When you sign up for a new insurance policy, chances are the company will inundate you with mail stuffed full of bills and declaration pages with the expectation you will read every last word on the pages.  The truth is: Only a handful of people read the legal disclosures and those who do typically don’t understand what all of it means.  The company expects you to know what policy you own.

You are in charge of your policy

If you file a claim, your company does not sympathize with your lack of knowing what is covered and what is not.  They will refer you back to your agent or point out to you where the policy states coverage and exclusions.

They will find out about information you leave out

Companies have a general database they can access for claim information, medical information and credit history.  They pay companies to gather personal information about you to complete the underwriting process.  They know about your tickets, your credit history, how long you have been with your company and any other companies in the past.  If you are not upfront about your situation, your policy can be issued with surprisingly higher rates.  When you call to dispute to legality of the higher costs, they will have access to the information that determined your final rating.

You can’t negotiate a rate

Rates for every single policy are filed with the state in which the company is located.  If you notice a rate increase or you call for a new quote, the representative can’t lower the price for you.  You can’t negotiate a lower rate.  You are paying the required amount filed with the state’s Insurance Department.  The only time you can reduce the rate is to lower your coverage.  If the quote comes back at $50.00 a month, you can’t offer to pay only $35.00 and expect to keep the same coverage.

You can’t escape a claim

Claims are a matter of public record when the insurance companies are involved.  If you fail to mention you were involved in a hit and run accident, the company will find out.  Any claims you have filed, whether or not you have collected from them, will show up on a list during the underwriting process.  It is also important to remember all reported claims are visible.  If you call and open a claim, but you decide not pursue or it is closed without payment, the claim can be counted against you when the company is determining eligibility or rates for the policy.  Frequent auto claims and your driving record affect the rates on your life insurance policy as well.

You need to review

Make it a point to review your policies with your insurance company annually or every two years.  It is important to stay on top of the changes in the insurance market and to update your insurance company on any improvements, life events and any concerns regarding your policies.  Reviews help you and your insurance representative identify potential gaps in coverage that can affect a claim in the future.  They are there to recommend, you make the decision that is best for you.  They will make detailed notes if you accept or decline coverage to protect themselves later on if a claim does occur.


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