Slide 1. Introduction.
The class develops the bad practices of car insurance companies and the implications for fleet management.
Slide 2. The bad practices of car insurance companies.
- Car insurance.
Not all insurance companies use bad practices to confuse policyholders, but it is important to know how they can “mislead” us or tell us half-truths. This will help us avoid any unpleasant surprises with our policy.
For example, unclear coverage, lower than expected compensation or repairs, unexpected premium increases, etc. According to the Spanish Organization of Consumers and Users, thousands of policyholders are victims of certain bad practices that it is important to be aware of and combat. This is not something exclusive to a particular company or type of insurance, but rather situations that, in practice, are clearly unfair to the consumer. Therefore, being well informed is key to knowing how to act and defend your rights.
- Bad practices by insurance companies.
- Don't sign before you know the terms and conditions of the insurance policy.
It is not easy to find out the details of policies and compare what different insurance companies offer, as they usually make you sign a formal application or the specific terms and conditions of the contract in order to access the general terms and conditions, where most of the information is contained.
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- Check carefully which policies you are taking out.
Sometimes, companies recommend taking out unnecessary policies or coverage that cover remote risks, leaving out more common ones.
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- Misleading information.
Policies are complex, and sometimes companies confuse customers with unclear coverage or by not being completely transparent.
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- Misinterpretation of policy language.
Insurance policies are known for their technical jargon, which can be difficult for non-experts to understand. Some companies intentionally misinterpret policy terms to reduce or deny claims.
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- Negotiation tactics.
Insurers negotiate aggressively, making very low initial offers so that the insured will accept them quickly.
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- They use high-pressure tactics to reach an agreement quickly.
Insurance companies may pressure policyholders to settle claims quickly, often emphasizing the uncertainty or protracted nature of a dispute. As a result, policyholders may end up accepting inadequate settlements that do not fully cover their losses.
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- Requiring unnecessary documentation.
Some companies may require policyholders to submit excessive documentation, creating unnecessary obstacles and delays. This tactic is particularly common in health and disability claims, where insurers may repeatedly request additional medical records.
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- Modifications without consent.
Insurers make changes to the policy that are detrimental to the customer without their approval.
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- Modify the policy.
They do not facilitate minor changes to insurance policies, such as increasing the capital for a risk, adding a beneficiary, or adding new vehicles. Often, instead of maintaining the conditions and making only the requested change, they make you sign a new policy, which sometimes even worsens your contract.
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- Reject claims without a valid reason.
Sometimes, insurance companies reject claims without giving a reasonable explanation. As a result, policyholders face long and frustrating appeal processes.
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- Failing to properly investigate complaints.
By law, insurers are required to thoroughly investigate every claim. However, some companies may conduct minimal or biased investigations to justify rejecting claims. For example, the company may send an unqualified expert to deliberately underestimate the damage.
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- Hiding critical information from policyholders.
Sometimes, insurers hide important information about coverage or the claims process, making it difficult for policyholders to obtain the compensation to which they are entitled.
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- Citing exclusions that do not apply to the claim.
Insurers may attempt to deny claims by citing exclusions that do not apply to the situation or by broadening the terms of the policy to cover exclusions that were not initially intended.
For example, insurance companies sometimes cite “act of God” clauses or outdated exclusions to deny claims after natural disasters.
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- Blaming policyholders for the loss.
Insurers often try to blame policyholders to avoid paying claims, alleging that their negligence contributed to the loss. For example, in auto insurance, they may claim that the policyholder was partially at fault for the accident.
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- Problems accessing compensation.
When a claim occurs, everything that seemed so easy before becomes a problem: they withhold compensation and make it difficult to access it.
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- Delays in paying claims.
Delaying the processing of claims can be a deliberate strategy by insurers to avoid making timely payments to policyholders. This tactic can be especially stressful if you are relying on a settlement to pay for medical expenses or property repairs.
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- Unjustified denial.
They reject legitimate claims without a valid reason or refuse to investigate them thoroughly.
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- In the event of accidents with injuries.
Sometimes, some insurers try to delay the rehabilitation process.
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- Expert report.
The expert's report with the compensation proposal is sent to the company, without the insured receiving a copy with the information. Always ask the expert for a copy.
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- Less money than expected.
They undervalue the damage and offer you compensation: you get paid quickly, but less than you are entitled to.
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- Undervalued repairs.
They repair parts instead of replacing them and impose fees on repair shops.
They do not respect the labor rates of each repair shop and impose their own, labeling the repair shop as “problematic” if it files a complaint.
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- Comprehensive car insurance.
If you are involved in an accident, they repair the damage but present it as your own damage. Even if it is proven that the other car was at fault, the case is not reclassified and the result is that the innocent insured party finds themselves with an increase in their premium because they apply a bonus-malus system or have to pay the excess.
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- Total losses.
It is common for cars to be valued according to tables that do not correspond to market value and do not take into account other determining variables in the valuation, which in many cases results in losses of more than 40%.
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- Don't let them reduce the compensation you are entitled to.
The Organization of Consumers and Users points out that, in car insurance, it is common for the insurance company to reduce the compensation and offer less than the cost of repairing or buying another car similar to the damaged one in the event of an accident in which the other driver is at fault.
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- If your premium increases, make sure the notice periods are complied with.
Another bad practice is for the insurance company to give less than two months' notice of a premium increase, so that you do not have time to take action and the insurance is automatically renewed.
Companies must inform the insured party at least two months in advance of the expiry date or any changes.
- Implications for fleet management.
The main consequence of poor practices by insurance companies is that we will receive less compensation than we are entitled to, or none at all. The time spent on appeals and claims, and the time spent on expert assessments and vehicle repairs during which the vehicle cannot be used to provide the service, are all inconveniences and damages for the fleet.
To avoid bad practices by insurance companies, it is recommended that the following measures be implemented.
1. Research the insurance company.
Before taking out fleet insurance, it is advisable to obtain references or information about the insurance company. Sources include: searching the Internet for reviews of the insurance company, your own experience with that insurance company, the opinions of other vehicle fleets that work with that insurance company, or the insurance company's economic and financial information.
2. Change the insurance company.
If the insurance company engages in malpractice, it is recommended that you change insurance companies, as this will be more beneficial for our fleet.
3. Understand the terms and conditions of the policy before signing.
It is very important to always read everything carefully before signing, paying special attention to the fine print.
4. Document everything.
Keep records of all communications with the insurance company, especially emails, letters, documents, brochures, quotes, etc.
5. Reasoned response to the refusal of compensation.
It is very important that the insurance company provides a reasoned response when refusing to grant compensation, for possible claims.
6. Deal directly with the insurance company.
Fleet insurance covers many vehicles and is expensive. Negotiate directly with the insurer, don't use intermediaries, because it will work out cheaper for you.
7. Expert advice.
If you have any questions, consult an insurance expert. Large fleets usually have employees who are experts in insurance management, but small fleets do not usually have them.
8. Document the accident or incident.
You must obtain evidence of the accident or incident, such as the police report, photos, videos, location, date, people involved, etc. The more evidence, the better.
9. Driver training.
Drivers must be trained on how to act in the event of an accident or incident, such as how to obtain evidence, report it to the fleet manager, etc.
10. Number of quotes.
It is recommended that you request quotes from at least three insurers to compare prices and coverage, as there may be significant differences.
Be wary of low prices that are well below market value, as they probably hide bad practices.
11. Keep all repair invoices and quotes.
Keep all invoices and repair estimates from the repair shop, as well as all written reports from professionals who assess the damage to the vehicle. Always ask your insurance company for a copy of the expert's report.
Slide 3. Thank you for your time.
The class has developed the bad practices of car insurance companies and the implications for fleet management, see you soon.
