Is My Insurance Agent on Crack? (1 Viewer)

[Jason Hughes]

Today I bought a new car, nothing special, just a Saturn Ion. Agent quotes me (approx.) $100 per month. Kind of a rip, considering I have driven for over 15 years without so much as a parking ticket or any type of warning from a cop. Whatever, fine I say.

I have been paying (approx.) $50 per month for more-or-less the bare minimum to put my old '92 Chevy Cavalier on the road...again a bit high, but whatever, not the end of the world. I was paying the $50 monthly, at the beginning of each month and always on time.

Now my agent (and it's one of the big ones, Allstate, State Farm, etc, won't say which at this point) tells me they are charging some fee based on the difference between the two policies. In other words, I am paying $900 on my Saturn for the next 6 months, even though they quoted me $600. Essentially they want me to pay another six months worth on a car for a car I no longer even own. I asked how the calculated this. They told me when you buy a new car, they take the difference between your old premium and the new premium and charge you the differnce (in addition to your new premium amount). Obviously, charging you the difference would make sense if you paid your insurance 6 months or a year in advance. But in addition????

I could not believe my ears, and I had them explain this to me several times. Still did not make any sense. Essentially they told me that $100 x 6 = $900. Yup, was the response. Oh, and they are so, so kind, they will let me pay the extra $300 over the next three months.

Since I was at the dealership and needed proof of insurance so I could get out of there, I said whatever, fax the proof.

What possible justification could they have for this? I know insurance companies answer to no one, but I think the agent literally was on crack or something....

Is there something I am missing. Obviously I need to find a new agent, but what essentially amounts to a $300 service fee seems like the work of a madman.

 

[Joseph DeMartino]

Actually insurance companies do answer to someone - in most states the state insurance commissioner or similar officer, and ultimately to the state legislature. Michigan's regulatory agency is part of the Department of Labor and Economic Growth I would give them a call. I'd also call around to other insurance companies (not to mention checking on-line) to get competitive rates. Even though you've purchased a policy you should be able to switch companies and cancel the policy you felt pressured into buying. (You'll have to pay a pro-rated fee for the acutal days they cover your vehicle and possibly a cancellation fee - that's something else to check with the state rather than your agent.)

In any event I suspect you'll get a lot more useful information there than you will on this forum. We're apt to be sympathetic, but I doubt any of us is going to know as much about car insurance in Michigan as the staff in the office that regulates the industry there.

Regards,

Joe

 

[alan halvorson]

I used to work as a programmer for a small insurance company in Minnesota that wrote PA policies. That doesn't make me an PA expert but I do know a little bit, although I know squat about the laws in Michigan.

You've replaced your auto but your insurance company is charging you for both? Tain't legal in Minnesota and I'll bet not in Michigan. In Minnesota, if you replaced your auto midterm, you would owe on the previous auto only to the day it is replaced and then the policy would be re-rated using the new auto. Now, in insurance, there is something called the Annual Premium and the Billed Premium. At renewal, these premiums are equal to each other but when a change is made within a term, they aren't. The Annual Premium is the premium for a coverage assuming it was on the policy the whole term. The Billed Premium is the pro-rated portion of the Annual Premium, the portion you are charged.

Now it's up the billing system. The billing system may not work like you think it works. I know - I've written a couple. Insurance billing is not like other billing. Insurance billing systems can be simple or, like the ones I wrote, quite complex, and sometimes they seem to defy common logic.

Your agent may be confusing Annual and Billed Premiums; he may not understand how your insurance companies billing system works. Or Michigan may be a very strange state. But I'll bet when you get your actual bill, everything will be all right.

 

[Philip_G]

don't get me started on auto insurance

 

[Linda Thompson]

Here's the insurance page at their website:

http://www.michigan.gov/cis/0,1607,7...6774--,00.html

It includes some contact phone numbers for various issues...might be a place to at least get started.

 

[Jason Hughes]

Thanks for the input...

 

[Scott Merryfield]

Jason,

I've switched vehicles in mid-policy numerous times and have never heard of such a thing. I've had State Farm auto insurance for over 20 years, and each time we sell/buy a new vehicle, the balance of what I had paid for the old car was applied to the new one once I cancelled insurance on the old car (I pay every six months).

 

[Julian Reville]

Yep, either the guy didn't explain the charges properly or they are trying to screw you.

You need to change your insurance company right now. Few seem to reward loyal customers. I have had the same company since 1978, and when I had 1 wreck, they jacked the hell out of my rates for a couple of years. It's reasonable now, and actually dropped from $480/6mons to $360/6mons this billing term, for my not-yet-paid-off 2001 Montero Sport. But for a while there I was calling every insurance agent in the book.

 

[Joe Szott]

Sounds like it's time to get a new insurance agent to go with that new car.

 

[Joseph DeMartino]

P.S.

In answer to your original question, "Yes, your agent is on crack". At least what he's trying to do is illegal in every state where I've ever owned a car, and I would think in Migchigan as well. Unless there's something else going on here that none of us knows about, they can't charge you for the old car you no longer own plus the new car you just bought.

Regards,

Joe

 

[Ted Lee]

paging matt butler ... who i believes works in the car insurance biz ... paging matt butler

 

[Kirk Gunn]

Eric Idle: "It's about this letter you sent me regarding my insurance claim."

Michael Palin: "Oh, yeah. Yeah, well, ya see, it's just that we're not as yet, uh, totally satisfied with the grounds of your claim."

Idle: "But, it says something about filling my mouth in with cement."

Palin: "Ah, that's just insurance jargon, ya know. It states quite clearly that no claim you make will be paid."


Good Luck ! We switched to USAA a while back and have been very satisfied with their rates and service.

 

[Jason Hughes]

Thank for the (often humorous) input...I talked to the agent in charge of the office and he straightened everything out...I owe another $50 to get my 1 payment reserve up to where it should be, but that is it. When I explained what he is agent working for him was spewing out, he rolled his eyes and said, "Oh God..."

 

[Carl Johnson]

Years ago after I had an accident State Farm jacked my rates up which tempted me to shop around. This is hard to believe but my rates thru Progressive after the accident were cheaper than what I was paying State Farm before the accident. Shopping around will likely save you hundreds.