Livestock Insurance

[Alpacalady]

I raise Alpacas. Insured animals with livestock insurers in latter part of 04 and 05. Decided to switch companys for 06. Now receiving letters from previous insurers threatening to turn account over for collections. No money exchanged hands for 06. They claim they issued the policy for 06 and we were bound by it and must remit the yearly premium of $877.00 or () be turned over for collection. Company in Geneva , Nebraska.
Thanks,
RM Bates
Los Ranchos de Albuquerque, New Mexico 87107

[ALawyer]

If you did not pay the premium, the policy would normally lapse or non-renew. If it is a policy you were obligated to keep inforce, such as for a lender, that would be a different story than if it was one you took out to protect yourself.

If the policy was for a multiple year period you'd be liable for the premium up to the date of cancellation, and then might have to pay a "short rate" cancellation charge, perhaps 2 of the 12 months. Also, even if it was lender mandated, if you no longer have a loan outstanding you could cancel and pay the short rate fee.

It sounds to me that the agent or broker may be threatening you so that he or she earns the commission on the renewal, or qualifies in terms of his "persistency".

Contact the State Insurance Deaprtment and unless you had to maintain the policy for a lender, don't pay until the state says you should.