Must I pay? How long can an insurance co charge you for a policy you didn't want, but automatically renewed?
This year I paid off the mortgage on my house. I put the house up for sale, and I decided that after the homeowners insurance would expire, I’d risk going without renewing it, since I never filed even one claim in 15 years. I didn’t take the time to cancel the insurance, because I thought that the policy would automatically cancel if I didn’t pay it. The house was sold four months after the expiration date of the homeowners insurance, but the insurance company insists that I must pay them for the four months (which comes to 4) because the policy automatically renewed. I refused to pay it, so they have turned me over to collection. Do I need to pay it? What happens if I ignore the collection notice?
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September 11th, 2010 at 1:39 pm
Well, of COURSE you have to pay. You didn’t take the time to cancel the insurance. The policy did NOT automatically cancel, likely because your state insurance department doens’t allow it.
If there HAD been a fire, and the insurance company would have been required to pay, they are ALLOWED to go after you for the premium.
If you don’t pay, they will sue you, and win.
September 11th, 2010 at 1:39 pm
if you ignore them then you screw your credit.
September 11th, 2010 at 1:39 pm
You can cancel at anytime usually.. but if you did not cancel you still need to pay the amount you used.. Even if you didn’t mean to, you had coverage and need to pay for that..
But if you still have it and don’t want to pay for it anymore you need to call your insurance company and cancel the policy..
September 11th, 2010 at 1:39 pm
You pay it now, or you will be black-listed in the insurance world and you will never get insurance for anything again.
Cardinal rule of insurance "Pay Your Premiums" and "All cancellations must be in writing"
September 11th, 2010 at 1:39 pm
What did the policy state? Does it have automatic renewal in it? If so, you have to pay. If not, it should have canceled upon renewal.
September 11th, 2010 at 1:39 pm
I was able to neogiate a slight reduction in the amount, because i could prove that i had other coverage and the polic had not yet reached its renewal date. Did you EVER receive a billing notice? Was the insurance paid by your lender while you were paying the mortgatge? IF you can demonstrate that you NEVER received notice of the premium being due, and if state law allows the cancellation of the policy for non-payment of premium, you could argue you owe less than the four months of premium. But you will most liikely have to pay something. Their failure to notify you is probably the strongest argument you have, if you can prove, through the insurance company’s procedures, that they never billed you. But, since you just sold your house, you can’t effectively plead poverty, and they like to collect their money. As was noted above, if you had had a claim filed, they would have come after you for the money.
Your failure to manage your affairs thoroughly and effectively does not excuse non-payment for an honest mistake. Under the terms of the contract, you owe the money.