Auto Insurance Claims: Auto Policy - salvage title, etc., salvage title, fabulous car

Question
2 Questions.  First, we really got screwed on a fabulous car - they totalled it just because turbo/engine got wet on flooded roadway - no other water damage or body damage.  Having it repaired but now it has a salvage title.  In trying to get less expensive coverage for all family vehicles, we found you cannot carry "full-coverage" on a "salvaged" vehicle.  Called ins. company and asked if this was true, they said yes. Longer story shorter.  They reduced coverage effective day I called but would not give refund because they said, had we had a claim, they would have covered it "fully."  Yeah, right.

Second, I did find less expensive coverage, called and requested cancellation with future effective date of about one week; they said I should sign and fax a written request.  I handwrote note with names, policy #s, request, etc. and faxed it, but forgot to "sign" it.  They never called and I assumed it was cancelled.  However, we never got a refund check and then when I got my bank statement I found they are continuing to auto-deduct from my bank acct.  I did not receive a phone call from person I faxed it to telling me I forgot to sign it and that they would cont. to rip me off until then.  (If hind-sight were fore-sight -- I would, of couse, have contacted the bank at the same time since it was auto-deduct, I should have realized they are not truly "reputable.")

Does that sound legal / legit?  Any recourse?
Thank you,
Sami

Answer
Hi Sami,
Because your car was totaled, the insurance company should have eliminated the comprehensive and collision as of one day after the loss and provided a refund on those coverages for the balance of the policy term.  The only exception to this is if less than 30 days remained on your policy term.
In many states, insurance companies will not put full coverage on 'salvaged' vehicles because their value is considered reduced by 50% due to the salvage title.
By now you should have your new policy in hand.  Take the policy and go into the insurance office and allow them to see, and possibly copy, your new policy showing the date that new coverage went into effect.  They will then be willing to take a SIGNED cancellation as of the new policy effective date and provide you a refund of any unearned premium.
Most companies use a 'short-rate' cancellation method when you cancel a policy before it's expiration date which involves a percentage penalty based on the time left on the policy,  instead of a pro-rata cancellation which only charges for the exact number of days of coverage.
You can read the legal definitions in your policy to see which method will apply.
I agree that someone failed their responsibility to notify you that you had forgotten to sign your faxed copy.
But showing them your new policy and having the old on cancelled as of it's effective date will resolve these issues.
I hope this has been of help, please write again if I can provide more assistance.
Your feedback by rating my answer will be appreciated.
Sincerely,
Bennie
San Francisco Bay Area 10-22-07 5:27 PM PST