Monday, October 11, 2010

12 WAYS TO REDUCE INSURANCE COST


Have you ever wondered how to cut down what you pay as premium to insurers every year? Or maybe you have the thought of paying less premium without cancelling your policies? Do you want me to show you ways to beat your insurers to their game and get more for less? Accountants talk about minimizing costs and maximizing profits, do you know that you can actually lower your insurance cost by over 50% and in turn raise you benefit to 50%+ too?  Do you want to apply this to your insurance cover? If your answer yes, then this blog is written for you! Now that you are excited - hopefully, I'm going to share some best-kept secrets with you that will blow your mind and make your insurance officer look like a clown! That's it, like a clown - the tips are as follows:


  • Negotiate! Negotiate!! Negotiate!!!
  • Get variety of quotes
  • Combine, Split or reduce your cover
  • Reduce the occurrence of a loss
  • Ask for Fire Extinguisher Appliance (FEA) Discount
  • Ask for First Loss Discount
  • Ask for Stock Declaration Discount
  • Ask for Group/Fleet Discount
  • Ask for increased voluntary excess (deductibles)
  • Ask for No claim discount (NCD)
  • Ask for Long Term Agreement (LTA) Discount
  • Contract a broker

1. Negotiate: learn the skill of negotiation or employ a broker to do it for you. If you are not so familiar with the terms of insurance to aid your negotiation, please contract a broker to do it for you...they are professionals in the business and the secret is that you are not going to pay them, the insurer will!

2. Get variety of quotes: this point is somehow related to the first on in that you don't have to do it yourself...get a broker to do it for you. But if you are less busy, go for it!

3. Combine, Split or reduce your cover: don't embark on double insurance especially for indemnity policies because during claim you will not get more than the value of your loss. So the best thing to do is to eliminate some policies you have already specifically covered e.g. do not cover your jewelry in your householder/owner policy when you have already covered it specifically under 'all risk policy.' Combining policies can give rise to package discount, for instance if you as a small scale entrepreneur or even large scale player take up a combined industrial all risk policy or packaged policy which as the case maybe embraces several other insurance policies which will include, fire, burglary, money, accident policies, public liability, motor, etc at the end of the day all the combination of the policies will give you the advantage of getting either a package discount of 10% or more from the insurer (the depends on the insurer.) Furthermore, some policies are better off alone, so in that case such should be split instead of having a single rate for such.



I'll share the secrets with you soon. Watch out.

Friday, October 8, 2010

Is Insurance an Expense of an Income?

When you hear insurance, what exactly cross your mind? Do you think expense? But do you know that insurance can an income to you? Shocked to hear that? Don't be, an insurance policy that you take can help protect your asset from loss believe it or not. Let's look at this scenario, you bought a car for a Fifteen thousand dollars ($15,000.00) and insured it with an embarrassing amount of Seven Hundred and Fifty dollars ($750.00)!  However, it happened that robbers stole the car while packed in you garage, then what do you do? Simple, call your insurance company and report the claim, with full proof and documentation. I bet you if you deal with the right insurance company, you'll be bought another car! No strings attached, no hassles, no excuses. The looking at it well you have another brand new car to replace the lost one. Get an INSURANCE POLICY TODAY!

Thursday, September 30, 2010

WHY INSURANCE COMPANIES DON'T PAY CLAIMS (1)

One burning issue in the mind of an average person in this part of the world when it comes to insurance products purchase is: “Will the insurance company pay me when I have a claim?” This question is as old as insurance itself. I recall instances when I have to talk with people about insurance and the need to insure, the response I get from some of them is the same as above. Many have tagged insurance companies as fraudsters! This blog is written to correct this notion and hopefully clear all doubts.

I am going to take 5 reasons in this part and conclude with the remaining 5 reasons in the second part.

The following are the first 5 reasons why your claim will not be settled:

1. Unpaid/Unremitted premium
2. Fraudulent Claim
3. Incomplete Documentation
4. Insurable Interest Issues
5. Fake Insurance Cover

Unpaid / Unremitted Premium: according to the principle of insurance which is also true in the principle of contracts, premium (which is consideration in the law of contract) must be paid in advance for the contract of insurance to be valid. This is the most important aspect of an insurance cover, without which there is no cover – NO PREMIUM, NO COVER! At times agents, after taking up a policy on someone’s behalf might fail to remit the premium to the insurance company before a loss. However, when such a loss thus occur, the first thing an insurance company will check is the premium status of the policy. If the premium had been settled before the claim, the claim stands a high chance of being paid all other things being equal. However, if the premium was not paid before the loss, repudiation (rejection, refusal…) is the remedy. You may ask: How do I avoid this? I’ll tell you. To avoid finding yourself in this kind of embarrassing situation, pay your premium immediately you purchase the policy or pay a deposit premium instantly (in case of payment in installments)  and followed by the balance payment. Not only that, if you bought the policy through an agent, be deliberate, issue your premium cheque in the name of the insurance company on your insurance paper and not the agent’s name.

Fraudulent Claim: insurance is taken for an unforeseeable occurrence i.e. the event, occurrence, loss or outcome must be probable (under probability). If a person for instance, take up a fire insurance and decides to set his house on fire, it's a criminal act called arson! Or wilfully damage his car(in the case of motor insurance) in order to come for a claim - it is fraud! When an insurance company is able to trace a claim to fraud, the claim will be repudiated automatically. I recall a recent case with one of our clients. This man reported that his car was engulfed in flames from his engine while in motion, which according to him resulted in the total loss of the vehicle on the highway. After documentation the office sent me out to inspect the burnt vehicle. Armed with my camera, I set out on what eventually turned out to be a wild goose chase. What happened was that, after combing the area alleged to be the spot of the accident without success, I decided to ask some policemen in that area. Surprisingly, they told me that no such accident occurred in that area at the time I gave them. Conclusion is that there was no such accident to the vehicle, the insured reported a fraudulent claim which led to the claim being repudiated.

Incomplete Documentation: if you are filling in a claim be ready to turn in all documents. For example, proof of ownership, photographs, purchase receipt/invoice, estimate of repairs etc in the case of motor insurance claim. And in the case of personal accident claim medical report, receipt of payments etc are necessary. I will deal with this subject in my forthcoming blog: Documents needed that will make your claims valid. Watch out! Make sure your documents are in order and complete without that your claim will be delayed unnecessarily because insurance is based on documentary evidence. So take my advice, tender every document as evidence, be patient. Another client of mine reporting a Workmen’s Compensation Claim was told to supply the medical report, receipts and every other document to show that there was an accident on one of his staff. What he sent was just a picture of the victim on a hospital bed, when we ask for the other documents he became furious and said it was rubbish! Till date the claim is still pending, if he decides to tender the documents the claim will be treated further. So document like crazy.
   
To be concluded…