Common Mistakes when Buying Insurance

Buying insurance can often be intimidating.

There are countless options and types of cover available from many different insurance companies, and making the wrong choice can mean being without critical support in a time of crisis. Mistakes often happen when people are taking out insurance, or can come during the lifetime of any given policy due to simple inattention and mismanagement.

If you are aware of some of the common pitfalls in the insurance purchasing process then you’ll be in a better position to properly cover your risks, and ensure that your policy is in a position to support you when you need it to.

Insurance Pitfall: Only Getting One Quote

One of the biggest issues for people getting insurance (any insurance) is the failure to obtain more than one quote. For many potential policyholders, the insurance purchasing process is a massive headache, one which they want to finish as soon as possible.

So, for these people, as soon as they receive a quote from any underwriter, they are likely to go ahead and purchase a policy.

This is a mistake. Only getting a single quote from a single insurance underwriter means you likely will not be getting the best price, or the best coverage. This issue is often encountered with insurance agents and underwriters in Hong Kong, due to the fact that these providers are limited in the variety of products from competing companies they can offer. Getting multiple different quotes from an insurance agent will likely mean contacting many different agencies.

In contrast to this, working with a broker can mean that you are able to receive a number of different, competing, quotes at a single location. For example, CCW Global is able to provide Health Insurance quotations from more than 10 leading international health Insurance providers – giving you the convenience of comparing the relative strengths and weaknesses of each option in the same manner.

Obtaining more than one quote means that you are able to accurately assess what insurance coverage is going to work both for your coverage needs, and your bank account.

Insurance Pitfall: Incorrect Coverage Amounts

With certain types of insurance, the amount of protection you apply for is very important. Under-insuring or over-insuring your assets can cause issues for a policyholder in a claim situation, so it is critical that you properly value your policies when taking the coverage out.

For example, in Fire Insurance if you insured your property for less than it’s worth then in the event of a claim you will be responsible for covering any excess losses beyond the coverage being supplied by the insurance. This isn’t typically an issue for property owners who have purchased real estate with a mortgage, as the bank will normally require full fire insurance coverage of a property before providing purchase funds. However, if you are self-purchasing a property, or if you are insuring your belongings inside a home with a Contents Insurance Plan, it is important that you accurately value your insurance to ensure that you are not left outside the coverage being offered by the policy should you experience a loss.

Over-insuring your property, or taking out an insurance policy providing coverage in excess of your needs, will mean that you’re paying more for coverage that you cannot, and will not use. This hurts your bank account, and may mean you’re not accurately valuing your assets leaving you exposed in other areas.

Insurance is a delicate balancing act; you want just the right amount of cover to protect you against your risks.

Insurance Pitfall: Not Maintaining Your Policies

Insurance is normally taken out on an annual basis. With the exception of a limited number of short-term, time-specific insurance products, most insurance will be a contract taking place over the course of 12 months. A year is a long time. Situations and Circumstances can change.

A great example of this is with something like Worker’s Comp coverage.

Businesses with Employees’ Compensation Insurance coverage may see a change in their workforce, as new staff are hired or depart from the company. Similarly, workers may get raises over the course of the year. These are all things that should be reported to the insurance company and which may have a material impact on that organization’s EC Insurance protection. Failing to properly administer the policy could see the business run afoul of the local Employees’ Compensation Insurance Ordinance and be without vital cover in the event of an employee suffering a work-related injury, illness, or accident.

But, managing and maintaining your insurance doesn’t necessarily need to be this complicated. Simply renewing your insurance every year is important! At the end of any term of insurance, your coverage will lapse – you must agree to continuing protection, under a new contract, with the insurance company. This new contract may include new coverage conditions, or come for a higher fee, but you will have to formally renew the protection with the underwriter to continue to receive the benefit of any insurance policy.

For things like Car Insurance, renewing your policy will normally be done in conjunction with renewing your vehicle registration, but for other types of insurance, like Office Contents or Home Contents Insurance, it can be easy to overlook the impending expiration of a policy if you are not paying attention.

Waiting Too Long to start planning

Possibly the biggest mistake you can make when taking out insurance is waiting too long. The longer you don’t have the correct coverage is when you’re more at risk. And you can’t get the right protection until you start looking at your options.

For a product like Health Insurance, starting your planning early can mean the difference between having full protection under the policy for any possible medical condition or illness, or having prior illnesses be excluded from coverage because they pre-existed the insurance cover.

The sooner you start your insurance journey, the sooner you’re able to receive the answers and insight you need to make informed decisions about how to protect your life and the people that matter to you.

Hong Kong Insurance From CCW Global

CCW Global is an independent insurance broker headquarter in Hong Kong. Our expert advisors are able to offer quotations and comparisons from a variety of leading Hong Kong and International Insurance companies, to give you a full range of choice when it comes to any policy you are purchasing.

Our in-house claims and administration teams are ideally positioned to assist you over the lifetime of your insurance, and will work with you to overcome any of the common obstacles we encounter with customer’s coverage – giving you the confidence that your plan is always being actively managed to offer you the protection you deserve.

For more information, please arrange a no-cost, no-obligation consultation with an expert advisor today. Contact Us Now!

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