Cancelled Insurance Policy

[cresha270]

What is the name of your state? Florida
After obtaining insurance for my car, the car proceeded to break down and was undrivable. After still paying the insurance premium for several months, the car was sold, the tag and registration turned into the Department of Motor Vehicles and the cancellation information taken to the insurance company. Upon obtaining the insurance, a $250 deposit was required but I didn't receive a policy. Only some payment stubs with the monthly payment amount and initial letter stating that the insurance company's binder was cancelled. I was told to ignore the letter. When I cancelled the insurance in December 2006, I wasn't given any kind of cancellation notice but in the mail a couple days later, I received a letter stating that I hadnt paid my premium. I was told to ignore that letter too. When I asked about the deposit, I was told that I wasn't able to get it back because it was used to get financed or some crap about it not really being a deposit, just a down payment and that I used the policy. I got the policy in May and cancelled in December. She also said that since I was paying on the policy every month instead of one payment for the whole year, that I was also not able to get the deposit back. What is the actual policy on cancelling insurance, especially when a deposit was given?

 

[ecmst12]

What was the total premium for the policy period, and what was the total amount you paid including the deposit?

 

[alnorth]

This isnt like renting an apartment. A "deposit" is really just a large up-front payment on the policy to make sure they have the premium in case you flake out and cancel due to non-payment. The up-front payment gives them the ability to be patient and wait a month before cancelling you. So, there's no refund on a deposit unless its unearned premium.

This should be very easy. Look at the day you started and cancelled, figure out what fraction of a year that is, and multiply that fraction by the total one-year premium to see how much of the premium was earned by the company. Anything you paid more than that should come back. Any finance charges should be ignored, that money is gone for fees. (e.g. 3 dollar fee per month to break it up into monthly payments)

So, for example to make it easy, lets say a full year for you would have cost $1,200, they required a $100 deposit, and payments of $100 per month for the next 11 months. After exactly 7 months you cancelled. If there was an extra fee per month to make it $103/month, ignore that fee. So, in that example, you paid $800 in premium, and the company earned 7/12 of the policy premium. (7/12) * (1200) = $700, which means the company owes $100.

Your situation is obviously different, with different fraction of a year, deposit and monthly payment amounts, etc. but thats how it usually works.

This all assumes the policy doesnt have any language in it that says they keep $x if you cancel.

 

[cresha270]

Ok. I'll accept being called stupid for this but I never actually received any kind of policy in writing. I gave the company $250 for the deposit or whatever and I was paying $75 a month. I never got anything with a total amount, any terms and conditions or anything. All I got was payment coupons and was directed to a website for any questions. And in a twist of fate, my new car was hit by someone with the same insurance. And they have been giving me the hardest time. My car was declared a total loss along with another car that was hit also (my cousin's). The company doesn't return calls, answer inquiries or even speak English as far as I know. I'm really glad I did cancel that insurance.

 

[cresha270]

Oh I forgot. I got the policy in May and cancelled in December.

 

[ecmst12]

Unfortunatly without knowing what the total policy premium was supposed to be, and how long it was supposed to be for, we can't tell you whether you were due a refund or not You paid $850 for 8 months of the policy, but whether that's more or less then you should have paid for 8 months, no way to tell.

 

[alnorth]

After re-reading the OP, I suspect you arent getting anything.

Your lack of a contract in your possession doesnt mean as much in Insurance as it would in other situations, it would just be a really good idea to have so that you know exactly what you are and are not getting for your premium. Insurance is one of the most highly-regulated businesses in the country, and I can pretty much guarantee that some kind of contract (that you could demand to see) containing language that was reviewed and approved by your state with an annual premium exists, unless this insurance company was illegal and not licensed for your state or something bizarre like that.

However, you said that they sent you a "pay or be cancelled" type of notice in the mail, and they told you to not worry about it. They didnt do you any favors, the company probably waited until all the premium you gave them was earned before formally cancelling you. So, going back to my example, lets say you just stopped paying after 7 months. In that case, if the company wants to keep all the money, they send a notice asking for money, wait until that 8th month is finished (so all $800 they received is now earned), then they cancel.

 

[moburkes]

Correct, it is not a deposit. Many people think that it is. It is also not refundable, in the way that many people think that it is. It is a down payment. That simply means that, take the total annual premium minus the down payment. What you have left is your balance due. That balance is generally paid over several months. The insurance company is being nice in allowing you to pay monthly. It can be a pain in the butt for them. If you had paid in full, you would never have received a cancellation notice. WHY did they tell you to ignore the cancellation notice? Had your payment crossed in the mail with the notice? That is the only situation that makes sense. Also, you said that you had access to your policy online. If that's the case, you could have printed your own declarations page. So, the lack of one, isn't a big deal, since you obviously had a policy, or you wouldn't be able to look it up online.

Also, based upon your lack of understanding about how the process works, I can't say that any of what you have described, leads me to believe that your previous insurance company was a bad company. Even in the claims situation, you could simply have a bad adjuster. Ask for a supervisor. Maybe they are disputing the fault of their driver. Who knows. It could be for any number of reasons, why they are taking a long time to settle this.

 

[cresha270]

I received the cancellation notice after I went in to the insurance company and cancelled and showed them that I had turned in the tag for my car. I cancelled before the payment was due. When I called a couple months later, the lady i spoke too mentioned that my policy hadnt been cancelled until january.

After re-reading the OP, I suspect you arent getting anything.

Your lack of a contract in your possession doesnt mean as much in Insurance as it would in other situations, it would just be a really good idea to have so that you know exactly what you are and are not getting for your premium. Insurance is one of the most highly-regulated businesses in the country, and I can pretty much guarantee that some kind of contract (that you could demand to see) containing language that was reviewed and approved by your state with an annual premium exists, unless this insurance company was illegal and not licensed for your state or something bizarre like that.

However, you said that they sent you a "pay or be cancelled" type of notice in the mail, and they told you to not worry about it. They didnt do you any favors, the company probably waited until all the premium you gave them was earned before formally cancelling you. So, going back to my example, lets say you just stopped paying after 7 months. In that case, if the company wants to keep all the money, they send a notice asking for money, wait until that 8th month is finished (so all $800 they received is now earned), then they cancel.

 

[cresha270]

They have a website but you dont have access to your policy. Only the option to pay your bill. The contact numbers are never answered and at some times sound like they are disconnected.

Correct, it is not a deposit. Many people think that it is. It is also not refundable, in the way that many people think that it is. It is a down payment. That simply means that, take the total annual premium minus the down payment. What you have left is your balance due. That balance is generally paid over several months. The insurance company is being nice in allowing you to pay monthly. It can be a pain in the butt for them. If you had paid in full, you would never have received a cancellation notice. WHY did they tell you to ignore the cancellation notice? Had your payment crossed in the mail with the notice? That is the only situation that makes sense. Also, you said that you had access to your policy online. If that's the case, you could have printed your own declarations page. So, the lack of one, isn't a big deal, since you obviously had a policy, or you wouldn't be able to look it up online.

Also, based upon your lack of understanding about how the process works, I can't say that any of what you have described, leads me to believe that your previous insurance company was a bad company. Even in the claims situation, you could simply have a bad adjuster. Ask for a supervisor. Maybe they are disputing the fault of their driver. Who knows. It could be for any number of reasons, why they are taking a long time to settle this.

 

[moburkes]

You started a policy in May, and cancelled it in December. BUT, the insurance company didn't cancel it until January.

Do you still have proof of when you turned in the tags? If so, contact the department of insurance for your state. File a complaint. The ONLY relevant information is that you started a policy in May, you never received a policy in the mail, you provided proof to the agent (or whomever) in December that you turned in the tags because you sold the vehicle, and you received a letter in January that the policy was cancelled for nonpayment. Explain that you were told to ignore (whatever you were told to ignore). Explain that you simply want your policy to be cancelled on the date it was supposed to be cancelled, and not in January for nonpayment.

Do it like a time line.

 

[JustAPal00]

One thing you might always want to consider keeping after you sell your car is a non owners policy. It will cover you when you drive someone elses car, and it will make it so that you don't have a lapse in coverage. I pay $72 dollars a month insurance. When I went on assigned risk a few years ago I was paying $229 a month. After I got back on regular insurance I sold my car and drove my girlfriends for about 8 months. Had I cancelled my insurance, when I bought my next car, I would have had to go back on assigned risk for a year due to a lapse in coverage. The non owners policy was less than $20 a month! It saved me a lot of money in the long run!

 

[moburkes]

Assigned risk is not for people with lapses in coverage. Non owners policies are for specific circumstances only.

 

[JustAPal00]

Assigned risk is not for people with lapses in coverage. Non owners policies are for specific circumstances only.

In pennsylvania If your insurance is cancelled for points or accidents you go on assigned risk( or substandard insurance) for 3 years of clean driving. If you let your coverage lapse or cancel it you go on it for 1 year. Just like if you've never had insurance.

 

[moburkes]

Assigned risk is for people unable to get coverage through the regular market. A lapse in coverage shouldn't automatically qualify you for an assigned risk policy.