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Tom M.
08-16-2004, 04:25 PM
Hi, I am in need of serious help in California.My insurance Co. says
my payment check (by mail) was delivered to them 12 days late ( based
on the postmark) therefore there is a 12 day lapse in the policy with
no coverage .A driver hit my car during this so called lapse period.
The other driver, even though at fault, sued me for $250,000. My
Insurance refused to intervene. I had to hire an attorney to defend
myself. After 2 years of aggrevation and a cost of approx. $70,000 ,
the court and the jurors fond us not liable for the accident. The
Insurance Co. still refuses to talk to us. What is their
responsibility? USPS says they are not responsible for late delivery (
because they do not even guarantee delivery period), we were not
informed by the insurance Co. that they had not received the payment
as of the expiration date yet, otherwise we could have delivered a
cashier's check to them on the spot. we have 4 cars under this policy
and we were all at risk during these 12 days, this is how everybody
pays their payments, depending on the distance , the check is mailed
with first class mail. We all expect a normal few days to get there.
Are people suppose to call the Co. to see if their payment has been
received and cashed? on time? do people know this? does this make
sense? how could insurance companies put us at such a high risk
without explaining it? do you know how many pieces of mail is lost or
delivered late every day? I need help. Thanks.

Michael Jacobs
08-19-2004, 07:08 AM
tom@tarbell.com (Tom M.) wrote in message
news:<83g2i0d135t6aehlbio8bn253ne92lsdnu@4ax.com>...
Hi, I am in need of serious help in California.My insurance Co. says my payment check (by mail) was delivered to them 12 days late ( based on the postmark) therefore there is a 12 day lapse in the policy with no coverage.

You have to make sure they _receive_ payment before the policy period
ends. It's your responsibility, not theirs, to make sure it is
actually received by them, not just put in the mail. That means, to
be safe, you need to either mail it far enough in advance so you can
get a receipt _back_ from them (they do mail you back a receipt,
right, when you mail in your payment?) _before_ the end of the policy
period, and/or go to the agent's office in person to make your payment
if you haven't gotten a receipt back before the policy expires. Or
check the status of your payment online -- most ins. co.s offer that
option now.

A driver hit my car during this so called lapse period.

"So called" because your insurance had in fact lapsed. Unless your
state law has a statute that specifically gives you some "grace
period" before lapse can occur, you are S.O.L. Many states have such
a law about health insurance, but few offer such protection about car
insurance. Car ins. is for a specific period of time, and is not
considered to be something that continues indefinitely until you tell
them to stop. The effective dates are listed right on the front of
your policy. When you "renew" you are in effect buying a new policy
to cover the next chronological period. But only a foolish ins. co.
would willingly sell you ins. to cover a wreck that had already
happened by back-dating the policy to the date you say they should
have received payment, instead of the date they actually received it.
As far as the ins. co. knew, you had either sold your car, gotten too
old to drive, gotten new ins. from a different co., or whatever --
that was your business, not theirs. All they knew, and were entitled
to rely on from the moment your ins. policy expired, is that _they_ no
longer insured your car.

The other driver, even though at fault, sued me for $250,000. My Insurance refused to intervene.

They only have a duty to defend if you own a policy from them that
applied to the date when the wreck occurred. You didn't, so they
denied coverage and rightfully refused to provide a defense.

I had to hire an attorney to defend myself. After 2 years of aggrevation and a cost of approx. $70,000 , the court and the jurors fond us not liable for the accident.

I'm glad you were successful. The "transaction cost" of prosecuting
and defending claims is a major part of the cost of car wrecks, for
both the victims and the ones sued. That's why it's important to have
insurance in effect even if you are a very careful driver and don't
expect to lose a suit -- even the cost of defending a suit can be
ruinous.

Insurance Co. still refuses to talk to us. What is their responsibility?

None, unless an exception applies as stated above. If _you_ were a
shareholder in the ins. co., would you want them throwing the
company's (your) money away on defending someone who didn't even own
an applicable policy? It's not a matter of compassion or courtesy;
they're in the business of spreading risk by collecting relatively
small premiums from each of their insureds based on their calculation
of the percentage probability that something bad might happen to you,
and then paying claims to those who actually do suffer a loss during
the policy period. You're asking them to cover a "risk" that is no
longer a percentage risk, but is mathematically a 100% sure thing
because it already happened. That's like betting on the horse race
after it's run. They won't do that.

USPS says they are not responsible for late delivery ( because they do not even guarantee delivery period), we were not informed by the insurance Co. that they had not received the payment as of the expiration date yet, otherwise we could have delivered a cashier's check to them on the spot.

On what spot? When they told you, _after_ the policy had expired?
You still would have had a lapse period, during which you would not
have been covered. You still could have picked up the phone, or
checked online yourself, on the first day the new policy would have
been in effect, to make sure it actually was (i.e. that they had
received your payment). That was your job, not theirs. They aren't
going to come running after you; people change insurance carriers, or
intentionally drop their coverage by failing to renew, for a variety
of reasons, all the time.

we have 4 cars under this policy and we were all at risk during these 12 days, this is how everybody pays their payments, depending on the distance,

There's also wire or online transfers, Federal Express, Express Mail,
Western Union..... Even if the policy renewal form says to mail it to
a distant state (where the ins. co. probably has a low-paid boilerroom
staff opening and processing their premium payments), didn't you buy
your car ins. from an agent with a local physical location?
F'rinstance, I either mail my payments to my ins. co.'s head office in
Illinois, or hand deliver it to my agent whose office is in the
village shopping center. I usually do the latter; he records it as
"paid" immediately, but then still has to mail it off to Illinois.
Best of both worlds: you get the float, and you get the immediate
coverage.

the check is mailed with first class mail. We all expect a normal few days to get there. Are people suppose to call the Co. to see if their payment has been received and cashed? on time?

Yes. It's legally your responsibility, if you care, not theirs. Not
that hard to make a phone call to confirm receipt of payment.

do people know this?

I would hope so. I'm honestly sorry you didn't, but that doesn't
change the ins. co.'s lack of fault in this matter.

does this make sense?

Yes, for all the reasons stated above.

how could insurance companies put us at such a high risk without explaining it?

They don't know you're at risk. As far as they know, you either quit
driving, or bought insurance from somebody else. You got what you
paid for from them -- coverage from the first to last day of your
policy -- but you were a non-repeat customer. That's all they know.

do you know how many pieces of mail is lost or delivered late every day? I need help. Thanks.

Hasn't your atty who represented you in defense of the other driver's
claim already given you advice about whether you have any chance at
all of pursuing the ins. co. for payment? What did he say? Sorry,
but you probably won't find any different advice here either, I'm
afraid.

BTW, didn't it ever occur to you, or your atty, that offering a
dimes-to-dollars settlement to the other driver would have been far
cheaper than battling them tooth and nail all the way to a contested
trial? Didn't the other guy have "uninsured motorist" coverage that
should have paid him for his injury in cases like this? Your story
is a very sad reminder that the law is an imperfect instrument for
solving problems like yours. Sometimes compromise is the only
sensible solution, or you could wind up going broke just to prove a
point.

--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.

Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300

John F. Carr
08-23-2004, 07:23 PM
In article <01d9i01mfujguujl5hsejpu1hspgolq2oh@4ax.com>,
Michael Jacobs <mjacobslaw@comcast.net> wrote:
tom@tarbell.com (Tom M.) wrote in messagenews:<83g2i0d135t6aehlbio8bn253ne92lsdnu@4ax.com>...
Hi, I am in need of serious help in California.My insurance Co. says my payment check (by mail) was delivered to them 12 days late ( based on the postmark) therefore there is a 12 day lapse in the policy with no coverage.You have to make sure they _receive_ payment before the policy periodends. It's your responsibility, not theirs, to make sure it isactually received by them, not just put in the mail. That means, tobe safe, you need to either mail it far enough in advance so you canget a receipt _back_ from them (they do mail you back a receipt,right, when you mail in your payment?) _before_ the end of the policyperiod, and/or go to the agent's office in person to make your paymentif you haven't gotten a receipt back before the policy expires. Orcheck the status of your payment online -- most ins. co.s offer thatoption now.


Here's how it works here in Massachusetts. Insurance companies do not
necessarily send receipts. If you miss a payment you get a past due
notice. If you still don't pay the insurance company sends a notice of
cancellation, which states that insurance will be terminated without
further notice in approximately one month unless payment is received.
If payment is received after a notice of cancellation, then the
insurance company sends a notice rescinding the notice of cancellation
(subject to re-cancellation without notice if the check bounces). When
renewing a policy you do not need to pay in advance; only new policies
require pre-payment.

The state wants drivers to be insured so they have laws that make it
hard to accidentally become uninsured.

I just remembered an episode of "All in the Family". Edith forgot
to mail the mortgage payment. At first this didn't seem like a big
deal because there is a grace period, but Archie had been banking
on the grace period and had planned on payment being mailed on the
last possible day before default.


--
John Carr (jfc@mit.edu)

David S Chesler
08-28-2004, 09:54 PM
[Google ate my first attempt. I see John F. Carr has since made
some similar points, with which I agree, also based on a state with
mandatory auto insurance.]

mjacobslaw@comcast.net (Michael Jacobs) wrote in message
news:<01d9i01mfujguujl5hsejpu1hspgolq2oh@4ax.com>...
You have to make sure they _receive_ payment before the policy period ends. It's your responsibility, not theirs, to make sure it is actually received by them, not just put in the mail. That means, to be safe, you need to either mail it far enough in advance so you can get a receipt _back_ from them (they do mail you back a receipt, right, when you mail in your payment?) _before_ the end of the policy period, and/or go to the agent's office in person to make your payment if you haven't gotten a receipt back before the policy expires. Or check the status of your payment online -- most ins. co.s offer that option now.

The typical consumer does not do this half a dozen or more times
each month (for the car insurance, the mortgage, the electric company,
the gas company, local phone company, the long distance phone company,
the cell phone company, the cable TV, the newspaper, and so forth,
not to mention the credit cards.) If a payment is lost in the mail,
it gets corrected the next month. If there's a penalty, it's on the
order of the cost of more secure delivery for two or three of the
payments.

A driver hit my car during this so called lapse period. "So called" because your insurance had in fact lapsed.

Unless the payment was available to the insurance company, like
in its lockbox, or otherwise at the point where it was considered
paid.

Unless your state law has a statute that specifically gives you some "grace period" before lapse can occur, you are S.O.L.

Or a law that the payment is considered "made" earlier than
what the insurance company is stating, such as when it is mailed.


Car ins. is for a specific period of time, and is not considered to be something that continues indefinitely until you tell them to stop.

Perhaps as a strict matter of law (and if course the company will
pound on the law if that's on their side) but in practice people
keep with the same insurance at renewal time much more often than
not. In a state with mandatory auto insurance, letting insurance
lapse is a big deal. A good company does not figure "It's 12:02 A.M.
and we don't have a check, he must have decided to get his insurance
elsewhere; we'll notify the DMV so they can suspend his registration."
They figure "We make our profits by having satisfied, repeat customers,
so we'll work with him." (Yes, knowing that there is an insured loss
changes the equation.)

But only a foolish ins. co. would willingly sell you ins. to cover a wreck that had already happened by back-dating the policy to the date you say they should have received payment, instead of the date they actually received it.

Most of the time they would exactly back-date the policy to the renewal
date. (Suppose the payment is due on the 1st. If they get the payment
on the 10th, and there are no claims, are they going to say "You had no
insurance from the 1st through the 9th, so this payment covers you from
the 10th until the 10th of {next month|this month next year}"?) This
was on an episode of The Guardian: It had been the fire insurance
company's practice to accept late payments, which it happily did,
until the time when there was a loss during a time when a payment
was overdue, and at that time they switched to a strict cash practice.
(Dabney Coleman took the president of the insurance company out to
golf, or beat him up, or something and took care of it.)

As far as the ins. co. knew, you had either sold your car, gotten too old to drive, gotten new ins. from a different co., or whatever -- that was your business, not theirs.

This is as best, as I said, a legal fiction. Depending on the
Original Poster's state, this type of thing may be frowned upon.

None, unless an exception applies as stated above. If _you_ were a shareholder in the ins. co., would you want them throwing the company's (your) money away on defending someone who didn't even own an applicable policy?

I would if I thought it was being penny wise, pound foolish.

we have 4 cars under this policy and we were all at risk during these 12 days, this is how everybody pays their payments, depending on the distance,

What did the insurance company do for the other 3 cars that were not
involved in an accident during the 12 days?

They don't know you're at risk. As far as they know, you either quit driving, or bought insurance from somebody else. You got what you paid for from them -- coverage from the first to last day of your policy -- but you were a non-repeat customer. That's all they know.

And again, what's more likely, that the mail got delayed, or that
the customer decided to change from having 4 cars insured (for the
sake of argument at well above the legal minimum) to being uninsured?


--
- David Chesler <chesler@post.harvard.edu>
Iacta alea est

Michael Jacobs
08-31-2004, 02:39 PM
chesler@post.harvard.edu (David S Chesler) wrote in message
news:<k5o2j051ub7g6fsbunvuqju598ngq9dj9h@4ax.com>...
[Google ate my first attempt. I see John F. Carr has since made some similar points, with which I agree, also based on a state with mandatory auto insurance.]

_AND_ it's also a state with a statutorily mandated renewal grace
period built in, which is the point that matters. MD has mandatory
insurance too, but no required grace period at the END of a policy
term. They do require the ins. co. to notify the policyholder several
days before an intended cancellation of insurance for other reasons,
including a lapse for non-payment of premium DURING a policy period
(where e.g. monthly payments are being made and the policy has not yet
expired).

A driver hit my car during this so called lapse period. "So called" because your insurance had in fact lapsed. Unless the payment was available to the insurance company, like in its lockbox, or otherwise at the point where it was considered paid.

I agree. If that had happened, OP's policy would not have lapsed.

Unless your state law has a statute that specifically gives you some "grace period" before lapse can occur, you are S.O.L. Or a law that the payment is considered "made" earlier than what the insurance company is stating, such as when it is mailed.

Sure. Which OP's state apparently didn't have. But he certainly
could consult a local atty in his state to make sure the ins. co.
isn't lying to him about the effect of local law.

Car ins. is for a specific period of time, and is not considered to be something that continues indefinitely until you tell them to stop. Perhaps as a strict matter of law (and if course the company will pound on the law if that's on their side) but in practice people keep with the same insurance at renewal time much more often than not. In a state with mandatory auto insurance, letting insurance lapse is a big deal. A good company does not figure "It's 12:02 A.M. and we don't have a check, he must have decided to get his insurance elsewhere; we'll notify the DMV so they can suspend his registration." They figure "We make our profits by having satisfied, repeat customers, so we'll work with him." (Yes, knowing that there is an insured loss changes the equation.)

That's exactly the point.

If OP's insurer had received his check late, and there had NOT been a
crash in the meantime, odds are that they would have gladly renewed
him. But, at least in MD, they would _not_ have charged him for the
period during which he had not paid a premium (i.e. they would send
him a rebate check covering those few days worth of insurance) and
would specifically say they did _not_ cover any claims that might have
occurred during that period (since claims can be made any time up to
the edge of the Statute of Limitations, which is usually 3 years in
MD, and maybe far longer if an injury to a child was involved) even if
no claims had been made as of the date the late renewal check was
accepted. The ins. co., in that circumstance, would also probably
tell the customer that they would certify to the DMV (in MD, we call
it the MVA) that there was "insurance continuously in force" despite
the gap in coverage, so that adverse action would not be taken by the
DMV / MVA against the registered owner of an uninsured car (fines,
etc.)

But only a foolish ins. co. would willingly sell you ins. to cover a wreck that had already happened by back-dating the policy to the date you say they should have received payment, instead of the date they actually received it. Most of the time they would exactly back-date the policy to the renewal date. (Suppose the payment is due on the 1st. If they get the payment on the 10th, and there are no claims, are they going to say "You had no insurance from the 1st through the 9th, so this payment covers you from the 10th until the 10th of {next month|this month next year}"?)

In MD, yes, sort of. They would cover you from the 10th of e.g.
January until 12:01 a.m. on the 1st of July, and would rebate your
premium for the missing 9 days' worth.

This was on an episode of The Guardian: It had been the fire insurance company's practice to accept late payments, which it happily did, until the time when there was a loss during a time when a payment was overdue, and at that time they switched to a strict cash practice. (Dabney Coleman took the president of the insurance company out to golf, or beat him up, or something and took care of it.)

A new kind of superhero, with a golf club. Has he considered joining
the Mystery Men? They accept bowlers, cutlery experts, shovelers,
etc.

As far as the ins. co. knew, you had either sold your car, gotten too old to drive, gotten new ins. from a different co., or whatever -- that was your business, not theirs. This is as best, as I said, a legal fiction. Depending on the Original Poster's state, this type of thing may be frowned upon.

If he lives in a nanny state, yes. But not all states that require
mandatory insurance hold your hand to make sure you actually pay for
it and don't let it lapse. Some of them just slap your hand
afterwards instead, if you goof. In either case, it is still
ultimately the policyholder's responsibility to keep up his payments.
Even in states with a grace period and mandatory insurance, if the
policyholder doesn't pay, there eventually comes a date when he has no
insurance coverage.

None, unless an exception applies as stated above. If _you_ were a shareholder in the ins. co., would you want them throwing the company's (your) money away on defending someone who didn't even own an applicable policy? I would if I thought it was being penny wise, pound foolish.

Although I usually find your aphorisms pithy and on point, that one
went right over my head, David. How so would it be "pound foolish"
to deny coverage for a crash occuring during a lapse period?

we have 4 cars under this policy and we were all at risk during these 12 days, this is how everybody pays their payments, depending on the distance, What did the insurance company do for the other 3 cars that were not involved in an accident during the 12 days?

If in MD, they probably certified continued coverage but rebated the
premium for, and did not cover during, the days of lapse.

They don't know you're at risk. As far as they know, you either quit driving, or bought insurance from somebody else. You got what you paid for from them -- coverage from the first to last day of your policy -- but you were a non-repeat customer. That's all they know. And again, what's more likely, that the mail got delayed, or that the customer decided to change from having 4 cars insured (for the sake of argument at well above the legal minimum) to being uninsured?

You left out the most likely possibility, which is an intentional
change of insurer. Many people review their insurance needs at every
policy renewal and shift companies if they can get a cheaper policy
elsewhere. Foax who go thru independent agents, who deal with
multiple companies, may even have the agent suggest that to them.
There is little incentive to remain loyal to one ins. company if the
numbers show you are getting a better deal somewhere else. And AFAIK
it would be very unusual, and not required by any local law, for
either the policyholder or the indept. agent to tell the former ins.
co. that the customer has switched carriers.

--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.

Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300

Michael Jacobs
08-31-2004, 02:39 PM
chesler@post.harvard.edu (David S Chesler) wrote in message
news:<k5o2j051ub7g6fsbunvuqju598ngq9dj9h@4ax.com>...

mjacobslaw@comcast.net (Michael Jacobs) wrote in message news:<01d9i01mfujguujl5hsejpu1hspgolq2oh@4ax.com>...
You have to make sure they _receive_ payment before the policy period ends. It's your responsibility, not theirs, to make sure it is actually received by them, not just put in the mail. That means, to be safe, you need to either mail it far enough in advance so you can get a receipt _back_ from them (they do mail you back a receipt, right, when you mail in your payment?) _before_ the end of the policy period, and/or go to the agent's office in person to make your payment if you haven't gotten a receipt back before the policy expires. Or check the status of your payment online -- most ins. co.s offer that option now. The typical consumer does not do this half a dozen or more times each month (for the car insurance, the mortgage, the electric company, the gas company, local phone company, the long distance phone company, the cell phone company, the cable TV, the newspaper, and so forth, not to mention the credit cards.) If a payment is lost in the mail, it gets corrected the next month. If there's a penalty, it's on the order of the cost of more secure delivery for two or three of the payments.

I forgot to address this issue in my last response... the difference
between e.g. a utility bill and an insurance premium due is that the
utility is providing an actual ongoing, day-to-day service
(electricity, water, dialtone) and is expected to go on doing so
indefinitely -- it does not have a built-in expiration date, as your
insurance policy does. If e.g. the electric co. provides you a
couple months of extra service after you stop paying them, they are
genuinely out something, which it cost them money to generate and
which it is their business to sell, and they will have a right to sue
you and collect on the value of the services they provided. In
contrast, if you stop paying your insurance premium, they cannot turn
around and sue you for an unpaid bill for services actually provided
because there were none provided -- they didn't continue to shovel
coal down your chute, and you didn't burn any of it, so you were even.

But weren't they "on the hook" for the abstract service of providing
coverage until you told them to stop? No. They have no way of
knowing that you, the policyholder, wouldn't be able to say in
defense, quite reasonably, that you weren't deriving any benefit from
their policy because you knew it expired at exactly 12:01 a.m. on such
and such a date and you went out and purchased a new policy from
another company that took effect at exactly that minute to cover you
from then on. Or that you had sold your car and stopped needing
insurance. Or whatever.

Pose a hypothetical: Let's say you _did_ have a wreck after your
policy with Insurer A had expired, shortly after you had purchased a
new policy from Insurer B. Let's say your coverage under Policy B is
not adequate to fully compensate your loss. Could you turn around and
claim against Insurer A as a secondary insurer, saying you really
intended to keep them on too, and tendering your (late) premium
payment? Hardly. It is no different from Insurer A's point of view
whether you had new insurance or not. They simply will refuse to
cover an occurence that happened outside of the clearly defined policy
period -- absent, of course, some specific statutory required grace
period such as you say exists in Massachusetts.

--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.

Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300

DavidosMiller
02-28-2009, 11:24 AM
Everyone knows that insurance premiums can be affected by your credit history or perhaps a spotty driving record in the case of auto insurance. But few people realize that an insurance company's loss experience is one of the biggest factors for determining how much they will pay for coverage. How so? Well, say for example an insurance company paid out a large amount of homeowner insurance claims due to a particularly catastrophic year of floods and fire damage. The same insurance company may also provide auto insurance coverage. To compensate for the losses experienced under their home owner insurance division, they may raise premiums for their car insurance customers even if they had no accidents or tickets. Or, they could simply increase the insurance prices for house insurance policyholders in another state.

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