Although there are many very honest and excellent insurance companies and agents, there are also some who want to take away as much of your money as possible whilst giving you little or no real cover. It is important that you know about some of the various insurance scams and how to avoid them, as this will save you money and also give you the peace of mind that you are covered should anything happen and you need to claim.

Misleading policies

Perhaps the biggest insurance scam to avoid is being suckered into buying a policy that you don't really want or that does not give you what you have asked for. This sort of scam is often the hardest to avoid, because it is not just a case of people tricking you on purpose. You can also be the victim of insurance sales people who simply don't listen to your needs and don't have the right expertise to help you. If you are offered a policy but it seems confusing or not what you want, then don't sign for it.

Claims denied

One problem that people find when they use a poor insurance company is that when they need to claim back off their insurance their claim is denied. Some insurance companies simply don't have the money to pay out your claim, and hope that you will never need to claim for such large amounts. Before buying any type of insurance make sure that you research the insurer and confirm that they can and will pay out for eligible claims.

Unnecessary clauses

One problem that many people have is that they end up with an insurance policy that gives them cover for things that they have no use for. For example, you might get some travel insurance but end up paying ?15 more for it because it includes extreme sports cover. Many insurers use the technique of including everything that you may or may not need and hope that you won't query these items. Make sure that before you sign any agreement you look at what you are covered for, and if there are things you know that you don't need then get them removed. This may help you get a lower price for your insurance.

Too much small print

Another way that insurers can trick you is by putting the important issues of your insurance in the smallest print possible. These insurers hope that you will not read this small print or will overlook something that is making them extra money or leaving you without cover. Again, check all of the clauses in the contract, especially the small print. If there is anything you don't like then get it changed or do not sign.

Insurance you don't know about

One of the most frequently used ploys is to sell you insurance that you don't even know you are paying for. This is usually done by lending institutions that include payment protection insurance in your loan payments without your explicit knowledge, meaning that you pay for insurance that you might not want or even need. If you get a loan make sure you are not paying extra for insurance that you don't need. If you read through things carefully and seek good independent advice then you won't be caught out by these insurance scams.