by anesha26 » Tue Aug 10, 2010 05:10 pm
I'm an agent, and I deal with a lien holder who will not "accept" insurance through certain carriers. Do they have the right to dictate which company their client choose? Can they, legally, deny the sale because of this?
Posted: Tue Aug 10, 2010 05:12 pm Post Subject:
Sure... they have a right not to sell their products and there is nothing illegal about requiring certain insurance. Though, I've not known a dealership to walk away from cash in hand.
Posted: Wed Aug 11, 2010 07:16 am Post Subject:
I've heard about people requiring certain insurance or even people not willing to accept insurance through specific carriers. But I haven't heard of someone compelling you to go for a certain carrier. It would be wonderful if someone comes here and shares such experiences.
Posted: Sat Sep 11, 2010 11:39 am Post Subject:
Though, I've not known a dealership to walk away from cash in hand.
Yeah, it usually doesn't happen that way. May be there are a couple of other reasons that are yet not shared with us.Posted: Sat Sep 11, 2010 12:59 pm Post Subject:
I'm an agent, and I deal with a lien holder who will not "accept" insurance through certain carriers. Do they have the right to dictate which company their client choose? Can they, legally, deny the sale because of this?
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Based on your post, they are _Not_ dictating which company their client can choose.
I'm going to guess they have had problems with a few Insurance Companies (bad claims handling practices) and will no longer expose themselves to the bad claims handling practices of these few Insurers. But [again] based on your post their client can choose _any other_ companies they wish. Which I doubt would be Illegal.
Just my thoughts.
Posted: Sat Sep 11, 2010 01:11 pm Post Subject:
I'm an agent, and I deal with a lien holder who will not "accept" insurance through certain carriers. Do they have the right to dictate which company their client choose? Can they, legally, deny the sale because of this?
______________________________
Based on your post, they are _Not_ dictating which company their client can choose.
I'm going to guess they have had problems with a few Insurance Companies (bad claims handling practices) and will no longer expose themselves to the bad claims handling practices of these few Insurers. But [again] based on your post their client can choose _any other_ companies they wish. Which I doubt would be Illegal.
Just my thoughts.
PS, Lori When I made the above (guest) post I didn't realize my "Log-in" had been bumped Off. If you can delete the first one please do. FK,
Posted: Sun Sep 12, 2010 01:27 pm Post Subject:
I deal with a lien holder who will not "accept" insurance through certain carriers. Do they have the right to dictate which company their client choose? Can they, legally, deny the sale because of this?
Can't speak directly to the laws of other states with which I am much less familiar, but in California, there are specific laws that could prevent such actions on the part of the lender. It is a crime to force a consumer to do business with only one company unless no other company can offer equivalent coverage under equivalent terms and conditions.
To paraphrase the actual section of Code, a lender cannot force a person to obtain insurance from any specific company or through any particular agent, even if they own an insurance company and employ its agents. They can indicate certain attributes about an insurance company's product (that perfectly describes their own) in a way that only coverage offered by one company with such attributes is acceptable. The likelihood that only one company will meet those attributes, however, is almost zero.
Generally, it prevents a lender from refusing to accept coverage that meets its requirements (as to amount or type of coverage) from any admitted insurer in the state. That description cannot be discriminatory (i.e., a policy from a minority-owned company to the exclusion of others), or on the basis of assets and reserves (that the insurer must have minimum assets of $250,000,000), which makes it nearly impossible to maintain exclusivity. It certainly cannot be about domicile or ownership or control (but it obviously could have everything to do with being an admitted insurer). They could include a requirement for a particular aspect of coverage that all other insurers would exclude, as long as that was not unlawful, discriminatory, or contrary to public policy).
And it cannot be based solely on things like "bad claims handling" on the part of a single company.
The whole point, under California law, is to give consumers a greater freedom of choice when it comes to the insurance companies with whom they do business.
I would not be surprised that many states have adopted similar legislation, but I would also not be surprised if some states' insurance laws are not a "consumer friendly" as California's sometimes appear to be.
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