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7 Ways You’re Getting Ripped Off By Insurance Companies

7 Ways You’re Getting Ripped Off By Insurance Companies

When taking out insurance, the belief is that, as you are paying your monthly premium, you will not need to worry about any of the unforeseen circumstances in which you will need to use your insurance. This is what insurance has been designed to do after all. The truth is that insurance companies will do whatever they can manage to remove themselves from being responsible while ripping off their customers with high rates and any other tactic to take money without giving up anything in return.

Here are a few tactics to be aware of when dealing with your insurance company:

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1. Unnecessary Travel Insurance

Each year, Americans spend just over $1 billion on travel insurance and sometimes, it is even tucked into the final bill for their holiday away. Travel agents push to sell the travel insurance with stories of lost luggage, canceled flights, but what they won’t let you in on is that you might be covered by your homeowner’s insurance on credit cards, or the airline may be responsible as part of their legal obligations. The agent may also tell you about the great promotion happening while having very little real care about the way that your vacation will turn out.

2. Home Insurance: Flood, and Wind

After huge weather catastrophes like hurricanes, homeowners with policies attempted to collect on the damage that was caused by the winds, but the insurance companies worked very hard to pin the damage on the flooding—and flooding isn’t covered by homeowner’s insurance. It has also been said that the employees of the companies are encouraged to underestimate the costs of repair so that the company won’t have to pay what they should be liable for.

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3. Life Insurance Settlements

Life insurance brokers have no incentive to get you the best deal when you decide to sell off your life insurance policy to get some cash in your pockets and may be working to keep the buyer of the policy happy. Even though the broker will have their commission at stake, they are not looking out for you in the end.

4. Car Insurance and Lowball Offers

If your vehicle is considered a total loss, your insurance policy might cover the cash value or even a replacement. The insurance company could try to offer a drastically low amount while understating the car’s actual condition. Additionally, they may try to place the value of the vehicle by using one that is considered comparable, but having a significantly higher amount of miles. Insurance companies would seem to ignore your lower mileage to underestimate the actual value of the vehicle.

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5. Title Insurance Kickbacks

Homeowners are obligated to have title insurance, but when arranging it, it is not advised to listen to the advice that your broker gives you. The broker will often push a deal that will line their own pockets. Don’t feel weird about shopping around for your title insurance, and certainly don’t hesitate to inquire about the previous homeowner’s title insurance company.

6. Health Insurance Billing

One of the leading causes of bankruptcy in the United States is medical bills. Lots of people feel that they have sufficient health insurance, but many times the health service provider and the insurance company will disagree that the claims are valid. The customer gets stuck between it and will end up paying a bill that is much larger than originally thought.

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7. Whole Life Insurance as an “Investment”

Many brokers will push for whole life insurance as it can be seen as an investment. The alternative to this is having term life insurance and putting away your extra cash as an investment. The brokers gain commission for selling these expensive whole life insurance policies. Of course, the more the customer is paying, the more the insurance broker will end up putting into their own pocket at the end of the day. This is their incentive to push for whole life insurance and sell it as a picture of an investment.

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Sasha Brown

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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Featured photo credit: Pexels via pexels.com

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