Did You Know? Potential Problems Of Having A Bundled Policy
Did You Know? Potential Problems Of Having A Bundled PolicyHaving our car, health, and home insurance with the same provider sounds like a great idea. It saves time when filing a claim; your full record is with the same company, and let’s be honest special prices are available too. Insurance providers love to bundle products, and for a good reason, bundling encourages consumers who do not like a one-stop-shop to buy more.
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What Is Bundled Policy?Bundle policy means you are purchasing multiple insurance policies from a single company. For instance, if you are buying your car, health, and home insurance from the same insurance provider, you will bundle your policy.
ProblemsDoes not meet your needs
Insurance is the one thing that you purchase and hope never to use. Knowing that all your potential issues are taken care of with one company should be compelling, but what happens when that does not suit your needs?
Each time you pay your premium, you’re paying to keep the coverage in place and available, not actually to use it. However, because you are not using it, you will not get feedback about the quality of the coverage you’re buying and how it fits your changing needs. You will not purchase supplemental coverage or receive an entirely different policy.
Instead, the feedback comes when you submit a claim. At that point, it will be too late to fix any problems that may exist in your coverage. So if you have bought a bundled policy based on its price and convenience and not because it met your specific coverage needs, you could be in real trouble if disaster strikes.
Stuck with the same insurance provider
Regardless of the discounts and convenience bundling insurance policies might bring, there can be disadvantages to this model. The major one being some insurers might make it difficult for you to change insurance companies. Nobody wants to lose a big client. A couple of years down the road, you might realize that you are stuck with a cover that only prompted savings for at least two years but suddenly increased after some time.
When you do decide you want to try a different insurance provider, they make it next to impossible for you, citing contracts and other legalities. It leaves you with no choice but to stay on as a customer.
It is why it is better to always keep your options open, besides having the convenience of having all your policies with just one company might make you miss other discounts, promotions or special prices with other companies.
SolutionsOther Ways to Save on Insurance Premiums
The main reason why consumers go for bundling policies is so that they can save money. Well, bundling policies isn’t the only way to save money on monthly insurance premiums. It may not be the best way, depending on individual needs. You can also save money by:
Buying only what you need
It is essential to know that insurance is not a one size fits all product. If your policy is too small, you could have problems replacing your property or if it’s big you could pay a lot every month. So you need to be smart in determining whether you need insurance. Another thing is the cost if your property cost a third getting two-thirds cover means you are paying too much. You are paying for insurance you couldn’t likely ever use.
Improve your property
Cars with updated safety features cost less to insure for a straightforward reason, “You are less likely to be in an accident that requires a claim.” The same holds for your house or any other valuable property. Even though you are insured, better care of your valuables helps you save money.
What is a stand alone policy?It includes the cost of repair for your car in the event of an accident or any unforeseen mishap. These types of policies are also referred to as Stand-alone Own Damage(OD) policies. On the other hand, without the own damage part of the policy, the policy will only cover what the insured owes to a third party.
What is the meaning of TP in insurance?Among the two types of car insurance in India, the third-party (TP) car cover serves to protect the insured from claims arising from a third party, when the insured person’s vehicle is at fault.
What is the meaning of OD and TP in insurance?A comprehensive insurance cover for a vehicle offers complete safety against the loss and damage to your vehicle i.s. own damage (OD) and other vehicles and properties i.e. third party liability (TP).
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Originally published Jun 19, 2019 11:07:04 AM, updated Jul 20, 2022