Consumption and Real Estate
Does my old insurance company have the right to bill me AFTER my policy expires?
Question : Does my old insurance company have the right to bill me AFTER my policy expires?
My homeowner’s insurance policy expired on March 1, 2008. After comparing rates I decide to go with another insurance company. I explained my situation with my former agent prior to the expiration date. Now my old insurance company wants to charge TWO MONTHS (through the end of May) of additional insurance which I did not agree to pay. They claim that I should have FAXed to my agent a formal letter stating that I was going with another insurance company. They are now demanding to see my current insurance declaration page to determine exactly when my present insurance became effective. They also threatening to send my bill to a collections company.
Why should I agree to this nonsense? They raised their rates and I went with another company. Why should I provide any information to my former insurance company? Insurance is not mandatory in life. It is only my business from who and when I purchase insurance.
Am I right or wrong? What would you do?
The term of my old policy was March 1, 2007 to March 1, 2008. I paid 100% of this amount. The question is for additional charges AFTER March 1, 2008.
What would be the worst thing that could happen if I tell them to take a hike?
1) I own my house – no mortgage here so it is in my right to decide whether or not I want insurance
2) My declaration page shows that the new coverage went into effect on March 14th.
3) If I faxed this page then I WOULD have to pay.
4) It is still none of their business.
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Best answer:
Answer by educated guess
You owe for the full term length of the policy.
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#2 written by duffmanasu 1 year ago
I understand your frustration, but you should be upset with your agent moreso than with the company. If you knew that you wanted the policy to cancel at renewal, and you notified your agent of this, the agent should either have submitted the cancellation request on your behalf or should have notified you that you needed to provide a written notice of intent to cancel. The company was not properly notified, so they extended coverage until May and now feel entitled to the money.
Get the Certificate of Insurance from your new company, give it to your old agent and tell him/her to fix it because he wronged you.
You are right to be upset, but be upset with the agent. He’s (she’s) the liason between you and the company and should have properly notified you of any necessary steps to set up your policy to cancel upon renewal.
I’m an agent, and I still blame the agent for this mess.
Edit:
To answer your additional questions:
What’s the worst that can happen: They send you to collections and blemish your credit.
Your new coverage started March 14th, so if you faxed that in your old company would most likely charge you for premium from March 1st to March 14th. They would do this because they wouldn’t want to retroactively assign you a gap in coverage. If they got prior notice of the cancellation (which thanks to your agent, they didn’t get) then they wouldn’t care if you cancelled and had no coverage. But they won’t want to go back in time and give you a gap because you know you didn’t have a claim.
It is their business because you’re asking them not to charge you for coverage they technically provided you with. Trust me, I empathize with you, but if you don’t want them to charge you for coverage through May, make your old agent fix the mess by taking the blame or give them the evidence that you got new insurance.
They never got notice that you wanted to cancel your policy, so they covered your home until May before cancelling you for nonpayment. If you’d had a fire, they would have covered you. You do owe them this money unless you can get them to agree to retroactively cancel the policy to an earlier date.
Make the agent admit his mistake, and tell the insurance company it was his fault, that you told him you wanted to policy to cancel at renewal. Maybe they’ll just let the whole thing go. Otherwise, jump through their hoops or get sent to collections. Sorry.
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#3 written by Barry auh2o 1 year ago
They are correct.,
In many states, property or casualty insurance cannot be cancelled by the ins co unless you submit a letter explaining your intent to not renew. That is state law. They did not hear from you, they renewed it, and now you owe them 2 months premium.
Your choice is simple, pay the bill or deal with the collection agency.
Did your agent not tell you this, or did you just think it was ridiculous and decide not to do it? -
#4 written by John D 1 year ago
Its not only your business to have insurance if you have a mortgage on the house. You can choose to not have insurance on a house if you do not have a loan against it.
Under most state law (probably all) an insurance company cannot immediately cancel your policy for non payment. Therefore not paying your bill does not mean your policy is canceled. You must provide written notice that you want a policy canceled. If you sent an email you could easily prove that you canceled.
If you insist on calling an agent to cancel then you should have the agent send you email as proof that he canceled the policy. If you don’t get that email in a day you need to keep bugging your agent until you get it.
Sounds to me like you don’t have proof that you got new insurance on March 1st or you wouldn’t even be writing. So you probably failed to uphold the contract with your mortgage lender as well.
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#6 written by Jonathan S. Carroll, ASLI 1 year ago
I am a licensed insurance agent.
You are right to be upset, stuff like this can be frustrating.
If your original agent did not provide them with the cancellation notice, then it is his fault, especially if you directly told him that you were not renewing.
The reason they want to see the new insurance, is because, once they issue a policy, they owe you the coverage, even if you didn’t pay them. So, in their minds they have provided coverage for you, for the past 2 months. They want the premium for the coverage they have provided. If you show them you had coverage elsewhere, then they can cancel the coverage that existed, without fear that it will come back to bite them.
So, just fax them the dec page showing the new insurance, and they will delete the other coverage and the bill.
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Some insurance companies have will not cancel your insurance unless you write them a written request to do so.
However, the only time that they will charge for an earned premium is if your policy was on a monthly billing plan. In that case, the policy will cancel with an earned premium (amount due for time being insured).
If you give them your declaration policy they will go back to 03/14/08 and cancel since thats when your new policy started.
Not sure what company you are with, but unless it was a monthly plan, they should not collect anything extra.