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Insurance mistakes to avoid

If possessing current car insurance guaranteed peace of mind, there would be no customers for the financial ombudsman’s insurance department. Sadly, many claims result in disappointment for customers who fall into some easily avoidable car insurance traps. These denied claims are in part the result of a more strict approach some insurers are now taking, because of the increasing costs car insurance fraud and other factors. These traps can be avoided by reading our guide and following these tips.

Claims for Theft

Avoid losing both your car and an insurance claim for theft of your vehicle by always locking up and fitting or enabling security devices any time it is vacant. If you leave a passenger in your car, while popping into shops or offices, ensure they will stay put, since an opportunity for thieves is created by an empty and unlocked car. Ensure all valuables are out of sight, safely locked in the trunk or glove compartments. A locked car is still a target if a computer bag; purse or camera bag sits on the seat and is easily accessible by breaking a window. Insurers will look for ways to deny claims were contributory negligence on your part is a factor. If you are faced with a denied claim due to your negligence, know that you can dispute it and ask the company for their proof that this is the case. In extreme cases, try taking it to the financial ombudsman at

www.financial-ombudsman.org.uk.

Know the True Value of your Vehicle

Insurance companies may not agree with you, when deciding how much to pay out for the replacement of your car. It is vital to keep all documents regarding the sale, any bank loans or anything that proves your purchase price. The value of your car may have depreciated since you took out the original policy, so yearly checks to see exactly how much it is valued at, will prevent disappointment when you claim is paid. Ask how the company you are with values cars, if it goes by the trade book. It will be a lot less than the amount you will need to pay to replace it.

High Excesses

These are the amounts you pay out of your own pocket, before the insurance company chips in. Excesses are a way to lower the costs of insurance payments, but may cost you more if two accidents occur in the same year. The small saving may be better made on another item, especially on newer cars with more expensive parts.

Cancelling the Uninsured Motorist Option

If you have done this to save money, it may be unwise, since the numbers of uninsured drivers are increasing due to high costs of insurance. Be aware of the cost of replacing your car when switching policies or removing extra features, in case this item is not included, or you inadvertently cancel it.

Keep Insurance Details Current

Any information that later turns out to be inaccurate can effect any claim you need to make. Due to increased fraud, companies are facing higher costs and looking at claims with a more critical eye. If you have modified a vehicle, changed addresses or made any significant changes that could be used to deny a claim, make sure you let the insurance company know about it, as soon as possible.

Examine Your Policy and Dispute Denials of Claims.

In a recent case referred to the financial ombudsman, a customer’s new car was stolen and not recovered. He thought the policy would pay him the new car price in full, but was horrified to discover the insurance company was offering to only several thousand pounds less, arguing the car was in fact, not new at all. This was based on their premise the dealer had registered and owned the car for months before it was purchased. Fortunately, the customer asked for help from the ombudsman who directed insurers to pay the full amount, plus interest, dating back to the time of the theft.

Classic Cars and Insurance Claims

If your car has a special value, because of its model and make, ensure you have the appropriate level of coverage. So called, “Classic Cars,” may be valued at their age only, when claims are made, if the insurance company is unaware of evidence to support its increased value from restoration. Keep all receipts for parts and work, along with photos and any other documentation, if your car is special in any way. Online forums often are a good source of information regarding the insurance issues faced by enthusiasts who restore and drive older cars.

Disputed Repair Bills

If your insurer claims the local garage can fix your car just as well as the dealership you bought it from, then you may have a fight on your hands. You are entitled to seek car repairs at a garage which should restore the car to as good a condition as before the accident. Proof of good condition, such as photos, for older cars, or independent valuations for special cars, and receipts for new cars are all relevant to your case for a decent level of repairs.

 

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