Retroactive auto insurance premium?

Question

I obtained an auto insurance policy in August 2007. In January 2008 (five months after the policy was purchased) I received my policy renewal. The renewal price was substantially more than the initially policy cost because the insurance company had written my original policy with innacurrate information (assumptions they made that were incorrect, there was no falsification on my part). I cancelled the policy and found a new provider. The insurance company then sent me a bill retroactively charging me for the original policy with the new information and premium changes. Can they retroactively charge me for the policy that I had already paid in full based on our original agreement? Does the insurance company have any legal recourse or right to collect this money?

I already filed an official complaint with the NJ Dept. of Banking and Insurance and am waiting to hear back.

BTW don't need people's opinion, looking for response from someone who knows the laws in regards to this

Answer 1

When you received the original policy with the "wrong assumptions" in it, did you take any action to correct them?  If you didn't, you were in fact guilty of falsification.

Answer 2

Im not really sure the laws in NJ but in illinois they can do that, for the time that you had the coverage you have to pay.  And yes I know not to trust ALLSTATE they did the same to me

Answer 3

It really depends upon what the facts of the case are.  If you care to elaborate with DETAILS as to how Allstate made assumptions that were incorrect, we could give you a more definitive answer.  It has been my experience that insurance companies seldom, if ever, make assumptions.  They check everything very closely to make sure that they don't violate state insurance regulations.  If, however, your Allstate agent made assumptions and put that into the quoting and issuing software that Allstate provides to their agents, I could find that much more plausible.  If that is the case, your complaint is actually against your agent, not Allstate.

In the long run, the NJ Dept of Banking and Insurance will investigate and make a determination of what action they think should be taken.  They will get the facts and issue a determination based on those facts and the insurance laws of NJ.

ADDITIONAL INFORMATION:

Thanks for the details.  It is clear that your complaint is against the agent, not Allstate.  Allstate took the information that the agent gave them and issued your policy based on what they were told.  If, as you say, the agent made false assumptions, then this is an Errors & Omissions (E&O) claim against the agent.  If the additional premium is small, they should ask Allstate to waive it or pay it themselves.  If it a very large amount then the agent should file it with their E&O carrier (which is probably Allstate) and have them pay it.  

One additonal note:  you said that no one reads their declarations pages.  That is a problem that is very common but it isn't an excuse that will hold up in court.  Every policy that I have ever seen comes with a cover page that explicitly tells the policy holder to read the declarations page.  That places the burden of verifying factual information back on you.

Answer 4

Easier to answer the questions if we know what the assumptions were that the company made.  More than likely this is the agents fault.  Captive agents (which is what an Allstate, Statefarm, Farmer's...etc are called) can only sell one company's products and are pressed upon to meet sales goals.  I am an independent agent (we write insurance for many companies with different rates and products) which gives us the opportunity to compare different options based on age, driving activity, package credits and so on.  I see some quotes from other agents in the area and I can tell they haven't checked driving records or give many discounts in the quote that a client may not even qualify for.  

When agents do this they can issue the policy that resembles the quote, but when the company actually checks to see if you qualify for a homeowner's discount, education discounts, accident free discounts, student discounts, distance driving to work...etc.  They find that you don't meet these standards or find that you have a few tickets and adjust your premium whether you like it or not.  I admit that five months to notify you of this is a long time and it doesn't make sense that you got an increase on your renewal and that made your current policy term go up.  My advice is to talk directly to the agent that sold you the policy.  There is no excuse if they cannot explain this in great detail.  

Hope this helps.

Answer 5

Unfortunately here you are going to end up with the short end of the stick here. But I think you should attempt to appeal to the agent and see if they can get it fixed for you. They are really your only shot at getting the bill "waived". If they in fact made the error, they should be able to own up to it and Allstate most likely will eat it. Good Luck!!!  Then see an Independent Agent for all your future needs!

Answer 6

you know,if you want to get the most relevant answers,you got to try to find it out yourself,since only yourself knows what you really want.here is a good resource for you to start.

http://insurance.online-assistant.info

Answer 7

no company would asked you to pay repeatedly you must fight for your view for more legal cunsultancy please visit http://wwwinsuranceplan4u.com