Car insurance

Otto_2000 · #1 05-05-2003, 04:42 PM

What is the name of your state? New York

My son went to a insurance agency to get insurance for his car. I wrote a check from my account for his down payment and they gave him his insurance I.D. cards. We went to the DMV to register the car and it turned out that he had not returned his plates when the car was off the road, so they said he couldn't register the vehicle for 6 months.
I told my son to call the insurance agent and cancel the insurance since I was not going to pay for insurance on an unregistered car. He did. They told him he would have to come down and sign a cancellation form and he couldn't get his money back until they cashed the check and then they would give him a refund after one month. I felt that was unacceptable and I put a stop on the check. Now they sent him a letter stating that he must pay some kind of fee, about $58, for stopping the check and not paying for the first month.
I was under the impression that you had 24 hours to cancel a contract. We cancelled this insurance verbally, by phone, 3 hours after we got it. Is this charge legitimate? And what of the fact that it was my check and not my sons?

stephenk · #2 05-06-2003, 10:47 PM

"I was under the impression that you had 24 hours to cancel a contract"

Who told you that?

Otto_2000 · #3 05-07-2003, 07:09 AM

I can't remember if someone told me that or if I read it somewhere. Perhaps I read it on a contract or two. I don't remember. Is it true? And what about this situation? Can they require me to pay even if I don't have insurance or a car to insure for that matter?

JETX · #4 05-07-2003, 07:51 AM

"They told him he would have to come down and sign a cancellation form"
*** That is reasonable. In the event of a subsequent claim, they wanted to have written confirmation of his cancellation.

"and he couldn't get his money back until they cashed the check and then they would give him a refund after one month."
*** That is also reasonable. The reason for that is that they insurance agent has not idea if your check is going to be honored or not and did not want to put themselves in the position of refunding your money.... then having your check bounce.

"I felt that was unacceptable and I put a stop on the check."
*** Bad move. And some states have provided penalties for exactly this action.... people getting ID cards to prove insurance, then stopping pay on the payment.

"Now they sent him a letter stating that he must pay some kind of fee, about $58, for stopping the check and not paying for the first month."
*** What EXACTLY is this fee for?? No one can determine the validity or propriety of the charge if you don't tell us what the fee is for.

"I was under the impression that you had 24 hours to cancel a contract."
*** You were told wrong.

"We cancelled this insurance verbally, by phone, 3 hours after we got it. Is this charge legitimate?"
*** As noted above, can't tell without your telling us what the charge is for.

"And what of the fact that it was my check and not my sons?"
*** So what??

tammy8 · #5 05-08-2003, 11:39 AM

The fees are probably the returned check fee that the insurance received from the bank plus the insurance company actually afforded you coverage for the three hours. You also could have been short rated with basically means you pay a penatly for canceling the policy. You may want to check your state insurance dept to see what percentage the penatly is.