Policy Overcharge

[MA_tenant]

What is the name of your state? MA

When I purchased my policy for my new car, the Quote included Collision coverage. However, on next day itself (before actually buying the car), I changed my mind and purchased a different model. The insurance Agent issued a Policy Change Request and that too shows Collision Coverage.
when I received the Summary Coverage Papers, it did not show Collision Coverage. On calling the agent, they said it is an error and they sent a Binder showing Collision coverage. However, when they sent the revised Summary Coverage, it again excluded Collision.
When I sent letter, they called up and said it is an error and now they have sent a revised Summary with Collision but also jacked up the premium by $400. They say that I requested later to add this coverage. However, they charged premium from day 1 !!
Is it legal ? Can I cancel this policy without paying short rate penalty? This Agent and Insurance company is driving me nuts !!

[moburkes]

If I'm understanding your post correctly, they added the collision at your request effective the original date that you requested it (if that's what you mean by DAY 1).

For example, you added it eff 11/1, but by the time it was "really" added (after the mistakes), it was 11/10, so you only expected to pay for the coverage eff 11/10.

No, they corrected their mistake, and added it eff 11/1 which is when you asked for it.

Adding collision (and comprehensive, too, usually) DOES increase your premium. As a rule of thumb, I tell people that adding physical damage coverage will double your premium.

I hope this made sense. If not, post back using dates, so that I can understand.

[Betty]

If collison coverage was effective as of the original date of the pol. (even though your summary coverage didn't show it until later due to an error), they are correct in charging for the coverage as of the original eff. date. If you would have had an accident, between the eff. date & the date it was actually on the pol. summary, that involved your collison coverage, the ins. co. would have been liable. Therefore, since you had the coverage, you need to pay for it. (You indicate they sent a binder showing collison coverage even though they didn't show it on the first revised summary.)

[MA_tenant]

I understand that adding Collision does increase premium.
However my case is --
1) I requested for Collision when I requested for Quote
2) The Quote shows Collision coverage which I agreed to purchase as per quoted amount
3) They did not include Collision in Summary
4) When I pointed the mistake, they added and charged me extra

My question is,

If your initial quote include Collison Coverage, can you charge an additional amount for the same coverage?

[LSCAP]

You got an insurance quote on the first car, then changed to a different car.

The rate for the second car can be much highter.

IE a Honda del sol, ( a two passenger vehicle, and considered a "sport" vehicle) gets a much higher rate than the standard Honda sedan, ( a four passenger vehicle).

[MA_tenant]

I understand it can be different for different cars. However :

1) It is unlikely that the difference for a Toyota Corolla and a Toyota Camry (V4) will be $400

2) Even the Summary of Coverage for the old car -- Corolla (which they anyway sent out) does not include Collision Which indicate that it was an error on their part even before the car was switched

3) They are not giving a reason that the increase is because of change in car. The reason they are giving is, they did not include collision during initial processing (even though they include it in quote) and now included it based on my request !

[moburkes]

Okay, so how much does your declarations page show as the premium for collision?

[MA_tenant]

The Original Quote shows a lump sum (does not break down by items).
The Coverage Page sent initially did not include Collision (as I mentioned earlier).

The revised Coverage Page now include $387 for Collision

[moburkes]

Originally Posted by MA_tenant

The Original Quote shows a lump sum (does not break down by items).
The Coverage Page sent initially did not include Collision (as I mentioned earlier).

The revised Coverage Page now include $387 for Collision

Quotes may or may not show breakdowns, depending upon the insurance company. The declarations page (which you called the coverage page) does show the breakdown. So, there is your answer. You ARE paying $387 for the collision coverage.

[MA_tenant]

I think we are back to square one.
My basic question is ---
Can a insurance company quote you an amount and then 2 months after your policy is started increase premium while providing SAME coverage (no change in Coverage) saying that they made an error
I think the question is clear now

[moburkes]

We must not be understanding your question. If your insurance company made a MISTAKE by not including collision when you specifically asked for it, then CORRECTED their MISTAKE by adding collision EFFECTIVE the date that you originally requested it, then they did exactly what they should have done, which was already stated to you. AND, if you had been involved in an accident in which you needed collision coverage, but didn't have it, you would have been looking for someone to sue your insurance company. They screwed up. They fixed their mistake. They didn't charge you EXTRA, but only charged you what you should have been paying in the first place.

[MA_tenant]

Insurance Company made a MISTAKE by not adding Collision in Coverage. However they added it in the QUOTE.
So the bottomline here is ---
They QUOTED me $ X for Collision; DID NOT include in Declarations. And now when I pointed this, they added Collission but also added amount.
It was their mistake if they gave me an INCORRECT QUOTE and if they THOUGHT that the QUOTE does not include Colision.
But why I should pay in ADDITION to what was QUOTED for the Insurance INCLUDING Collision

[moburkes]

Originally Posted by MA_tenant

Insurance Company made a MISTAKE by not adding Collision in Coverage. However they added it in the QUOTE.
So the bottomline here is ---
They QUOTED me $ X for Collision; DID NOT include in Declarations. And now when I pointed this, they added Collission but also added amount.
It was their mistake if they gave me an INCORRECT QUOTE and if they THOUGHT that the QUOTE does not include Colision.
But why I should pay in ADDITION to what was QUOTED for the Insurance INCLUDING Collision

Okay. Now I finally understand what your concern in. A QUOTE is just that-a quote. It is simply an ESTIMATE. The ONLY thing that is binding upon the insurance company is the POLICY itself, or the declarations page, which was corrected. The insurance company did what they were supposed to do.

Ex. If you received a quote for "full coverage", and the premium said $1, that DOES NOT mean that you will only have to pay $1 for insurance. It means that they make a mistake. It means that they are allowed to CORRECT their mistake. When they sent you the dec page w/o collision, they were allowed to, and supposed to, correct their mistake. When they did correct their mistake, they corrected it from the original request date.

Is that better?

[MA_tenant]

I think we are getting closer. thanks a lot for your time & patience.
However, what this means is --
An insurance company "A" quotes me $1000 and another "B" makes a dishonest (or incorrect -- does not make a difference to me) quote of $800 just to win me as a customer. I go with B and then 2 months down the line B says -- Oh sorry it was a mistake and it should be $1200.
I lose $200 and "A", being honest, loses a Customer but B smiles and goes ahead with his fraudulent practice! Is this practice legal ?

MA law says -- "Once you receive an invoice reflecting new (not estimated) rates and any applicable new deviations or discounts, you have 30 days to change insurance companies without paying a "short rate" penalty."

I guess this is applicable in my case and I can cancel without paying a short rate penalty. Right?

[moburkes]

What you have described may happen. An insurance company, by law, has a certain number of days to make changes from the effective date of the policy or the renewal. THIS DOES NOT APPLY WHEN YOU SIMPLY MADE A COVERAGE CHANGE. In your example, you are talking about a NEW BUSINESS policy. The insurance company has 59 or 60 days, usually for "free look" in which to order your driving record, make policy changes based on you not returning policy forms, cancel the policy, etc. That's why:
1. You should not wait until the last minute to change carriers.
2. You should never let your insurance policy lapse.

If you were already insured, and decided to change carriers based on the quote, then made the down payment with the new company, you would have received the corrected notice, potentially with enough time to cancel the new policy, and stay insured with the current company.

edited:
As far as that law that you quoted, you'll need to point it out to me. You never received an initial invoice, only a quote.