Shady Insurance Practices

In an earlier article we learned through a Consumer Reports newsletter that many car owners are paying more than they should all because insurers have found ways to game the system to justify the rates they charge.

The consumers pointed to in this article were primarily car owners who met any of the following conditions:

• A substandard education level—And not just GED or high school diplomas, but some college certifications as well.
• A job title—Particularly those signifying a possible entry level position.
• A low credit score—Even if you do not have debt.
• The state you live in—“California and Washington, premiums are rising less than 2 percent on average since last year. But in Arizona, Illinois, and Pennsylvania, they are jumping more than 14 percent on average,” says Consumer Reports.
• The type of car you drive and its age—Owners of larger cars like pickups and SUVs as well as luxury cars cost the most to insure.

The bigger message, however, was that those who are the most economically on the fringes of life are billed the most to own and insure a car…because they do not have the means to protect themselves from unfair business practices.

But Wait…It Gets Worse!

If you think that is bad, according to a recent Steve Lehto YouTube channel episode anyone…and I mean ANYONE…can fall victim to one of the worst ways insurance companies’ game the insurance system—finding minor technicalities in your policy.

For example, justifying insurance coverage denial based on something as innocuous as having an underaged, non-driving minor living in your home that is not physically listed in your policy paperwork.

In fact this applies to car owners who:

• Have a roommate
• Have visiting children from college over the holidays
• Have someone living temporarily in their home

Follow along with the host as he provides this example and others of how some insurance providers go to any means to find a technically legal reason for justifying your accident claim denial all because your policy paperwork was not 100% accurately updated.

Insurance Co Retroactively Cancels Coverage After Accident

How to Protect Yourself

Unfortunately the world we live in, even legitimate companies are doing all they can to cheat customers and hide behind the fine print of the law. To protect yourself from this kind of abuse you should:

• Review your car insurance policy right now
• Update all information yearly
• Ask your agent any questions you have that are unclear concerning your policy
• Never trust anyone until they have earned your trust

For additional articles about your car insurance, here is one you need to know about: The Biggest Mistake Consumers Make After Finding a Car Insurer They Trust

Timothy Boyer is an automotive reporter based in Cincinnati. Experienced with early car restorations, he regularly restores older vehicles with engine modifications for improved performance. Follow Tim on  “Zen and the Art of DIY Car Repair” website, the Zen Mechanic blog and on Twitter at @TimBoyerWrites  and Facebook for daily news and topics related to new and used cars and trucks.

Image source: Deposit Photos