Auto Insurance Claims: Accident-Insurance cancelled, state insurance commissioner, cancellation notices

Question
Dear Dr. Settlement,    I am in a different situation.  I have had insurance with Multi-State for serveral years and have always paid my premiums.  The first of February I sent the company a change of address from my parents house to my home where my new wife and I live.  Previously I would stop by my parents and pay my insurance bill (my mother did my book keeping for my contractors business).  I have been working over 14 hours a day and felt it would help to have my wife pay my bills for me.  On March 17 I was going west down the street with the sun straight in my eyes.  A glare blinded me.  When it passed a vehicle was stopped in the road and I rear ended it.  Because my large truck was pulling a trailer and loaded with a quad Motorcyle, and all my work equipment, I was carrying a lot of weight and totaled the car I hit and damaged the front of my truck.  When I called in the claim to my inurance company, they told my that I had been cancelled because I did not pay my premium.  My mother stated that no bill had come to her house and my wife said nothing came to our house.  They both thought the other was receiving the bills.  I have previously had months where I have not received a bill from this company and have had to write them letters of complaint.  I have received no cancellation notices.  They told me that I wouldn t have received anything from them because that month was my policy renewal.  I am devistated by this.  Any suggestions on what I can do.  I could lose my contractors license and business if I am sued.  Help!  I would appreciate any advice.    Jeremy Claunch

Answer
Dear Jeremy,

There are hundreds of stories just like yours each year.  It seems that all the goodwill just seems to disappear when it comes time to honor contractual obligations.  

You need to file a complaint with your state insurance commissioner http://www.settlementcentral.com/links.php ASAP.

Also, be asking about for an attorney who can handle this matter ASAP if you do not get a favorable response from the insurance commissioner.  When you file the complaint, send a copy certified mail to the supervisor of the claims department and she can lean on the administrative folks to see if coverage can be extended.

Your state will have regulations governing the type of notice that is required prior to canceling a policy.  That was not given in this case, and the company contends in any event that no notice was required since it was a renewal month.  

So the remaining issue is whether or not notice must be given for renewal or for a decision not to renew.

In this respect, the historical course of action between the parties (i.e. they always just renewed the policy with no correspondence whatsoever) can become part of the contract between the parties.  Thus, you can argue that you relied to your detriment upon their past course of action of always automatically renewing.

The insurance company may or may not have to offer you a renewal opportunity.  In other words, they could say, "We pulled this guy's record and decided not to send him a renewal opportunity because we found out he is less than 6 feet tall."  OK, let’s just pretend for a moment that they could deny you a renewal on such a silly basis.  

Be sure to put in the history of their mismanagement of the mail in the past.  It may be "old" but it goes to the heart of the issues in this claim.  They just goofed up.  And the renewal date is just a convenient excuse to get out of their obligation to you.  

The issue is this: IF THEY DECIDED NOT TO RENEW YOU, THEY NEED TO LET YOU KNOW IN ENOUGH TIME TO BUY SUBSTITUTE INSURANCE.  You would have the right to rely upon your past course of dealing and to thus understand that they would be sending a bill for the renewed policy without your having to take any action whatsoever, just as they always had done in the past.  

IF YOU GET A NOTICE of a personal injury claim or property damage claim FROM THE ONE YOU HIT REGARDING, SEND IT ASAP VIA CERTIFIED MAIL TO YOUR COMPANY WITH A LETTER TELLING THEM THAT IT IS THEIR DUTY TO DEFEND YOU AND HOLD YOU HARMLESS ON THIS CLAIM.   They should do so under what is called a "reservation of rights" letter or agreement.

Communicate with the adjuster in writing. Let him know that you are FIRM IN YOUR RESOLVE to get what you are demanding (NOT "asking").

Remember these tips, do your homework, print out your evidence, show resolve to get your fair settlement, and you will DO JUST FINE.

I trust that my time here has produced some information that has been of value to you, and thus I would respectfully request that you locate the feedback form on this site and leave some feedback for me.

Best Wishes,

Dr. Settlement, J.D.
http://www.SettlementCentral.Com