeps mounting, and in fact, two or more tickets combined with an at-fault accident will at least double the insurance
premium. Please remember that these tickets stay on record for three years from the date of conviction. So it’s in the interest of everyone to drive with care and follow the rules of the road.
Related Article: How is your car insurance premium calculated
4. Missed Premium Payments
If you don’t pay your insurance premium on time, your insurance policy can be canceled. Any such cancellation is treated like a traffic ticket which will increase any subsequent insurance policy premium. In fact, such cases are dealt with just like ‘ nonrenewal of policy’ thereby making the individual ineligible to take the benefits that are offered by the company to regular customers. So, make sure that the premiums are paid on time and consult the broker immediately in case of any miss to see if something can be worked out.
Not disclosing complete details like a ‘New Driver’ or not mentioning about a traffic violation ticket while shopping for quotes might save some money initially but will have grave consequences in the long run which will cost even more. In such cases, the insurance company may decide to back-charge for the premium applicable to the actual information. You should be honest from the start to shop around for the best rate and get some help finding it
6. False Claims
Furnishing a false insurance claim is an offense under law and can invite legal proceedings in addition to increasing the insurance premium by twice or thrice the actual amount in case of renewal or new policy. Such act will impact the individual for a long time as the same will get your name in the Insurance Crime Database and getting insurance for your home or business will also get impacted adversely.
7. Not buying from a local broker
Another common error made by most of the insurance buyers while buying insurance is to buy from a direct writer insurance company or a brokerage that is owned by an insurance company or where an insurance company has a controlling interest in brokerage. This devoid the consumers from availing the following benefits:
- The consumer will not get the independent insurance advice that you can get from a broker.
- The consumer will be left to deal with only one insurer.
- Personalized Dealing – Insurance brokers are in your neighborhood and create local jobs. While dealing with an insurance broker, you know who you will deal next time when you call. But the same is not the case with direct writers as they are large corporations and every time you call, you will be dealing with a CSR that you have never dealt with before.
Related Article: Why should you work with an independent insurance broker?
8. Buying Car Insurance from an Unlicensed Brokerage
There are advertisements in the classified section of the newspaper and also on the internet that you would have seen which offer huge savings on car insurance. You’re asked to pay upfront & typically through PayPal or a Western Union money transfer wherein you get a certificate of insurance then never hear from the brokerage again. Unfortunately, this happens all too frequently, and the unsuspecting buyer has become the victim of an insurance scam. If the price seems too good to be true; most likely, it isn’t. So, you should first check with the Registered Insurance Brokers of Ontario (at www.ribo.com) to see if the brokerage is, in fact, a properly licensed brokerage.
Be careful to enter the full name of the brokerage – scammers will often use a slight variation of a real broker’s name – and make sure the telephone number matches.
Please note that Aaxel Insurance Brokers Ltd. is a fully licensed and bonded independent insurance brokerage.