didn't want to hijack "Escrow didn't renew Homeowners Insurance"

[SheScreamsInSil]

What is the name of your state (only U.S. law)? NJ

No question, just a tale. I had a sort of similar problem. My insurance company got confused somewhere and cancelled my homeowner's policy. They sent me a check for the unused balance after cancellation. They never sent me a cancellation notice. (Since my mortgage company never got on me about that, I can only assume that any cancellation notice was sent to an old mortgage company...who knows...)

I had recently switched to a better "division" (for lack of a better word) in this insurance company, and I heard from friends about the nice dividend checks you get back at the end of the year. I just assumed that the check they mailed me was a dividend check. (I have HO and car insurance through this same company.)

I was renewing my car insurance, and they ask you to provide your HO policy #. I got a call from the company shortly after they received my renewal form, because the agent showed my HO policy as cancelled. It got straightened out and my HO policy was reinstated without any dings--but boy would I have been upset had I needed to make a claim!What is the name of your state (only U.S. law)?

 

[moburkes]

Your insurance company cannot cancel your policy without providing notice to YOU. It's your policy, regardless of the payment method. Since the mortgage company was supposed to pay, they would have also received a copy of the cancellation notice.

Was it an underwriting cancellation or a nonpayment cancellation? If underwriting, they don't tell the mortgagee why they are cancelling, they just provide them with a notice stating the cancellation date. If for nonpay, they also provide them with the $ amount needed to keep the policy active. You receive both notices as well, sent record of mailing, which means that the insurance company has proof that it was mailed to the last address on file for you. But this shouldn't be an issue since you received the refund check.

Anyway, the dividends that you receive - you pay extra money for UNLESS this is a mutual company. For example, with a stock company, you'll pay an extra $100 per year, and receive $20 per year back in dividends. Doesn't really make sense, now does it?

However, if the check was for hundreds, it sure as hell wasn't a dividend check.

 

[SheScreamsInSil]

Yes, since I received and returned the renewal form--you'd think they'd notify me of a cancellation. It's possible that they DID...my mail goes missing occasionally. (Nice, huh?) But I'd still have expected the check to note SOMEWHERE that it was for a cancelled policy.

My guess is that it was cancelled for non-payment. On my renewal I noted that I had a new mortgage company. (I know they GOT the renewal with this info, because I made other changes to the policy that they put into effect.) I think they maybe billed the OLD company, were not paid by them, and then cancelled. Although...SOMEONE paid them because they paid ME back after the cancellation.

I'm not sure what the deal is on the dividends. The company is New Jersey Manufacturers Insurance. Their rates are reasonable compared to others, I think they weed out the bad drivers, and you or a famly member need to belong to a company that is part of a group of NJ businesses that gets you "in".

You are correct though, my check was for over $100. That's my bad...that probalby should have raised a red flag for me. This being a new NJM experience for me, I knew you got a check back, I just had no clue how much. And when you're paying as much as we do for car insurance here in NJ...$100 doesn't seem like all that much!

 

[moburkes]

The problem is that, by the time you returned the renewal form, with changes, they had already billed the old insurance company. Generally, an insurance company isn't going to send a 2nd bill to another insurance company. The reason is that the new bill will have to provide the same # of days due - which would extend the original due date. Especially on renewals, no insurance company wants to extend the due date. So, likely, they received a payment but AFTER the policy had already cancelled.

Since payments are mailed to banks, and not to insurance companies, the bank simply cashes the check. They don't know, and don't care, about the status of the policy. Once the insurance company ensured that the check did clear, they refunded the unearned portion of the premium.

Accounting has no idea why a policy cancelled. They just collect checks and mail checks. So they can't tell you why it was sent - overpayment? Policy changes which resulted in a credit? Double payment? Cancellation? They don't care.

Car and home are separate; one has nothing to do with the other.

 

[SheScreamsInSil]

Yes, car and home insurance are separate. I just happen to have BOTH through the same insurance company. Since I was paying a lot at the time (still had collision on a not-too-old SUV), getting a dividend check for a little over $100 didn't seem unreasonable--given the amount I'd paid for insurance (HO & car combined).

 

[moburkes]

I understand what you're saying. But, logically, your thougth process was wrong. I'm trying to help you see that.

The economy is BAD. When the economy is BAD people file more claims. When people file more claims, they don't send out dividend checks of over $100. When the economy is GOOD they don't do that. If your dividend check is that high, that means that you're overpaying by HUNDREDS of DOLLARS on your policy. $100 check would cost you thousands, actually, in premium.

So your logic was bad. Glad that it worked out in spite of that.

Oh - and likely, the underwriting company's name was on that check, and since the u/w companies are different between auto and home, you would have been able to tell the "company" it came from, which would have led you back to your home insurance company, not your auto insurance company.

Or you could have just called to get verification.

 

[JustAPal00]

I'm surprised they reversed it. I deal with people all the time that the same thing happens to and after appealing to the state insurance commissioner they go on state backed insurance plans.

 

[moburkes]

I'm surprised they reversed it. I deal with people all the time that the same thing happens to and after appealing to the state insurance commissioner they go on state backed insurance plans.

Re-read that last sentence of the OP. It says he got coverage back, but doesn't say that it was without a lapse - just without "dings".

 

[Country Living]

Just my little 1 cent worth - her receiving a "dividend" check would depend on the company with whom she is insured. I get a Subscriber's Savings Account check at the end of every year as a return of profits to the membership. Maybe her company has a safe driver's program that sends out a check for an accident free period. Her check could have been for anything - that's why it was important that she read the letter that comes with it.

I'm not going to let her off the hook for not knowing her homeowner's insurance lapsed - especially in this electronic age. Being financially responsible is not only about checking and credit, it's about anything that impacts your financial well-being. That includes insurance!

I have that little nagging feeling she's just carrying the minimum auto liability coverage for the state. Sigh....

 

[moburkes]

Just my little 1 cent worth - her receiving a "dividend" check would depend on the company with whom she is insured. I get a Subscriber's Savings Account check at the end of every year as a return of profits to the membership. Maybe her company has a safe driver's program that sends out a check for an accident free period. Her check could have been for anything - that's why it was important that she read the letter that comes with it.

I'm not going to let her off the hook for not knowing her homeowner's insurance lapsed - especially in this electronic age. Being financially responsible is not only about checking and credit, it's about anything that impacts your financial well-being. That includes insurance!

I have that little nagging feeling she's just carrying the minimum auto liability coverage for the state. Sigh....

Hey CL. Membership means mutual.

 

[Country Living]

I'm a USAA member.

 

[moburkes]

I'm a USAA member.

Me too. They are mutual.

 

[JustAPal00]

Me too. They are mutual.

Me three! Love those checks.

 

[Country Living]

Did you see the logon page Friday afternoon or all day Saturday? Awesome!

 

[SheScreamsInSil]

Those who can do, do. Those who can't, teach.