Pay your Premiums!!

I know it sounds like a no brainer, but a lot of people have problems with this concept. I have to admit that I have been guilty of this is the past. There was a time that I would get a notice from my auto insurance company and cast it to the side with the attitude that I would get to it when I get to it. One time I never really got to it. I woke up one morning and thought to myself, "You know what? I haven't paid my auto insurance for a while I should check on that." Turns out we had been driving around for about 3 months without insurance. I went through my stack of old mail and found a cancellation notice. Oops. Luckily for us we did not have an accident during that time period, but I meet plenty of people who are not as lucky. My point is that it is very important to have the right kind of coverage, but if you forget to pay for it you could find yourself in a world of hurt.

Real Life Example:

I received a new claim the other day with the words "Pending Renewal" across the top. I got excited because this means a little extra investigating was in order, and frankly I enjoy that sort of thing. Turns out that the person in question is a Realtor, and was showing a house to a client when somebody came down the road and smacked into his car. Actually, his sub compact car was hit by a full size truck going about 40 miles per hour. The guy's car was totaled.

As it turns out, the guy who hit his car was hit by another car first, and the other driver did not feel it was necessary to stop and exchange pleasantries and insurance information. But my insured is not worried because he has collision coverage and rental car benefits. The only problem is that he forgot to pay for these coverages and his policy expired. The following is my conversation with Mr. Procrastinator:

Me: I'd like to go over your insurance coverages with you . . .

Mr. Procrastinator (interrupting): Oh I know how this works, I have collision coverage and rental car coverage. When can I go get my rental car? I really need a car bad right now.

Me: Well . . . here's the thing. Right now your policy is in suspense for non payment of premium.

Mr. Procrastinator: Oh yeah, we got the bill and have not paid it yet. We went on vacation and it slipped my mind, I'll pay it this afternoon. So can I get that rental car now?

Me: Well . . . you see it's like this. I have to wait until I get confirmation from the Underwriting Department that you had an in force policy at the time of the accident (thinking to myself: Which will never happen because you just told me you haven't paid your bill yet).

Mr. Procrastinator: OK. I'll pay the bill now and call you right back.

Me: Actually . . . it doesn't work like that. It will take them a few days to bring your account up to date. Then I have to wait to see if they will afford coverage (fat chance).

Mr. Procrastinator: So what do I do?

Me: There is nothing you can do except wait and hope.

Here is the problem. This guy thinks that once he pays for his insurance that it will become effective all the way back to when it was cancelled. He thinks that the insurance coverage will be retroactive. It is not. It can't be. If it were then we would all drive around without insurance until we got in an accident, then we would pay our premium and have coverage. Think about it.

Now this guy is done for because the insurance company for the guy who hit him will say it was not their fault because they were hit by another car that fled the scene. The responsible party can not be located, and this guy technically does not have insurance. And the best part is I get to write this guy a letter:

Dear Mr. I'm Glad I'm Not You,

I've got good news and bad news. The good news is we have concluded our investigation. The bad news is we are not providing coverage for this accident. Here's a tip: In the future you may wish to purchase a day planner or set your account up on auto pay to help with the payment of your bills. That way when you get in another accident you'll actually have coverage! If you like I can give you the numbers of other people who have suffered your same fate, maybe you can create a support group.

Hugs and Kisses,
Your Adjuster