The insurance industry can be a tricky one to navigate, especially when you’re in the process of buying a policy. Scammers have found plenty of ways to take advantage of people who are desperate for affordable auto insurance, and some companies will go so far as to lie about their price and services just to get your money. However, you don’t have to fall prey to these sneaky tactics if you know what you’re looking for. Here is an overview on some of the common tricks used by bad auto insurance companies and how you can spot them before they trap you into a contract that’s not in your best interests.
Hidden Fees and Conditions
Many bad companies will advertise a low monthly premium, but fail to mention that there are several extra charges and fees tacked on to make the total cost much higher than promised. These may include a “policy fee,” “administrative fee,” or “other charges.” While these fees are legal, they should be included in the original price of the policy so you know what you’re getting into. If they’re not, it’s probably a red flag that the company is trying to deceive you. If you’re unsure whether a fee is legitimate or not, you can call your state insurance department and ask what a normal fee would be for your state. They may also be able to recommend a good, trustworthy company in your area.
Beware of Impossible Promises
Some companies promise low rates for drivers who have perfect driving records and have driven for many years without an accident. While it is possible to find a company that will give you such a deal, it’s highly unlikely. A bad company will tell you that you are eligible for a great low rate even though you don’t meet the normal requirements of the policy. If you take their deal, you will be subject to many inconvenient and costly conditions. For example, a bad company may promise you a low rate and then require you to drive with a specially installed device that tracks your driving habits. This kind of device often costs hundreds of dollars and is inconvenient enough to make the low rate practically impossible to keep. You may also be required to drive less or purchase additional coverage just to keep the low rate. These kinds of impossible promises are a tell-tale sign of a scammer.
Bait and Switch Tactics
Bait and switch tactics involve deceiving you into buying a more expensive policy than you thought you were getting. For example, a bad company may advertise a low rate on one type of auto insurance policy, but then fail to tell you that the policy does not cover all of the aspects of driving that you need it to. Drivers who are new to the world of insurance are especially susceptible to bait and switch tactics because they may not know what they need their policy to cover. This kind of company will try to sell you a policy that is more expensive but that you believe covers everything you need. You think that you’re getting a great deal, but you’re actually getting less coverage than you need and paying too much for it.
Bogus “Discounts” and Free Offers
Another tricky tactic some companies use is offering you a “discount” on your coverage if you switch to their service. You may be excited to see that you could save a few bucks, but don’t sign anything just yet. You don’t actually have to do anything to get a discount. It is usually applied automatically as long as you remain a good driving citizen. If they pressure you to sign on the dotted line, walk away. Another scam you may come across is an offer for a free policy. This sounds like a great deal, but you should be wary of this offer. Free policies are often substandard and only last for a few months. You may think you’re getting a great deal, but if the policy doesn’t last long enough to cover an accident, it’s no good to you. Bad companies often use this tactic.
Auto insurance agents are people who sell you your policy and handle any claims that you make. You may also come across a few agents who are working for a bad company and are trying to trick you into a bad deal. An unhelpful agent may offer you a low rate and try to push you into a policy that you do not need. If they don’t explain what each part of the policy means and what it covers, they are probably trying to push you into something that you don’t actually need. Be sure to ask plenty of questions and take your time deciding which policy is right for you.
Buying auto insurance can be a real headache, but it doesn’t have to be. With a little bit of research and a healthy dose of skepticism, you can avoid falling into the traps that bad companies set for you. The best way to find a good policy is to shop around and compare different companies. With a little perseverance, you will be driving with the coverage you need in no time.