Why do Auto Insurance Companies cancel insurance policies when the payment is late?

[Traxcat]

What is the name of your state?What is the name of your state? MN

I'm not talking about temporarily canceling you insurance policy, I'm talking about permanent cancellation on the policy.

Are they making so much money they don't need the customers or is this just another one of them "Make the Poor working stiff suffer" deals.

People who don't have to survive paycheck to paycheck clearly don't have this problem.

Not making a Premium Payment on time clearly has nothing to do with ones driving ability.

Traxcat

 

[racer72]

I'm not talking about temporarily canceling you insurance policy, I'm talking about permanent cancellation on the policy.

Read the legally binding contract you buy when you purchase your insurance coverage. You should be fully aware of their cancellation policy before you sign on the dotted line.

Are they making so much money they don't need the customers or is this just another one of them "Make the Poor working stiff suffer" deals.

Insurance companies pay out 80 cents for every dollar they take in from premiums. Add in their costs such as payroll, taxes, etc. and the percentage and the profit margins drop to the 5 to 10% range.

People who don't have to survive paycheck to paycheck clearly don't have this problem.

There are millions of folks that live paycheck to paycheck and they pay their insurance premiums on time. You are in a small minority.

Not making a Premium Payment on time clearly has nothing to do with ones driving ability.

It is a known fact that those with poor credit tend to have poorer driving records. Those with lower wages tend to drive older cars which are involved in more accidents. Folks with lower incomes do not maintain there cars as well as they should and this results in a higher accident rate. Part of being a responsible driver is maintaining insurance coverage. Life's tough sometimes, whining about it isn't going to make it any better.

 

[Eric Vickery]

I don't know much about the law but so far as insurance companies...I was in a motorcycle accident 2 years ago (wasn't my fault) even before I went into surgery that day the insurance agent of the guy who hit me was in and wanting me to sign settlement papers. It is against the law to drive without insurance...so my bet is that they are raking it in.

 

[Lynx 36]

Quote: "Insurance companies pay out 80 cents for every dollar they take in from premiums. Add in their costs such as payroll, taxes, etc. and the percentage and the profit margins drop to the 5 to 10% range"

They wish. In 03 State farm paid out $1.12 f/ every dollar they had coming in. Progressive f/ example paid $.94 f/ every dollar they took in which is considered excellent.

Quote: "so my bet is that they are raking it in."

So what? After all they are a for profit business, not a charity or non-profit as most people would like them to be. When someone doesn't pay their bill on time they are looked at as being someone at risk to insure. Not paying bills is a definite sign of an irresponsible person, and no insurance company is required to insure anyone they don't want to.

 

[racer72]

I got my numbers from my sister, she works for a smaller regional insurance company. I could see some of the bigger companies paying out a higher percentage.

 

[Lynx 36]

Actually these #'s were from 02 not 03.

 

[Traxcat]

There are millions of folks that live paycheck to paycheck and they pay their insurance premiums on time. You are in a small minority.

How nice for those with the "Larger" paychecks.

So what? After all they are a for profit business, not a charity or non-profit as most people would like them to be. When someone doesn't pay their bill on time they are looked at as being someone at risk to insure.

When you are "Forced" to have insurance by the Government there should be "NO" profits involved.

Not paying bills is a definite sign of an irresponsible person, and no insurance company is required to insure anyone they don't want to.

Lets see! Food, Shelter, Clothing, Insurance. Which one do I want to pay this week. It's a no-brainer.

 

[RolandOne]

I have had the same insurance company for years. One period I thought I mail the premium, but it got stuck under some other paperwork. I didn't know they hadn't received it until I got a cancellation notice. Saying that I could pay the same amount and policy would start back up as soon as they received the money.
I was a little peeved that hadn't received some kind of notice, that they were going to cancel me or hadn't received my payment. Luckily they are pretty quick though and only ended up without insurance for couple days or so. Lucky better that I didn't need it.

Very surprised they permanently cancelled you though. That sounds like they don't want you business. Did you have too many claims or something?

Got agree with you Traxcat, if government forces you to have insurance, then they shouldn't be for-profit business any longer. That's like telling me I have to buy my groceries at Walmart from now on. And they can just keep getting bigger and bigger and take all the profit they want still.

 

[Lynx 36]

Quote: "When you are "Forced" to have insurance by the Government there should be "NO" profits involved."

Yea, that would be real nice. That means everyones premiums would go down. I'd love that. But in reality......

The insurance companies would then cease doing business and all our insurance needs would be handled by the state or the fed, thus creating another already bloated govt program. Additionally if anyone had dealt w/ the state or fed on anything knows how slow they are. I could only imagine how long it would take to settle a claim.

Like it or not we live in a capitalist, not a socialist society. In a capitalist society it is not the goverments job to provide everything f/ everybody. This law was created to protect people from losing their health and property, due to the negligence of a driver w/ no insurance.

 

[tammy8]

If you don't pay your power bill then your power gets cut off. If you don't pay your phone/cell phone bill you get it cut off. Why not the same with insurance?

 

[Who's Liable?]

How nice for those with the "Larger" paychecks.




When you are "Forced" to have insurance by the Government there should be "NO" profits involved.




Lets see! Food, Shelter, Clothing, Insurance. Which one do I want to pay this week. It's a no-brainer.

Get over it and pay your insurance or get taken to court and sued for EVERYTHING you owe... Then we'll see what you cry then... You cry for having to pay insurance, but you'll cry even louder if an un-insured person hits you...

 

[FroggerGirl]

How nice for those with the "Larger" paychecks.

I make $400 bucks a week, my rent is $1200 a month. I also have other bills, gas and need to eat.

I manage to pay my insurance, and I just paid cash for a $14k car. And really. It's much easier to shell out your insurance payment every month, than shell out $2000 when some idiot hits your parked car.