I bet the very first time you realized that it was time to phone for a few insurance quotes, you never once dreamed how complicated and overwhelming insurance plans can be. There could possibly be things you thought your policy insured, but when it was time to claim you realized you were not properly covered. There could be certain variations and exceptions on your policy that you were not aware of – this can easily turn into your worst headache.

Herewith a number of the most frequent insurance policy misunderstandings, thoughts and false ideas explored further:

As my vehicle’s value depreciates each year, my premiums would also be reduced, right? That could sound like a rational conclusion to you, but take into account that vehicles are most times repaired rather than replaced (as far as possible of course!) and regrettably the cost of components, labour etc increases yearly.

If I decide on a certain policy now, my monthly premiums will remain exactly the same year after year, aside from the annual inflation, right? No, not really. Monthly premiums are generally only set for a year. After a year insurance companies would evaluate your claim history of the past year and your premiums might be adjusted accordingly. If you ended up being a high risk customer by claiming a few times in the past year, your premiums will in all likelihood increase. However, if you’ve proven that you are able to maintain a squeaky clean claim record, you may also be rewarded by reduced premiums.

If my insurance policy includes an excess amount, I will only need to pay this excess if the accident was my fault, right? Unfortunately not! An excess amount is usually a voluntary amount – you commit to pay the excess amount regardless of the reason behind the accident or incident. Most insurance companies will attempt to recover the excess amount from the responsible party if the accident was not your fault, but this differs from business to business and can’t always be guaranteed. When obtaining insurance quotes, question the different excess alternatives and also how that would affect your premium.

I have a gear-lock, so I don’t need to take any other precautions, right? Once again, not quite! Most insurance providers won’t approve an insurance policy if there is not another form of security such as an immobilizer or a tracking system. The more safety measures you have in your car, the lower your premiums as you are then regarded as a low risk consumer.

There is no need to see my vehicle before you insure it, right? Some insurance companies would want to examine your car before finalizing your insurance plan. You can meanwhile get a number of insurance quotes, but the insurance would not be activated before this examination. They firstly have to examine if the safety precautions in your vehicle meets their criteria and secondly they have to double check that the car is in the condition you declare it to be in.

Unfortunately there are a lot of chance takers out there- both in the form of dishonest clients and insurance providers wanting to exploit consumers, therefore it’s very important that both sides (the insured and the insurer) take precautions to protect themselves. Never assume, even if you have to ask millions of questions, ensure that you completely understand your insurance plan.

For more information on insurance quotes, got to http://www.afi.co.za