In March of 2005, my girlfriend received a letter from her auto insurance company asking her to renew her one-year policy. The company wanted her to pay a buttload of cash up front. She refused (i.e. never called back), and promptly switched to another insurance carrier. Fast-forward to the next correspondence in about July. She received a phone call from a CA asking for a balance upwards of $500. She subsequently never answered phone calls from that area code. She has now received a couple letters from the CA, Joseph, Mann & Creed, requesting payment of the "debt." They cite that she was "aware of Electric Insurance's invoicing terms at the time of contracting for their services." As far as I can recall, if you don't pay your insurance premiums, your policy gets canceled and that's it. Should we start by sending the first DV letter from the letters section?
It is generally better to deal with things promptly rather than ignore them. This could have been straightened out originally by a simple call to her old insurance company notifying them that she had obtained insurance with a new carrier, and cancelling the policy. She likely would have even gotten a pro-rated refund based on when the new policy kicked in. Any comments from insurance brokers on how to handle this at this point?
There couldn't have been a refund, because she was at the end of her policy. She did not agree to renew the policy. Therefore she gave up her coverage, er go payment of the premium.
Did the insurance company send her a notice that the policy was being terminated for non-payment? Did she contact the company, or the agent, or receive any calls from either, and indicate she had switched coverage to a different carrier? Since insurance is generally paid in advance, if she started coverage with the new carrier before the paid coverage with the old carrier ended, there might have been a pro-rated portion of the prepaid premium refundable. Notify the insurance company in writing that you terminated your coverage with them and switched coverage to a different insurer. Indicate on what date your new coverage started. (Presumably this is on or before the date paid thru of the old policy.) Request that they recall the account from the CA, since you had coverage elsewhere, and you had not renewed your policy with them. CRRR, of course. Dispute with the CA, indicating that you did not renew any policy with the insurer, since you had switched to a different insurer. File a complaint with your state insurance commissioner, against both the insurance company, and this CA.
Yes, she received notice that the policy was being terminated. She did NOT contact the company or agent, nor did she receive any calls from either. The next thing she received was a phone call from the CA. She DID get a new policy before the old policy ended. But I don't think that a refund would apply in this situation, since there was no notification of the cancelation of the policy. We will notify the insurance company, the CA, and file a complaint with the state. What do you suggest for letters to write to each of them?
Lay out the facts: 1) Due to increased renewal terms from this insurer, she obtained coverage with a different carrier, that went into effect on xx/xx/xx. 2) She chose not to renew the existing policy, due to the increase in premiums, since she had obtained coverage with a new insurer. 3) The old carrier is attempting to collect on a new policy that was not in fact renewed, for coverage she did not need or want, and that was redundant to coverage with her new carrier she already had. Ask for what you want: that the old insurer recall this invalid collection account, remove any associated negative collection reporting from her credit report, and close the policy/account as of xx/xx/xx. Also ask for return of any refundable pre-paid premium for the period of overlapping coverage. (Do not assume no premium is refundable. Insurance matters are often corrected after the fact, in good faith, to handle changes in coverage, changes in costs, transitions in coverage, etc. Let them change their stance from "We automatically renewed your policy at our inflated rates since we knew you had no choice, so since you had no other coverage you have to pay us to be legal", to "What? She wants money back?" If you don't ask, you don't get.) Add "CC: <state insurance commissioner>" on your letters to the CA and insurance company. Add "This alleged debt is disputed in its entirety" on the top of your letter to the CA. Include copies of your insurance company and CA letters in your complaint to your state insurance commissioner. Outline the fact that you have already disputed this erroneous billing, and they have not corrected it. Send copy of insurance company letter to your former agent, with a cover letter requesting that he straighten this mess out. He carries "errors and omissions insurance", and your letter to him is a "courtesy", since you know he would want to do the right thing. Send all letters CRRR.
