We’re all familiar with auto insurance companies. We see their commercials, are familiar with their brand mascots and slogans, get regular emails and letters from insurance agents, and regularly cut them checks to ensure we remain legal and road-ready. But for as much as we think we know about car insurance, there are some secrets these companies would prefer to keep behind lock and key.
With that being said, here are a few specific things your car insurance company probably doesn’t want you to know:
-
They Profile
We live in a society where it’s considered offensive to “profile” others based on personal factors and characteristics. Yet in the insurance world, this is the normal way of doing things. Actuarial data shows that drivers tend to be safer or more dangerous based on certain factors. So rather than ignore this information in order to be politically correct, insurance companies legally leverage it to set their rates and protect their profits.
When you apply for car insurance, the application is very important. Your insurance provider will look at things like gender (women pay on average 12 percent less than men do), education, credit score, age, and location.
-
They Don’t Want to Compensate You
Think your car insurance company genuinely cares about you as a person? Think again. While they don’t dislike you, they’re far too focused on making money to become emotionally invested in you – particularly when it comes to car accidents.
As The Kindley Firm explains, “Profit is the primary motivator for insurance companies. To that end, they’ll do whatever they can to lower your settlement offer or not compensate you at all.”
Keep this in mind as you negotiate with your car insurance company. They’ll present low-ball offer after low-ball offer in hopes of getting you to settle for far less than your case is worth. Hold out until you get the amount you know you deserve. (You may need an attorney to help you determine what this figure is.)
-
At-Fault Drivers Can Still Have a Case
Most states have comparative negligence laws in place, which means drivers who are at fault in a car accident can still have a case. In other words, it can be deemed that you were 65 percent at fault, but the other driver was 35 percent to blame. This means that instead of the entire settlement going to the other driver, you can share in a portion of it.
Insurance companies would prefer that you didn’t understand comparative negligence, as it allows them to more easily maintain profits without having to pay out in cases where an at-fault driver can claim another driver was partially at fault.
-
They Just Hope to Break Even on Premium Payments
You might think you pay an outrageous amount for car insurance, but the reality is that the insurance company is simply trying to break even on your premium payments. The marketplace is so competitive that they have to continually slash prices just to keep up. They make most of their profit by investing premium payments and earning interest.
-
You Can Fight a Denied Claim
Just because a car insurance claim gets denied, doesn’t mean you have to give up and accept their ruling. While car insurance companies have a legal obligation to compensate “in good faith,” they sometimes deny legitimate claims. If you feel that your claim is in fact legitimate, you can fight back with a lawsuit. You’ll want to hire an auto insurance lawyer to walk you through this process.
Look Out for Number One
At the end of the day, your auto insurance company is hell-bent on protecting their bottom line – and who can blame them? They’re in the business of turning a profit and will do whatever is legally possible to pad their profits.
As an insured driver, it’s up to you to look out for your own best interests. Nobody else is going to do it for you. Take your time, stand up for yourself, and don’t back down. Never forget that you’re the one writing checks to the insurance provider. They work for you and it’s time to reclaim a little bit of that leverage.