Insurance: clearing up frequently asked questions and misconceptions

One of our priorities at The Shepherd Group is putting people in the know so they can make informed decisions. So we thought we would put together a guide to the most frequent questions and misconceptions customers have about their insurance.

Monthly payments

Most of our customers pay for their insurance through monthly plans. The single greatest challenge we experience is explaining why they must make two payments when they first initiate a policy. This is because you are paying a month in advance. For example, if your policy is effective starting May 31, your first payment covers June and July.

Customers think when their policy expires in May, they stop paying in May. In reality, they stop paying in March because they have already paid in advance. Your next April payment will in fact be your renewal payment to start the next year.

Every person has different needs and there are other payment options available. It’s possible to pay the entire annual premium in one lump sum, or in three installments as part of a prepaid plan. Be sure to tell your broker what works best for you.

Policy changes

When making changes to their policy in between renewals, some customers get shock from the premium increase. If you’re adding a second vehicle to your policy, the premium will of course increase, but that increase will be spread over however many payments you have remaining.

That is, it’s not spread over 12 monthly payments as it would be if you were adding the vehicle on the day the policy renews. In other words, even if you’re expecting the increase, it may be larger than you were budgeting for.

This effect can be particularly drastic if you just bought a new car and have just one payment remaining before renewal. To avoid NSF fees and the hassles that come with bounced cheques, consider scheduling major purchases and policy changes around your policy renewal date.

Flexible payment options

Customers are understandably sensitive to price increases and we sympathize. They may also not have easily accessible funds to make payments at the drop of the hat.

For example, one of our customer’s payment is due on the 15th of each month, but he is paid on the 16th. When the 16th lands on a weekend, he is not paid until Monday the 18th. Last time this happened, he had difficulty making his payment. The workaround is simply to move his payment date to after his pay day.

Remember, you cannot skip a monthly payment any time you’re short on cash and just bundle it with the next one. Therefore you should always ask your broker for reasonable accommodation if you anticipate difficulty making your payment on a certain date. A broker with integrity who’s truly on your side will be open to arranging a workable compromise.

Final thoughts

We understand you have a lot going on in your life and insurance is not your first priority. When you get that second car, new property, or piece of equipment, you need insurance coverage ASAP and you don’t necessarily have time to discuss all the details.

Regardless, we encourage you to speak with your broker to make sure you understand what you’re getting, how much you’re paying, and when payment is due. On our end, we are committed to communicating clearly and transparently to put you in the know about your policy details.

Phone call, email, regular mail – we will use whatever method works best for you to make sure we’re taking great care of you. Just tell us the best way to reach you and we’ll handle the rest.