Beware of these issues when buying online insurance
Beware of Online Insurance Traps!
Buying online insurance is easy and fast. But sometimes, things that seem too good to be true are just that. Let’s uncover some common tricks and see why picking a trustworthy name, like Huff Insurance, makes a big difference.
Online Insurance: What’s the Catch?
Many online insurance companies try to grab your attention with flashy offers:
- Quick Discounts: Some give you a discount if you sign up online. These discounts fall off after the initial 6 month policy term in most cases.
- Name Your Price Tool: The name your price tool might get their price where you want it. But to do so, they online insurance company will manipulate the coverage to get to that price.
- Only Pay For What You Need: This one makes me laugh every time I hear the commercial. How do you know how much insurance you need ahead of time? If you at fault in an accident, you will not know how big the lawsuit will be until it is served to you.
- Comparison Tools: They say they’ll compare all options, but sometimes, they just show their best ones.
- Short-term Discounts: A nice discount that ends quickly, leaving you with higher costs later. They will apply a discount only for the first 6 month policy term. Then at renewal, it comes off and your premium gets higher. They count on you just automatically renewing the policy and not cancelling.
- Auto-renewal: Some increase your price slowly, hoping you won’t notice.
- “Limited Time” Offers: They rush you to buy, even if the deal is always there.
- Leaving Out Details: They might not tell you everything upfront, making their deal look better. Check out several of these examples in the next section.
The Numbers Game
Here’s how some online insurance companies make their offers look cheap:
- 6 Month Policies: Almost every online insurance company issues their polices with 6 month policy terms. They are not the best at making sure you know that. I cannot tell you how many times we have clients coming in saying they got a cheaper quote online by almost 50%. When we review the quote, we point out that the quote is for a six month policy and ours is twelve months. So doubling their six month premium usually takes away most or all of any savings. And, since it is six months, they will have a “discount” that falls off at the end of the first sic months. So the second six months will be higher that the first. So the premium is more than doubling the initial six month term. premium.
- The Bare Minimum Coverage: They show the least insurance you can legally have. It might not be enough if there’s a big accident.
- High Deductibles: Your insurance seems cheap, but if there’s an accident, you pay a lot before insurance helps out. We have seen online insurance companies raise comprehensive and collision deductibles as high as $5,000. If you have a loan on your car, the bank may not accept those deductibles and make you lower them. Most banks will not accept deductibles higher than $2,500.
- Missing Coverages: Some things might not be covered unless you pay more. They typically leave off medical payments coverage, rental car coverage, or roadside assistance coverage to give you the upfront premium savings that they promise.
- Limiting PIP Coverage: This is one coverage that the online insurance companies always limit. This can make the price lower, but it’s risky if you get hurt.
- Limiting Other Coverages: They might cut corners on insurance for accidents with drivers who have little or no insurance. Lowering your uninsured motorist coverage may appear to be a big deal, but with all of the uninsured drivers on the roads, it is a huge deal.
- Not Pulling Claims History or MVR Reports Up Front: Several of the online insurance companies are famous for not pulling driving history records up front. They will pull them after they issue and you pay for the policy. Then if there are any tickets or accidents found, they will raise your rates at that time and hope that you will just pay it and not cancel your policy. With our companies, these reports are pulled before we issue the policy, so you know the real premium before you pay.
Do I Need More Protection if I Don’t Own a Home?
Some online insurance companies will say if you don’t have a house, you don’t need higher insurance limits. That’s simply not right! Everyone should think about having higher limits. Here’s why:
- Protecting Your Money: If you cause a big accident, you might have to pay for it, even with future earnings. Most people think the biggest asset they have is a house. When in fact, your biggest asset is your future earnings potential.
- Not Just Houses: It’s about all your stuff and money, not just houses.
- Medical Bills: If you hurt someone in an accident, their medical bills can be huge.
- Legal Costs: Good insurance can help if there are legal problems. If you have low limits that gets used up fast, the insurance company stops defending you. That’s right, they only have to provide legal defense up to the point that they use their policy coverage limits. So you can be left with hefty legal bills defending a lawsuit that is larger than your policy limits.
- Sleep Easy: Knowing you’re covered well means fewer worries.
- Small Price Jump: Adding more protection doesn’t cost much more. Reducing coverage does not save the premiums in proportion to the coverage decrease. So if you cut your coverage in half, you are not going to save half of your premium.
Why Choose Huff Insurance?
With all this info, where should you turn? Huff Insurance is the answer.
These online insurance companies try to tell the public that they have cheaper rates because they do not have to pay us agents a commission. That may sound logical, but they much more money in advertising that our companies pay us in commission. And they pay a lot for the celebrities that they pay to be in their flashy commercials. So instead of paying a local business owner who supports their community, they’d rather pay a multi millionaire who probably doe not even know your community exists.
Insurance is about being safe and ready for the future. With Huff Insurance, you’re not just another number. We really care and want to understand what you need. We make sure you’re protected, not just on paper.
No matter what you need to insure, Huff Insurance is there. We’ll help and guide you, making sure you get the best for you.
To Wrap Up
Buying online insurance may seem easy, but be careful. The cheapest option might not be the best for you. Knowing what you’re getting and why you need it is key. And remember, when in doubt, Huff Insurance is a name you can trust. They’re more than just insurance; they’re peace of mind.