You can’t turn on the television lately without being bombarded by insurance related advertisements. Whether it’s the insurers themselves, or comparison websites, it seems that everyone wants a piece of this lucrative market. However, with the success of the insurance industry come a number of myths that could lead consumers down the wrong path.
Here we take a look at some common insurance misconceptions to help you save.
Driving you crazy
Perhaps the most frustrating idea is that insurers will reward you for being loyal and sticking with them year after year. The reality however, is that most insurers reserve their best deals for new customers in a bid to attract business and will actually increase premiums for existing customers believing that most won’t bother to shop around at renewal time. So while loyalty may be a virtue in many aspects of life, when it comes to insurance, it actually pays to look at other options.
While looking at other policies you might want to turn your attention to comparison websites which can compare deals from multiple insurers with a single search. Another misconception is that these websites actually charge more than approaching insurers directly. This isn’t the case. Comparison websites make their money by effectively advertising products – when you click through to an insurer’s website, or sign up for a deal, they’ll receive a certain amount. However, the prices they promote are the same as approaching the insurers directly – and indeed in many cases you may find cheaper rates on comparison websites as insurers battle to appear higher in their listings.
When talking specifically about car insurance there are two main myths to tackle. The first is that third party cover is cheaper than comprehensive as it offers less protection – while this is normally true, it isn’t always the case, so if you’re looking for a cheap deal it’s still worth comparing comprehensive policies. Also many assume that policy excesses only count if you are at fault – however, with car insurance you will still have to pay the full excess if the insurer can’t reclaim the full amount.
Is cheaper better?
Other key rules to remember include: don’t insure a vehicle in someone else’s name as this is called fronting and is illegal; and don’t assume you don’t need travel insurance if you have a European Health Insurance Card as travel insurance is still needed for many medical claims as well as repatriation, cancellation and baggage.
Perhaps the biggest myth however, is that cheap insurance is always the best. While it makes sense to use comparison websites and to apply insurance promo codes to earn cheaper deals, still remember to compare the policy options available to you, to ensure you’re receiving true value for money.