These Small Car Insurance Mistakes Can be Really Costly in the Long Run
Are you wondering why your car insurance premium keeps on increasing every time you renew your policy? The insurance experts say it may have something to do with your lapses. They recommend you stop committing these mistakes to keep your premium rate low.
Whenever you fail to pay on time or renew your policy, most insurance companies will conduct an inspection on your vehicle – which contributes to a higher premium rate. Aside from that, most car insurance holders will lose their no-claim bonus benefit if their plan lapses for more than three months. The experts recommend you avoid any policy lapses to keep your insurance premium low.
Incorrect Insured Declared Value
Two crucial factors determine your car insurance premium rate: the vehicle’s value and age. According to the experts, most policyholders commit the mistake of declaring their vehicle value incorrectly to lower their insurance premium. They don’t recommend you do this because it’ll only increase your premiums in the long run.
Instead, make sure to quote the car’s real value when you bought it. The companies then will calculate your vehicle’s IDV based on its depreciation value up to five years. Meanwhile, if your car is older than five years, its IDV will be calculated based on the current market value.
Claiming No-claim Bonus
Most policyholders are entitled to a no-claim bonus if they don’t make claims caused by minor accidents throughout their policy. According to the experts, your NBC can go as high as 50% if you don’t make claims for five years. However, most policyholders commit the mistake of filing petitions to get more money.
What they don’t know is that car insurance premium increases whenever the NCB resets to zero. Experts recommend that you should be careful while driving to avoid getting into accidents and filing a claim. They also suggest you only file a claim if you’re in dire need of a car renovation.
Availing Too Many Add-Ons
Aside from paying for the policy’s basic coverage, car owners can opt to avail add-on riders like engine protect. While these riders help protect your vehicles against all sort of problems or accidents, you may end up paying a higher premium in the long run. The experts suggest you evaluate your car first to determine what riders to get before availing an insurance policy. In this way, you’ll only pay for the plan and add-ons you need.
Not Considering Online Purchase
Most policyholders prefer to hop from one insurance company to another while canvassing for the best deals in the market. While this is an excellent strategy to ensure best policy coverage, you might end up wasting more money and time in the process. Instead of conducting personal canvas, experts recommend making use of technology to shop for the best car insurance deals online.
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