Buying Insurance? Here Are Some Red Flags to Look For
In life, you can never be too safe. You have to always plan and prepare for the worst, even if that may never come. But if it does, you would be prepared. The last thing you need is having an emergency or encountering any unpleasant circumstances without having a backup plan. The best way to do that is by taking out different insurance policies. You can never rule out the possibility of a hurricane, even if it's not common where you live, so you need home insurance, for example. The same applies to all other types, from auto to life insurance. The trick, though, is in getting the right policy for you, and that means paying attention to the small details.
These are some red flags that should make you think twice before buying an insurance policy.
It goes without saying that you should shop around for a while before buying an insurance policy. Don't settle for the first offer you get, and keep looking. The first red flag you need to look out for when buying insurance is the pricing. Say you went to 4 different companies, and those companies had a similar average cost. Then, you went to a fifth, and it seemed like they were a good choice to go with, but they cost twice as much as any of those other 4 companies. This definitely needs to be a red flag because it might imply fraud or that these guys are overcharging their clients, which isn't really something you need.
The insurance world is relatively small, and the bigger companies all have a certain reputation. While you need to ask about credentials and all that, it is the insurance company's reputation when dealing with claims that you really need to pay attention to. Are they fair? Do they try to skimp out of paying their clients? Those companies can be quite cheap when dealing with these claims because they only care about maximizing their profits. This is why it is always a good idea to have a lawyer by your side when dealing with insurance companies because they know what tricks these guys might try to pull off and they will help you get fair compensation. But you can avoid all that by looking at the company's reputation before you deal with them.
Before you buy any insurance policy, you have to carefully go through the coverage to understand what exactly it includes. The biggest red flag of all is insurance companies offering poor coverage, for any reason. It is normal for an insurance plan to have exclusions, but just how many are there? Ask the company to thoroughly explain those exclusions so you could have a good idea of what you're dealing with. If there seems to be too much, then this should definitely be a red flag and you need to stop and consider other options.
Just like overpricing is a red flag, so should be underpricing. Whenever you find an insurance company offering you plans that sound too good to be true, then they probably are. Low insurance prices mean poor customer service and below average claim processing. You basically get what you pay for, and it is not going to be a good service if you pay much less than the market average, so always keep that in mind.
Absence of Flexibility
Insurance policies are flexible, at least with reputable and decent companies. If the company you are about to deal with doesn't have that kind of flexibility, you should stop and ask why. You can get better rates if you keep at it, and some companies might even add or remove benefits at your behest. If this kind of leeway isn't there, you might do better with another company that would be at least willing to listen to your suggestions and concerns.
When buying insurance, make sure to ask about the after-sales service, and if you are not satisfied with what you hear, you should definitely reconsider, even if everything else is fine. Insurance policies can be tricky, and you will have further questions and concerns, even after you buy the plan. You might also want to upgrade or change your plan in any way in the future, and you can't do that if the company has poor after-sales service, so keep an eye out for this one.
There are plenty of insurance companies in the market, and it is important to keep that in mind. There are always good options, so take your time and don't ignore your gut feeling about a certain company; it's often correct. If something doesn't feel right, then move on to the next option.