Legal Insurance Advice Needed, Virginia Car Insurance Problem

[Arthur Wildfire! March]

I'm required by law to maintain car insurance. It appears this requirement is allowing an insurance agency to mess me over bigtime.

I have an excellent driving record. Not a moving violation to my name since Noah's Arc [Bush administration.] But rates went up anyway. I was told I must pay a balance of roughly $600 by January 8th to get a year's coverage. Well, the place I work at has been struggling. I don't have $600 to spare. So I asked my mom to call up the insurance agency and see how much half a year's coverage would cost, because we can't pay for the full year. He said it would cost $296.

[I was coming down with a lung infection, along with a toothache and a sprained thumb. I really didn't want to make the call myself, at the time.]

She and I shopped around a bit. That seemed like the best deal. On January 7th, I went in and paid $296. The man who was on the phone remembered the call and talked with the lady who handled my bill.

Saturday, I get a letter that I must immediately finish payment of the annual bill, almost another $300. I don't have that much cash on hand. Heck, I can't even get new shocks on my car.

I called up Monday, said there must have been a mixup. A third person said she would handle the problem, that I would most likely be out only $6. I find out at the end of the day that I will start to receive monthly bills of $47 a month starting in March. I ask what happens if I can make the second payment with my tax return, which might be as late as May for all I know, how much would I be out for the year. She says she doesn't know! I ask if I'm being charged $150 a month for the first two months. She doesn't know. She said that maybe the man my mom talked to didn't know I already had some kind of program going with that company. [In other words, repeat customers get messed over? Dangerous to do business twice with the same company? That sounds insane.]

She also says she doesn't know the name of the man who talked to my mom, or what kind of coverage he had found. It's a single office business. Everyone is about 20 feet away from each other. Maybe 2 men and 3 women work there.

If I am unable to get satisfaction today, are there any ways I can apply pressure to these people? Legal? Beaurocratic? Political and/or social? Would it be dangerous to list their names on the internet, perhaps? I'm willing to risk being sued. I feel like I have little to lose at this point.

Even if I managed to get my money back, that would mean I drive without insurance for a few hours, which is against Virginia law, as I understand it. IMHO, this provides insurance companies an opportunity to do things to you they would not normally get away with.

Sad, angry, flu-infested FReegards.... [at least my thumb works now.]

[Thane_Banquo]

Fraud. Contact your lawyer.

[Mo1]

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[Thane_Banquo]

Your other option is to cancel your policy and go with a different insurer.

[jimt]

There are alternatives. Here in Texas we have insurance agencies that sell by the month, not annually or semi-annually. I don't know how well they'd pay if you got in a wreck, but they'll take you with few questions and it's relatively cheap. Look for one of those.

[alisasny]

How would you be without insurance for a few hours? THey dont bill hourly but rather daily.

[Arthur Wildfire! March]

I just called the agency again. She told me she simply can't say how much I will be out for the year. All she knows is I will be paid a $10 each month, starting in march, along with a monthy bill, until the year is paid for in full. The total cost, or how much of my $296 went into paying the bill, she said she has no way of finding out.

She said her agency is confused because few customers ask what I asked for.

I asked her for a phone number to speak directly with the insurance company. Guess what? She was able to find that. So I'll make a phone call and come straight back here.

[Arthur Wildfire! March]

Being uninsured for a brief moment, for all I know, is being uninsured for the day, which bumps me to a higher insurance rate for not having a perfect chain of coverage, as I understand it.

[general_re]

Well, I can't speak directly to how the insurance system works in Virginia, but having dealt with something like this here in New York, let me suggest the following. I would call around for some quotes from new insurance companies, so that you have a firm quote in hand, and then drive over to one of them and float the check for the new policy - since your next stop will be the old agent to cancel the policy and demand a refund, you ought to be okay floating a check for an hour or two. Of course, then you take that refund check and immediately cover the new policy with it - no blowing it on beer or anything silly. ;)

That's one way, and that way you don't have a lapse in coverage, even for an hour. The second way to do it is to go to the old agent and get your refund first - don't leave without a check in your mitts, no matter what they tell you. The agent can issue a refund on behalf of the underwriter - agents do it all the time, although they hate to do it, and may try to persuade you to wait for a check in the mail from the underwriter. Don't listen to them. Then swing by the bank, deposit your refund, and go sign up for a new policy somewhere else.

Although you'd technically have a lapse in coverage for a few hours this way, AFAIK most states are concerned with the date coverage began and ended, not the exact time of day - although it would not be good if you got in an accident on your way from the old agent to the new one, so drive carefully. If the state of Virginia really gives you crap about a two-hour lapse in liability coverage, you need to move - even the grotty b*stards here in NY aren't that awful. But most likely, you'll get your new insurance card, which shows the start date as the same as the cancel date of the old policy, and as far as the state is concerned, there's no lapse, and you're golden.

Good luck, and ain't insurance fun? ;)

[motzman]

You're lucky you don't live in NJ (or ever lived in NJ)---your problem would be SO MUCH WORSE if you were here..

[Thane_Banquo]

She told me she simply can't say how much I will be out for the year.

That's BS. They know what their fees are. They know what you paid in. They can find out exactly what you'll be out. Don't let her tell you that.

[ContemptofCourt]

There are so many holes in ths story my head hurts....did you meet with an agent? Was the agent representing a particular insurance agency? If you changed agencies, did you fill out new paperwork? Did you pay with a check?

[general_re]

The total cost, or how much of my $296 went into paying the bill, she said she has no way of finding out.

Total BS. You've bought into a policy that costs about $600 a year, nearly as I can figure. That's about $12 a week - you've had the policy in effect for about a week now, so if you walk in and cancel today, you should be owed your $296, minus about $12 for the week that the policy has been in effect, or about $284.

You should definitely cancel and go somewhere else - either these people are idiots, or they're trying to screw you.

[ContemptofCourt]

FWIW, insurance coverage "begins" at 12:01 am....so if you cancelled your insurance today, you are still covered until 12:00 midnight...which allows you to go out today and pick up coverage somewhere else, which would then start at 12:01 am tomorrow.

Disclaimer: Although I am a lawyer, this is not legal advice.....

[Iron Eagle]

I would check the policy and be sure you DO NOT have a massive early cancellation penalty. My guess is, such a penalty is not permitted.

It sounds to me like you are dealing with a small insurance agency that acts as a broker. Dump them! Call them, cancel your policy and demand an immediate refund. (Tell them you will come down and pick up the check in person).

Call Geico or another insurance direct entity like progressive. With Geico, you can elect to pay your insurance monthly. Policies in the Commonwealth are 6 month policies. There is NO reason why one would be forced to pre-pay a years worth of insurance.

I pay my insurance through Geico, and I pay it monthly. (Admittedly, they charge like 1 dollar per month to bill you on a monthly basis, but I think the fee is worth it as I perfer to keep my money in my hand as long as possible!)

Make sure you have received a rider from Geico for your policy BEFORE cancelling your other policy, and make sure cancellation does not result in a penalty. If you continue to have problems with them, consult the Virginia Legal aid office and/or the better business Office.

Based on the facts as you have described them, this agency is trying to take you for a ride by demanding full payment for the year. You do not need to pay for insurance in that fashion.

[Arthur Wildfire! March]

I talked with the insurance company directly. I'm paying out a total of either $642 or $652. It isn't as bad as I had feared. But I am still being penalized with a total of $84 or $94 in late fees, and the amount could be over $55 more than I was told for the year.

"There are so many holes in ths story my head hurts....did you meet with an agent?"

Yes. And she took instructions from the man who was on the phone with my mother.

"Was the agent representing a particular insurance agency?"


They do business with numerous insurance companies.

"If you changed agencies, did you fill out new paperwork? Did you pay with a check?"

They kept me in the same company, telling me I would be paying $296 coverage for half a year.

[Arthur Wildfire! March]

TY for the information.

[savedbygrace]

Call the state insurance commission in Richmond. You'll get the right information there. Then call the insurance company and tell them you will be reporting back to the insurance commission. Their answers should improve.

[Arthur Wildfire! March]

I HATE insurance companies/agencies! They are beaurocratic nightmares with nannystate/socialist leanings.

[Arthur Wildfire! March]

TY. Ill do that.

[general_re]

Oddly enough, in many states, you do have options. Here in NY, the law requires proof of financial security in order to register a car - most people do that by purchasing liability insurance, but you can also post a bond with the commissioner of Motor Vehicles for the minimum liability amount (currently $50,000), and thereby avoid insurance companies altogether. Or, as many fleet owners (taxicab companies, limo companies, auto rental agencies, et cetera) do, you can self-insure if you have enough value in your stable of cars.

Not that this is a realistic option for you at the moment, but when you hit it big someday, you can ditch the insurance if you like. Just remember that you first heard this from your good friend general_re, if you're really rich ;)

[ContemptofCourt]

You are dealing with an insurance broker...that may be the root of your problems.

With insurance matters, I prefer to deal directly with an agent of the insurance company...when it comes to insurance, there are too many ways for the ins. co. to make your life rough that you need to know exactly who you are dealing with.

[iceskater]

Call the state insurance commission in Richmond. You'll get the right information there.

Their number is 804-371-9741. Also, you could call the Better Business Bureau and file a complaint with them. Not sure how much that will help but it's a thought.

[Boatlawyer]

Sounds like you are troubled by the financing terms. You thought the ins. co. was issuing a six month policy, but they issued annual coverage and are spreading the $300 balance out over some period at $47 per month (probably seven months, since most ins financing leaves you with a couple of "paid" months at the end. You said the annual premium would have been $600. You have paid $296 with I assume 7 payments of $47, or $329, which means you are paying about $25 in finance charges, which sounds pretty reasonable to me.

As for the purported $150 per month analysis, most ins. premiums are front-loaded, meaning that about 25% of what you pay is a non-refundable fee for issuing the policy.

[blau993]

Sorry, but this is not an appropriate post in the "articles" forum.

[Who dat?]

It sounds almost like there has been some confusion between the policy term versus payment plans to me...

You can often get policies with terms of three months, six months, or 12 months (sometimes even monthly), but it sounds like they think you want a 12 month policy with some sort of 2-pay payment plan (?). Do you have the bill they sent? Does it specify six months for a payment of $296? Or does it specify 12 months for one payment of $296 + second payment of $300 (or whatever) by a certain date?

Some companies only have 12 month terms, some only have six month terms, and some have any-number-of-months-combination you care to dream up.

It sounds to me like it's more of a matter of confusion than an effort to screw you around, but I could be wrong.

Usually you can cancel the policy whenever you want and get a pro-rated refund... if it comes to that.

[Capt.YankeeMike]

I beg to differ...I am a broker, I represent over 100 different life /health companies. Agents that are tied to one company (captive agents) are in a sucky position, they have to try and cram their clients into a very small range of products, often not the best deal for the client. A broker on the other hand can pick the best product to fit each individual client, from a wide range of different companies/prices/products.

Having said that, i also recruit and train hundreds of agents a year. The failure rate of insurance agents is 90% in the first three years. Finding an agent who knows what the hell they are talking about is tough, so many are just plain ignorant. Its scary, the average agent doesnt know diddly about insurance, and they are out there selling important products to people.....

[alisasny]

If your insurance expires at midnight on a specific day say January 14 and is reinstated on January 15th I dont think you had any lapse.

[rwt60]

I live in Virginia and one year ago I cut my auto insurance rates by 50 percent. How? I went to Insweb.com and compared quotes. I already had been using one of these so-called inexpensive insurers and I couldn't believe it when I dropped the cost by 50%. I just paid my second annual payment and the rate did not rise 1 cent after a year either.

[ContemptofCourt]

No offense meant, CYM....I like insurance brokers for certain types of insurance, but it sounds like this guy got one whose office does not know what is going on.

I agree that finding a good agent is a valuable resource, sometimes worth the extra $ in premiums.

[Arthur Wildfire! March]

I listed this under vanity/virginia. I also made the title clear enough that it shouldn't trick anyone. Besides, you don't think that manditory insurance abuse isn't an issue? Don't you see what is beginning to happen here on the FR? We no longer have to stumble around in the dark, making our best guess about things. I certainly can't afford to make too many financial mistakes right now. I wish I had asked for advice BEFORE making an insurance decision. Did you note the post by CaptYankeeMike? Agents mess up 90% of the time for the first three years! How on earth is a guy off the street supposed to know what's going on?

[Arthur Wildfire! March]

I would check the policy and be sure you DO NOT have a massive early cancellation penalty. My guess is, such a penalty is not permitted.

TY. I discovered a $40 partial payment fee. I was looking for a new agreement, not looking for a kick-me sign.

[Arthur Wildfire! March]

TY for the information. What a mess!

[Arthur Wildfire! March]

Wow! That is very impressive. TY.