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 Posted: Tue Apr 21, 2009 9:01 pm Post subject: check bounced for insurance now will not pay claim ..help! |
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| I had taken out an insurance policy on my husbands motercycle. I paid by check at the end of June 08. On July 16, 08 my husband was in a wreck. On July 18 I received noticed my check had not cleared. I called that day and paid by credit card. I received notice the next week that they would not pay for our claim. They canceled my insurance and sent my money back. Do they have the right not to pay our claim? What should I do? |
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kgram
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| Posted: Tue Apr 21, 2009 9:23 pm Post subject: check bounced for insurance now will not pay claim ..help! |
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If it was the first payment, yes. The policy is a legal contract. A contract does not exist unless there is compensation. So if the initial payment was not made (problem with the check) then the contract is void.
What should have happened is you should not have been allowed to make the follow up payment on the same policy as it was invalid at that time. I'm guessing the person taking the payment did not know what the status of the policy was. |
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tcope
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| Posted: Wed Apr 22, 2009 6:01 am Post subject: |
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| Quote: | | They canceled my insurance and sent my money back. Do they have the right not to pay our claim? What should I do? |
If the coverage wasn't in force at the time of accident the insurer isn't liable to pay out the claim.
Wasn't there enough money in your accout when you wrote the check to the insurer?
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bandit baby
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| Posted: Wed Apr 22, 2009 7:22 am Post subject: check bounced for insurance now will not pay claim ..help! |
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| what reason have they given to cancel ur policy....... |
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SuperAgent
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| Posted: Wed Apr 22, 2009 7:28 am Post subject: |
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| what is the freelook period in ur policy.....coz if ur date of cancellation is within the freelook period then insurance company has all rights to cancel ur policy for any reason........and further not pay ur claim.....sorry dude.........but still i wanna know what reason have the company given to cancel ur policy......... |
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SuperAgent
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| Posted: Wed Apr 22, 2009 8:51 am Post subject: Free look period |
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Super Agent,
Sorry to tell you but the free look period is for customer's benefit not for the convenience of the insurer.Generally 15 days free look period is provided (I suppose in US it is 10 days) and customer can cancel his policy within these days and has the right to ask for the all premium refund.
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Amit1
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| Posted: Wed Apr 22, 2009 1:51 pm Post subject: check bounced for insurance now will not pay claim ..help! |
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| The insurance company did not give reason for cancellation. We use a credit union and it is all on line. I printed the statement but it does not show the check. I am not sure I am reading it correct. I have contacted the credit union to clairify. I sounds like I am out of luck. |
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kgram
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SuperAgent
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| Posted: Thu Apr 23, 2009 5:53 am Post subject: |
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I don't know of any auto insurance policy that has a free look period. They're usually reserved for life/health/annuity contracts. If anyone has any knowledge (please be pointedly specific) I would appreciate the info.
I bet you can't find one. Show me the statute. 
As to the OP- you're not covered. My hunch is that you made up for the "uncleared" check by using your credit card. The unfortunate reality is that the insurer probably reinstated your contract with your credit card payment ONLY because customer service (who you probably talked to) wasn't aware of the wreck, and more than likely didn't ask you if one had occurred, and you certainly didn't volunteer the info. Had they known about the accident, they probably would not have reinstated the policy.
So, if you made the credit card payment on the 18th, and the wreck was on the 16th, your coverage was reinstated on the 18th and was not in effect on the date of the wreck, so- no coverage. Sorry.
Other posts are correct as well- there must be a completed contract, which includes your payment, and your payment must be negotiable, which it wasn't. Your coverage did not take effect until you made that credit card payment, and to add to your potential misery (sorry again)- there's a good possibility that once they hear about the wreck, they'll cancel you. They normally have a 60-day underwriting period at renewal, inception and in some states, following an accident, which mean that they have that long to decide whether or not to "keep you."
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InsTeacher
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