I am currently running another thread regarding the poor record keeping of an insurance company. They are stating a relative of mine failed to make her last insurance payment for her car despite the payment being made. Unfortunately, she paid in cash and can't prove it. Regardless, that is all being discussed in the other thread. The insurance company's calculations on why she is past due involves a pro-rated refund (since she cancelled her insurance before her 6 month policy was up). She was charged a 6 month premium of $1077 for insurance from January 6th to July 6th. She cancelled her insurance on May 21st. They state that they therefore refunded $207 to her. However, I believe she was suppose to be refunded more. Here is what THEY state: $1077 -- 1/6/01 to 7/6/01 renew -311 -- 2/22/01 address change 111 -- 2/22/01 ineligible for multi car discount ----- $877 -- Total term premium from 1/6/01 to 7/6/01 -207 -- 5/21 Cancellation Return Premium ----- $670 -- Total earned premioum from 1/6/01 to 5/21/01 -200 -- 12/18 payment -159.72 -- 1/15 payment -200 -- 3/9 payment ------- $110.28 -- balance $10 -- billing fees -------- $120.28 due after cancellation for premium from 1/6 to 5/21 Although we are still investigating: 1) Why they claim she paid $159.72 when all her cash payments were $200 (do you really see anyone dropping $159.72 in a drop box)? 2) Why she was charged $1077 for her 2001 policy when her original contract from 1999 stated $979 was what her 6 month premium was (despite not moving, having any tickets, changing coverage, etc) even though the company's own admission that the 1999 contract (which states right on it that it expires 7/6/99) continued to renew as she continued to pay and despite no paper agreement showing she agreed to $1077. Regardless, I am asking your help for the pro-rated part. Here are my calculations: 1/6/01 to 7/6/01 = 181 days $877 / 181 = $4.85 per day 5/22/01 to 7/6/01 = 45 days 45 days * $4.85 = $218.25 (vs. the $207 credit) However, this is assuming the premium was $877 for the ENTIRE 6 months. It was not. Remember, from 1/6 to 2/22, it was $1077. I believe, even though she cancelled long after 2/22 and made payments after that point, since she was being charged in 6 month chunks, her refund should have been based on the $1077 charge from 1/6 to 2/21 and then the $877 charge from 2/22 to 7/6 vs. baseing the refund just on the $877 charge from 1/6 to 7/6 which is what I think they tried to do. So: 1/6/01 to 2/21/01 = 46 days $1077 / 181 = $5.95 per day 46 / 181 = 25% meaning for 25% of her 6 month policy, she was charged: 5.95 - 4.85 = $1.10 more per day. Since she cancelled with 45 days left on her policy, 25% of that should have been pro-rated with the additional $1.10. 45 * .25 = 11 days 11 days * 1.10 = $12.10 For a grand credit of: $218.25 + $12.10 = $230.35 For a difference of: $230.35 - $207 = $23.35. Total debt of $120.28 - $23.35 = $96.96. Now, if we can prove she suppose to be charged $979, not $1077, this creates a $98 credit bringing the total debt down to $0 (or about a $1 credit). do my calculations seem accurate??
I think you've got too many things going on here. First and foremost, if her policy is for 6 months and begins on 1/6 it would run through 7/5 NOT 7/6. All that matters in your problem here is the following: 1. The original premium amount. 2. The amount of days she was covered by the original premium. 3. The new premium amount. 4. The amount of days she was covered the by the new premium. 5. The date she canceled. 6. The total amount she paid regardless of when. What *is* the total amount she paid? The dollar amount wasn't clear from your post. Here's what I think: 1. I start a policy covering 1/6/2003 - 7/5/2003 for $1,077. 2. I make three payments of $200 on or before 1/31/2003 for a total of $600. 3. On 2/22/2003 my profile changes and my premium drops to $877 semi-annually, effective 2/22/2003. 4. I make another payment of $277, because I believe that will pay the bill in full ($600 + $277) since my new premium is $877. 5. I cancel my policy on 5/21/2003 and expect a refund. Please note: The following calculations are rounded up to the nearest cent (248.619 become 248.62, etc). The original $1,077 premium covers 1/6/2003 - 2/21/2003. That's 47 days. Based on the coverage period of 1/6 - 7/5, the daily rate of the original premium is $5.95. The total premium owed for coverage over 1/6 - 2/21 is $279.66 = (($1077/181) * 47). The new $877 premium would have covered 2/22 - 7/6. That's 134 days. Based on the coverage period of 1/6 - 7/5, the daily rate of the new premium is $4.85. But I don't keep the policy for 134 days. I cancel on 5/21. I only have it for 89 days. The total premium due to cover the period spanning 2/22 - 5/21 is $431.23 = (($877/181) * 89). Orig. Premium Due ...... $279.66 1/6 - 2/21 New Premium Due ........ $431.23 2/22 - 5/21 Total Due .............. $710.89 Total Payments ......... $877.00 Balance ............... -$166.11 (Refund Due)
I understand your calculations and they seem to make sense but something just isn't right as I will show you below. I think you've got too many things going on here. First and foremost, if her policy is for 6 months and begins on 1/6 it would run through 7/5 NOT 7/6 Although I understand that 1/6 to 7/6 is 182 days (the difference between the two dates is 181 plus coverage on 1/6 which is 182), the policy was for 1/6 to 7/6. All the information I typed in the original post where I state "Here is what THEY state:" was typed word for word from their reply when I sent an intent to sue letter. They may refer to it as a 6 month premium but it is actually 182 days from 1/6 to 7/6. I just realized though, based on your post, that I must add one day to each calculation (I forgot about coverage on the first day). What *is* the total amount she paid? The dollar amount wasn't clear from your post. According to their records, she paid $200 on 12/18/00, $159.72 on 1/15/01, and $200 on 3/9/01 or $559.72 total. All payments went toward her 1/6 to 7/6 policy. However, based on their records (and what we can prove by way of receipts), she still owes $120.28. She paid this BUT they claim she did not. Therefore, I am trying to find some other flaw in their calculations that could make up for the $120.28 that they allege she did not pay. I am trying to do this by double checking the pro-rated refund they gave her. According to your calculations though, you state the total amount due was $710.89. If you add the $10 for billing fees I included in the original post, that would make the total amount due $720.89. If you subtract what she paid ($559.72), that means she is past due $161.17. This is not correct. She is past due only $120.28 (as shown in the original post). Unless, of course, I am missing something in your calculations. I just need to know whether or not my calculations for the pro-rated refund she was suppose to receive are accurate because according to my calculations, she was suppose to be refunded more than $207.
Updated Calculations with one day added 1/6/01 to 7/6/01 = 182 days $877 / 182 = $4.82 per day 5/22/01 to 7/6/01 = 46 days 46 days * $4.82 = $221.72 (vs. the $207 credit) ----------- 1/6/01 to 2/21/01 = 47 days $1077 / 182 = $5.92 per day 46 / 182 = 25% meaning for 25% of her 6 month policy, she was charged: 5.92 - 4.82 = $1.10 more per day. Since she cancelled with 46 days left on her policy, 25% of that should have been pro-rated with the additional $1.10. 46 * .25 = 11.5 days (I'll just round down) 11 days * 1.10 = $12.10 For a grand credit of: $221.72 + $12.10 = $233.82 For a difference of: $233.82 - $207 = $26.82. Total debt of $120.28 - $26.82 = $93.46. Now, if we can prove she suppose to be charged $979, not $1077, this creates a $98 credit bringing the total debt down to $0 (or about a $5 credit).
Just in case I didn't make it clear... The bold stuff below is set in stone....this is exactly what the insurance company, the insurance agent, and the collection agency have forwarded to my sister to account for the $120.28 debt they are listing on her credit report. $1077 -- 1/6/01 to 7/6/01 renew -311 -- 2/22/01 address change 111 -- 2/22/01 ineligible for multi car discount ----- $877 -- Total term premium from 1/6/01 to 7/6/01 -207 -- 5/21 Cancellation Return Premium ----- $670 -- Total earned premioum from 1/6/01 to 5/21/01 -200 -- 12/18 payment -159.72 -- 1/15 payment -200 -- 3/9 payment ------- $110.28 -- balance $10 -- billing fees -------- $120.28 due after cancellation for premium from 1/6 to 5/21 Since we can't prove she made her 5/21 payment, the only other things we can fight are the $1077 initial charge and the $207 pro-rated refund along with the $159.72 payment (instead of being credited the $200 she always paid). However, at this point, I am just trying to double check the $207 refund.
I think you've misunderstood me with regard to the 1/6 - 7/5 issue. I just don't believe they would cover you for 1/6- 7/6. Coverage would have to be through the day BEFORE, ie 7/5. For instance, my current insurance coverage is from 12/12/03 through 6/12/04, but my policy cancels at 12 AM 6/12/04 which really means that I am only covered and CHARGED for coverage spanning 12/12/03 through 6/11/04. Are you following me? This distinction really matters when calculating the daily rate. Your coverage span is 181 days, not 182.
Is it possible that you've overlooked some other miscellaneous fee that could have reduced her $200 payment to $159.XX? Such as a NSF, late fee, etc?
Okay...I see what you are saying... However, I personally have AAA and Progressive. Both have similar policy terms (ie. 10/18/03 to 4/18/04 and 9/15/03 to 3/15/04). I contacted both and both said I am covered until mid-night of 4/18/04 and 3/15/04 so I think coverage would be provided on 7/6. At least, that is what they told me. They said I would be covered the entire day of the last day listed on the policy and if I wanted to renew, I would have to pay at that time. However, 1 day won't make a huge difference either way. How would you calculate the pro-rated refund? They gave her a $207 pro-rated refund. I come up with $233.82. What do you get?
No, the actual payment they claim she made in cash was $159.72. If it was reduced by a fee, it would have been reflected in that calculation the insurance company gave to us. They would have still however, made out a receipt for $200. They state she actually paid $159.72 in cash in the drop box. I requested their records and what they have is the following. One receipt dated 1/15/01 with her name, $200, and a signature. However, they then have a big "X" through it and made out another one dated 1/15/01...again with her name, date of 1/15/01, but this time it says $159.72 and has her policy number it and is also signed. It appears to me like the women making out the receipt got side tracked in the middle and started a new one and then, when she did, she got her payment mixed up with somebody elses and credited her with only $159.72. They also forwarded my sister a check on that date from the Citizen's bank account which shows only $159.72 (when they would get cash payments, they would write themselves a check for some reason in that amount). Even if they only wrote themselves a check for $159.72, that DOESN'T mean she only paid $159.72. It is obvious that the lady had some reason to fill out one receipt with $200 on it and sign it...especially considering my sister claims she never made a $159.72 payment and it just wouldn't make sense to put $159.72 in drop box...especially when every payment from 1/6/00 to 3/9/01 was for $200....this is 7 payments....and then one, right in the middle, out of nowhere, is for $159.72 on 1/15/01. Obviously, this wasn't for NSF because it was cash and the second receipt was made out on the same day so they wouldn't have been able to know that anyway. I really doubt the lady would have made out a receipt for $200 and signed it to all of sudden say OOPS...there is only $159.72 here....I mean..come on. It my opinion, that serves more than enough evidence that $200 was the real payment (which is what I will bring up in my complaint with the Insurance Dept). However, what I need to know right now, is whether or not the $207 pro-rated refund they gave her is correct (for 181 or 182 days). I don't think it is.
