Car insurance problems

[Alan L.]

My son and his girlfriend were in a serious accident Saturday. A bobtail truck ran a red light, she saw it and hit the brakes and fortunately she clipped the back wheel of the truck rather than getting T-boned. Air bags deployed, the car totaled, cuts and bruises but other wise fine.

Turns out the driver of the Uhaul truck (as used truck not owned anymore by Uhaul) is uninsured. Fortunately she had full coverage - switched to this ins co on 10/6/09, received her thank you letter, thanks for the payment etc. This particular ins co only takes payments by charging your bank account directly.

Called Saturday and gave details to the ins co about the wreck, was promised a return call. On Monday 11/2 she received in the mail a letter, postmarked 10/27 that said the routing number they had for her bank debit was wrong and they her insurance is no good.

The routing number she gave them came from the bank and IS a valid routing number for THAT bank, just apparently not the one they used for that kind of payment.

Was told today tough luck - no coverage.

It is unbelievable to me that for something as important as cancelling policy the insurance co would not have known way before 3 WEEKS that their bank debit didn't clear, and when they found out it seems regular mail not be the way to inform the customer of the problem.

This is a 25 year old girl driving an 8 year old Accord worth about $5K, going to school to be a court reporter, working nights as a waitress, trying to make it on her own. She did everything they asked and assumed she was covered for nearly a month. This really pisses me off, I can't believe the ins co can get away with this. This insurance company has tons of national commercials which would indicate they have a physical presence, but turns out there is no where to go and speak with anyone - it is strictly phone and internet - a vapor insurance co.

 

[dave1949]

Ooh, that's a blood boiler for sure. Glad there were no serious injuries.

If she has the letter that says thanks for the payment, you would think taking that to the state insurance commision would be a good step. Given there are no serious medical bills and the value of the car is low (not saying the value to her was), I don't see how hiring a lawyer would make any financial sense fighting the insurance company. Maybe sue the other driver in small claims court?
Dave.

 

[ToadHill]

Absolutely, get all the information to the state insurance commissioner. I'd also get some confirmation from the bank that they gave the correct number to the insurance company. I'd also find out from the bank what contact they had with the company between 10/6 and 10/27, seems like over a 21 day period if the charge didn't go through, something would have happened between the two.

 

[Alan L.]

I don't think the bank dealt directly with the ins co, rather she called the bank, got the number, and gave that to the ins co. It was a valid routing number but apparently the wrong one to use for ins premium or other regular payments. The ins co's position apparently is, you didn't give me the right number.

But they should have known that pretty much immediately. I suspect what happened is they sat on it a few days before even attempting to make the draw on the bank. Then when the bank rejected it, they sat on that for a week or two before getting around to sending a letter they knew might take several days for the customer to receive.

When I buy a new car I call the agent and am told its covered. That to me is a binder, a temporary policy until finances are finalized. I don't see how there would not have been coverage. Its not like she wrote them a hot check. She has a valid bank account, it had the money in it for the premium, there was just a mistake made in the paperwork.

I did locate and download complaint forms from the Texas Dept of Insurance. I know this can't be the first time this has happened - can't believe they can get away with it.

By the way, when my son called to correct the routing number they were happy to have it apply back to Oct 6th until they found there had been a claim filed. So, if there is no claim you are covered retroactively (so they can charge for that period) but if there is a claim, oops, you aren't covered.

 

[CurlyDave]

30 or so years ago I had a similar problem with a check I wrote to an insurance company which they did not cash for 3 weeks, during which I had a fairly serious accident. They ultimately cashed the check, but tried to deny coverage, and one letter from a lawyer got them to re-think that position.

It might be worth paying $1-200 to get a lawyer to write to them. They don't have to know that all you retained him for is to write that letter. They respect attorneys, all others are treated like trash.

 

[ultrarunner]

Insurance Companies often only act when compelled...

You may very well have to sue them to collect... my brother did and they settled for something like 80k... we are not lawyers... he paid a friend of mine, who did not want to take the case $200 to prepare the court papers... my brother filed it himself and all of the sudden the Insurance Company was hounding him to settle... where before they would not even return his calls.

Do you have a consumer reporter in your area?

 

[MarkV]

Definitely call, don't write, the State Insurance Commissioners office. This is exactly the type of situation they are there for. Sometimes all it takes is a call from their office to the insurance company and the problem seems to go away.

MarkV

 

[Aggieville]

Definitely call, don't write, the State Insurance Commissioners office. This is exactly the type of situation they are there for. Sometimes all it takes is a call from their office to the insurance company and the problem seems to go away.

MarkV

This worked for me with a situation that was a lot less shady. I would recommend it.

 

[tallyho8]

I don't know about the laws in your state, but here if you do not make a payment on your insurance policy, it is still good until the company mails you a letter telling you that it is cancelled.

One of my friends had a wreck and had let his policy lapse because he forgot to mail the check. His lawyer found the regulations that state that his policy remains in effect until he receives notice from the company that it is cancelled. His claims were paid in full.

 

[dmccarty]

As others have said talk to the Insurance Commissioner.

received her thank you letter, thanks for the payment etc.

Sounds like to me she had proof of insurance. Did she have the card from the insurance company that is used for proof of insurance in case she was pulled over by a LEO? The documentation should be presented to the Insurance Commissioner.

In NC the insurance company has to give you noticed that you will be without insurance on a given date. I think we get 30 days. Your state might have something similar....

And the Insurance Commission is the place to start.

Good Luck,
Dan

 

[Alan L.]

Yes, she has proof of insurance and I now have in my possession all kinds of documents from the insurance company stating that her first payment was received, that coverage started on Oct 6th, etc. And the letter dated Oct 27th which says due to the bank "not honoring" her payment the insurance is rescinded effected Oct 6th. She received this in the mail 11/2, the Monday after the accident.

Point is, the insurance company acknowledged receipt of payment and she had no reason to believe there was a problem in the interim, otherwise she would have corrected the problem with the routing number.

I cannot imagine that the software the ins co uses does not immediately know the routing number for a given bank is incorrect as soon as they enter it. Even a cheap program like Quicken knows immediately if the routing number you give it for a bank is wrong, as they have a database with all the correct routing numbers in it. And its JP Morgan Chase, the biggest bank there is, so its on everyone's list.

Somebody sat on it for 3 weeks, and this was probably intentional so that they would never have to pay a claim during that 3 week period.

 

[MarkV]

Yes, she has proof of insurance and I now have in my possession all kinds of documents from the insurance company stating that her first payment was received, that coverage started on Oct 6th, etc. And the letter dated Oct 27th which says due to the bank "not honoring" her payment the insurance is rescinded effected Oct 6th. She received this in the mail 11/2, the Monday after the accident.

Point is, the insurance company acknowledged receipt of payment and she had no reason to believe there was a problem in the interim, otherwise she would have corrected the problem with the routing number.

I cannot imagine that the software the ins co uses does not immediately know the routing number for a given bank is incorrect as soon as they enter it. Even a cheap program like Quicken knows immediately if the routing number you give it for a bank is wrong, as they have a database with all the correct routing numbers in it. And its JP Morgan Chase, the biggest bank there is, so its on everyone's list.

Somebody sat on it for 3 weeks, and this was probably intentional so that they would never have to pay a claim during that 3 week period.

Alan, I will again vote for the Insurance Commissioner. I got hit by a big rig and the policy number from the accident was for the trailer not the rig. Had no idea where to go and the Insurance Commissioners office worked it out in a phone call.

You and your daughter have documentation stating her coverage started Oct. 6th, you are home free. Make the call.

Glad your daughter is OK. Those kind of situations don't always work out as well.

MarkV

 

[dmccarty]

Sounds like you have proof of insurance and they are trying to bluff their way out of paying the claim.

While the insurance situation is a PITA and would more than tick me off, if you daughter was able to walk away from the accident, all is good.

We still have issues from our accident in Feb. And it could have been much more badder than it was so we are thankful. We are not done with the insurance side of things but so far so good.

Once you get the insurance company to realize the errors of their ways, remember they have to pay for the value of the car that was totaled as well as the costs to drive the replacement car off the lot. They pay taxes, title, etc. At least they did for us.

We also spent quite a bit of time on the Internet getting comparable prices from Edmunds, Blue Book as well as dealers. We knew what our car was worth if we had to fight the insurance company over the settlement. Luckily we did not have to fight since they did what they were supposed to do.

Later,
Dan

 

[two_bit_score]

The insurance companies in Texas are getting away with anything they want to these days. The Texas Department of Insurance is worthless as far as acting on consumer complaints. Lawsuits are worthless now due to 'tort reform'.

Usually after coverage is 'bound' they have to keep it in force until they give you notice but too many fly by night insurance companies allowed to operate in Texas nowadays.

 

[LBrown59]

Sounds like you have proof of insurance and they are trying to bluff their way out of paying the claim.
We also spent quite a bit of time on the Internet getting comparable prices from Edmunds, Blue Book as well as dealers. We knew what our car was worth if we had to fight the insurance company over the settlement. Luckily we did not have to fight since they did what they were supposed to do.
Later,Dan

The exception rather than the rule.

 

[LBrown59]

The insurance companies in Texas are getting away with anything they want to these days. The Texas Department of Insurance is worthless as far as acting on consumer complaints. Lawsuits are worthless now due to 'tort reform'.

Usually after coverage is 'bound' they have to keep it in force until they give you notice but too many fly by night insurance companies allowed to operate in Texas nowadays.

A DOI is a figgure head or a puppet of the insurance industry controlled by insurers.

 

[jwstewar]

OH, LB, I wish that were true. We have to jump through so many hoops to make the Ohio (and other states) Dept. of Insurance happy, that it isn't even funny. You wouldn't believe the amount of time and money we spend doing things to make auditors and the insurance regulators happy. I probably spend 20% of my time explaining to auditors and the like what controls we have in place and how we do stuff. Worst part is, it just isn't me, there are tons of us here doing this. I see it from me being a computer programmer all the way up through the CEO answering to their calls. You....sensoring myself here now.....

Now, speaking from personal experience, I think most insurance companies try to treat people fairly. I've had very good experiences dealing with insurance companies for the most part - both my own and others through accidents. Only one instance of a hail storm I think they jerked us around and wouldn't replace the roof on our house because "it wasn't damaged enough." They replaced it 2 years later when the house burnt to the ground. The sad part of why the insurance companies have to be so strict and stuff, is because of people not being honest and fair with them and trying to rip them off. I've seen it done, I've had family members collect on the same windows damage by hail storms 3 times w/o ever replacing them. They are still in use today.

 

[sellercreek]

I may be wrong, but banks don't have a bunch of routing numbers -- they only have one. It is part of their trying not to honor their obligation by confusing the situation.

 

[2manyrocks]

This doesn't sound right. Every bank has an ABA routing no. that identifies the bank--it's the first no. printed on her checks. The next number would be her individual account no. Then the last number on the check is the check no. If her debit card has been working for other purposes, I don't see how in blazes the insurance company wouldn't have debited her account.

Did the debit show on her account statements from the bank?

She needs to talk with the part of the bank that knows the mechanics of the debit card system and can tell her what specifically the problem is. The tellers and loan officers won't know. It will be someone in bank operations.

I think the insurance company will have some difficulty getting by with this. Maybe she needs to consult with a lawyer. I have no clue about TX law--bad faith in denying a claim can be real trouble for an insurance company in some states.

 

[Western]

Ooh, that's a blood boiler for sure. Glad there were no serious injuries.

If she has the letter that says thanks for the payment, you would think taking that to the state insurance commision would be a good step. Given there are no serious medical bills and the value of the car is low (not saying the value to her was), I don't see how hiring a lawyer would make any financial sense fighting the insurance company. Maybe sue the other driver in small claims court?
Dave.

Good to hear your son and his friend are ok..as far as the above post,,,at this point it may be becoming "emotional stress". I agree with the posters on a counseling with an attorney.

I also agree with suing the other driver, that sounds slam dunk easy, but he may not have anything to get..

I am assuming the local PD was there so you have an accident report?

Since it will be on her driving record, I would get what I could using a lawyer. She will "pay" for it for a while anyway..