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How to Avoid Profitable Claims Without Car Insurance


Car Insurance Quotes Tampa - When you want to choose the most appropriate car insurance, usually a lot is taken into account, including filing a claim later. Quite a lot of people think that taking car insurance and not using it is a waste and a loss. Because if there are no claims at all, it means the premiums are forfeited and it's a shame to have wasted so many millions in a year just to buy insurance. So this triggers people to think twice when going to insure their car.

Many people feel disappointed with this kind of situation. They are not satisfied with the policies applied by the majority of car insurance companies. Imagine, already paying a fairly high premium, but if it is not used it just disappears. Not to mention if there is a claim submission, it is not necessarily the sum insured that comes out according to expectations.

Sometimes when submitting a claim it turns out that the claim paid is not in accordance with the agreement because this rule is from an insurance company which is often overlooked due to not carefully reading the terms and conditions submitted. So annoyed right?

This is what a number of insurance companies are finally starting to understand. Because they don't want to lose customers due to things like those mentioned above, many car insurance companies have started offering "no claim, money back" car insurance products.

With the emergence of this type of product, the rhythm and passion of the car insurance market has increased again. Most of the customers feel tempted by the offer, because they think there is nothing wrong with paying up front if the money can be returned later. If you think about it, it looks like there's nothing to lose. However, is it really that easy?

Get to know the 'No Claim Money Back Car Insurance' Program

Often this type of insurance sets a trap that the customer does not think of. Surely many think that as long as the car is good and there are no problems or accidents, the money can be fully returned.

Well, this thinking should be revised. Because it is impossible for a business to lose or not make a profit at all. Do not easily think that money can be returned easily. There must be terms and conditions that must be studied clearly before deciding to take the car insurance.

Instill in advance the thought that premiums are the main source of life for insurance companies. The premium is usually used by the insurer to pay a number of costs. Therefore, there are several cost components that have been taken into account by the insurance company before setting the premium. The following are the costs in question:

1. Claim Ratio

This cost component is the ratio between premiums received and claims paid. So if in a year out of 1000 cars there is 1 claim, then the claims ratio is 0.1%.

2. Acquisition Cost

Included in the cost of acquisition is the cost to pay for marketing costs. This fee also includes costs for intermediaries such as banks, insurance agents, insurance brokers, leasing, and so on.

3. Overhead

Included in overhead costs are expenses to pay for the operating costs of the insurance company concerned. For example, employee salaries, building rental costs, maintenance costs, electricity costs, advertising payments, and so on.

4. Profit Margin

Of course, no company wants to lose money. Therefore, this component is mandatory and must be taken into account by insurance companies in determining the amount of premiums. If not, then the insurance company will find it difficult to make a profit from the products they market.

From the four cost components, the amount of premium that must be paid by the customer is created. Logically, all these costs will be used by the insurance company. So how will they return the money if there is no claim? Of course with the terms and conditions earlier.

Usually the main requirement is to never submit a claim in the current insurance period. Kinda hard isn't it? Because every day we use vehicles, every day there are risks to our vehicles.

Even if it is true that there is no claim and it is returned, it does not mean that the insurance company will return 100% of the customer's funds. Surely later there will be a discount on this and that fee which in the end your funds will only return about 50%. It can also be returned a certain percentage and the customer is required to continue the insurance in the following year. Funds will be returned in the form of a discount on insurance costs in the following year.

Actually, in general, if you think about it further, it's only natural to apply these conditions. The insurance company certainly does not want to lose its credibility and tries to keep its promise. Therefore, conditions were issued that did not burden the insurance company in returning customer funds. The insurance company tries to keep its promise at the beginning, but on the other hand will think of seeking maximum profit.

For example, if it is returned in the form of a discount on insurance funds in the following year, it means that the insurance company has time to rotate the funds in other investments until they reach a certain profit.

In addition, the value of money will decrease every year. So that in the following years the value of the initial insurance that we paid was not felt heavy by the insurance. Compared to the value of the premium every year will also increase. So the cuts in funds by the insurance company could be only a few percent.

One more thing, generally the amount of premium on this form of insurance is much more expensive, it can reach a difference of about 10% -15% with other types of insurance. Thus, even if it is returned only partially, of course the insurance company does not feel a loss. On the other hand, as customers, of course, we will feel the loss. Because the slogan that was determined at the beginning was not entirely true.

Don't be easily tempted

Looking at some of the explanations above, it is quite clear that it is better in determining which car insurance to use, don't be tempted by their advertisements that state that money can be returned if there is no claim.

If you want to choose the right car insurance, you should consider the risk to your vehicle, the ease of filing a claim, the reasonable premium costs and the credibility of the car insurance company.

Keep in mind that buying protection is not free. Of course, there are costs that you have to pay. It's just that, by thinking smartly, these costs can be kept to a minimum. Happy hunting for car insurance products!

(Rahani )

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