There is no scarcity in dealing with misconceptions when you work as an Insurance Advisor for several years.
Often times, I hated that part of my job when I had to be the one to burst the bubble for the clients when they tend to hold on to their insurance misgivings or proclaim their sincere faith in a certain insurance myth.
In time, I have learnt to brace up and talk sense to my clients while working with them to provide the best insurance coverage possible for the most reasonable rates.
And I think it is only fair to let you in on some of the most common misconceptions that I have heard repeatedly over the years. It would be my pleasure to show you the correlation between an Insurance myth and the truth surrounding it.
Listen into this conversation between my client and I
Client: okay, I have bought a car finally!
Me: Great! Congrats!
Client: Thanks! I have all the information you require to get the insurance started on it right away.
Me: Very good! (And I settle into getting the details on the vehicle which my client is providing very efficiently.)
We are almost at the end. Suddenly…
Client: Oh, and one more thing. The color of the car is blue.” So, I hope you can give me a better rate?
Client is looking at me expectantly as if he just delivered the punch line and it is my turn to declare a favorable verdict for him.
I manage to tell him somehow that colors don’t impact the premium at all and it is the driving record, claims history of the type of the vehicle among other things that determine the insurance rate.
Myth: Red Car is Always Costly to Insure.
Reality: Red car is no more costly than any other car.
Do you have any tickets in the past three years? (Me)
No (Mr. Smith)
After completing the quote, I pull the driving history report and roll my eyes seeing 2 tickets in 3 years time for our Mr. Smith!
Mr. Smith! How come you didn’t disclose these tickets to me? (Me)
Because I did not get any demerit points for them and it is not on my record. (Mr. Smith)
Myth: Absence of Demerit points for a ticket qualifies the client to maintain his clean driving record as it is not counted against him.
Reality: Absence of Demerit points do not make a ticket go away. If there is a ticket, with or without the demerit points, it is counted on your record.
Yet another misgiving is about a No Claim At Fault Accident.
The notion is that if a client faces an At Fault accident (client causes accident) and do not make a claim to get compensated for the damages to the vehicle, it would not be rated on their policy. Regardless of claiming or not claiming, the accident was your fault and it will be rated.
Myth: If you do not claim for your loss, your accident will not be rated against you
Reality: Yes, it will!
Another misconception that I handle very often is related to the age factor.
A client informs me one day that he turned twenty five!
I say, “Happy Birthday”! I was totally unsure of the purpose of his visit, when this happened the very first time.
“Isn’t my Insurance supposed to be cheaper when I turn 25?” He asked.
Oh no! Not again (I groan)
“Mr. Doe, Your premium will start getting better when you are a matured driver and steer clear of accidents. When the renewal comes, if your driving record remains clean and the Insurance Company as a whole have a good claims standing, then you will get a cheaper premium. But being 25 cannot earn you a cheaper premium right away.
Myth: At age 25, the policy holder will immediately witness a tremendous decrease in the premium
Reality: That is not true. In order to earn a good premium, you have to maintain your driving record and good claims history in the years to come. There is no short cut. Being 25 does not help you to fast forward the process.
Sometimes, a client gets confused on the differences in the premium on his policy and that of his neighbor when they both are insuring the same type of vehicle.
Well, no two policy premiums are meant to be the same, ever! Doesn’t matter if you live in the same neighbor hood as the other policy holder. There are too many other factors to consider- for starters, the Vehicle Identification Number (VIN) which is unique and which greatly determines the loss history associated with the car YOU are driving, your driving record which should be different from your neighbor, the company you are insured with etc are only some of the factors considered.
Myth: If my Neighbor is getting cheaper rate for his car insurance, I should be getting the same rates as well
Reality: Not true! Your Premium is unique because your risk profile is unique to the Insurance Company you are insured with.
Are you guilty as well in entertaining any of these Insurance myths? Or do you have a new one to share? I am listening