Can an auto insurance company refuse payment?

Question

My insurance premium is drafted every month on the 28th. The draft on the 28th was returned NSF. The insurance company sent a notice that they would try to draft the account one more time before the policy canceled on the 13th of the next month. They attempted a draft on the 11th and it was returned so the policy canceled on the 13th. I went in to try to pay cash on the 14th and they would not accept payment because they stated they were trying to draft again for a 3rd time which was never authorized by me. I then continued to try all week to pay cash for the returned NSF premium and they would not take the cash until the draft was returned. The draft was finally returned and the policy canceled, but while waiting for the draft to come back again so I could pay them cash, someone hit me and totaled my vehicle which the insurance company now does not want to cover. I am screwed or do I have a case if I sue the insurance company?

Answer 1

you mean, sue them for canceling your policy when you didn't pay the premium?

good idea, why not sue Macy's next, for not giving you clothes that you didn't pay for?

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Ok, now I understand why you ask the question.  sorry about that last wisecrack.

I'll explain it as I understand it, but a banker or insurance expert might correct me if I get something wrong.

here's the thing...they can cancel your policy back to the date of the NSF draft, because the continued coverage was just a courtesy.  

Having your permission to draft your account is similar to a check -- it is your promise that the money is there.  They trusted you and inexchange, promised to cover you just the same as if you had given them cash.

When it turned out that the money was not there, the whole deal gets called off.  No money, no insurance.

At least, it's the other guy's fault so you don't have that to worry about.  Hope you don't have a car loan.  If ya do, you still have to pay it off but now you don't have the car.  That is gonna be a major hassle.  They can accelerate the due date and try to make you pay it all off now.

The other guy is who you need to sue.

Good luck.

Answer 2

Ok seriously? You didn't even have money in your bank account to cover your premiums, but you think you will have money to try and SUE your insurance company?

What are you going to sue them for? Insuring someone w/ out any sense like yourself?

Why didn't you go DEPOSIT the cash into your account so your check could be covered? Oh, because you weren't smart enough to think of that right?

Oh well, thats the price you pay.

If this other person who totalled your vehicle was at fault, you can make a claim with that persons insurance company.

Otherwise, if you are at fault, you are responsible to pay for your own damages, AND the damage you caused to the other driver.

Oh, and as far as your company refusing to take your cash, READ YOUR POLICY or call your AGENT to see what the companies procedures are on taking payments.........

Answer 3

apparently the auto insurance company can do whatever they like - I am currently trying to get $ out of them on a totaled car - this is a very difficult task indeed.

Answer 4

If your policy already canceled then the answer would be: you don't have a case and really can't sue.

Whatever your insurance companies rules are for their payment plans is what you have to stick with.  The whole point of setting up on a preauthorized checking account (where your insurance premium is deducted directly from your bank account) is that the funds are EXPECTED to be in your account.  

I work for an insurance company and we cannot accept a payment if we have not had the automatic deduction returned.  So I can believe that they could not take a payment- and if they advised they would be pulling from your checking account again you should have had the funds in your BANK ACCOUNT not try to give them cash.

Sounds like you defaulted on your payment agreement and if that's the case.... you are pretty much screwed.  Good luck trying to sue an insurance company when you canceled for nonpayment!!

Answer 5

I am not totally sure on this one best bet would be to contact your state dept of insurance. But you coverage is not going to pay for that accident you knew you didn't have insurance and you still drove tech. you can go to jail for that ecspeically if someone was hurt