Auto Insurance Sending me to Collections

[CruzImperial]

Good evening myFICO. It's late at night and I'm not feeling very well. To make a long story short, I had an auto insurance policy with Esurance for couple of months when they added another driver to the policy and updated the policy monthly payment from $180s to more than $600. I sent the required forms to take him off my policy but they wanted me to pay the full $600 for the month he was under my insurance.

I did not pay them. The policy lapsed and they say I owe them little more than $300. I am currently with another insurance company and have been disputing the charges through the BBB but things are going south.

What can I do to avoid the policy being sent to collections? Can I work with them on a repayment plan? I am truly lost in this one :/ The policy is currently 30-60 days past due.

Last payment was 06/06/2012 for $187.14.

Policy lapsed -----  07/21/2012.

Payment failure  -- 08/19/2012 $314.84

[RobertEG]

Your issue is just the sort of thing that the Fair Credit Billing Act (FCBA) was enacted to address.

Disputes under the FCBA give consumers substantial grounds to compel documentation of billing disputes, and place restrictions upon what they can and cannot do until resolved.

I would look into filing an FCBA dispute.

[Shogun]

Seems like there should be a means of pro rating or something on this.  Wouldn't want to pay for services that weren't rendered.

[LIGHTNIN]

Some companies turn over account to CA's quick, like 90 days. So act quickly this week, because 90days is up by this Friday.

The way I understood your post, is that it was pro-rated from $600 to $314.84.

It all depends on the date you added the additional driver, to the date you removed them, whether there was an error made.

Also, depends on what the fine print said, on the contract you may have signed.

Do whatever you can for this not to go to a CA, because it can ding your score by 80-100 pts.

If the additional driver is working, ask them to chip in some $$, because the insurance was for their benefit.

Good Luck to you, I hope you can straighten all of this out.

[CruzImperial]

I called esurance today and the lady told me they had sent it to collections yesterday. I called the collections company and they told me they didn't have me in their records and that it gets sent to another department first and then takes about a week for them to update the information in record. I called back to esurance and talked to another CSR who told me they didnt sent it to collections. I explained and then she put me on hold to call the biling department and said oh yes, we sent it to collections.She told me they can pull back the account from the collection company after the payment has applied and that she will sent me an email stating that.

I'm just hoping they pull it and the collection agency does not report it or im going mad for this "Mod Cut"

 Please refrain from using foul language,Lightnin,myFICO moderator

[KnewBee]

Hi brand new to the forum so I don't know if my response is timely or not. Been in the auto insurance business for 15 years. you hold all the cards here. In my experience most auto companies  that send to collections, usually don't report to the CRAs. If the agency does report it is usually pretty easy to get it removed Working with company. Did the  driver they added have coverage elsewhere at that time? If so and have have documentation on that should be easy to provide and have them back out. If you have problems with this let me know and I can advise a few different ways you can address. The reason insurance company collection agencies usually do not report is because big well known companies don't want the bad publicity with sending you to collections. Not an expert on this, but have had some experience with similar situations over the years and was always able to resolve so let me know if still having issues on this one and I will try to help. Thanks 

[scarrollprint]

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@CruzImperial wrote:

Last payment was 06/06/2012 for $187.14.

Policy lapsed -----  07/21/2012.

Payment failure  -- 08/19/2012 $314.84

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Looks like you didn't pay ANYTHINg in July...or early august. I'm not sure what you mean by "payment failure" but if your policy lapsed on 7/21 then they probably would have ceased covereage on that date.

Based on the numbers here, they didn't charge you for the additional driver at all...if your origional monthly payment was 187.14 then when you didn't pay in July, you would have owed an additioanl 187.14 for coverage for the month (you prepay for insurance, you don't pay for the month that you just had coverage, but rather the month your about to have). So they probably alraedy prorated it, but only because you went a month and probably a grace period or so with coverage that you didn't pay for up front...

[09Lexie]

Sorry to hijack the initial question but in response to KnewBee, my DH was sent to a collection company by our previous auto insurer.  We found out about it recently after he pulled his annual credit report.  Anyway, we have never been contacted by the company and from what I can determine it was a cancellation fee cause we decided to go with another insurer.  He says we should pay it to get it off his credit.  I am annoyed a cancellation fee? This is a well-known insurance company and a consumer should have the right to shop rates and cancel a policy.  

It is reporting on TU only... Any suggestions?

[Shogun]

Try and send them a PFD, see if you can negotiate a lower price.  All they can do is say no, then try again!

[KnewBee]

HI Lexie, if you have your paperwork on the new coverage you got many companies will back date their cancellation if you provide proof of other coverage with your new carrier vs. when the old one canceled. They generally have to back date the old cancellation to not charge you for duplicate coverage. If you don't have it your new carrier should be able to provide and often times that will adjust out any unpaid fees. If what they are billing is coverage you actually received, but just wasn't yet due to switching carriers mid term when you switched, they should be willing to remove that from collections if you pay it now especially if they never sent you a final bill. If this doesn't work let me know there are ways to elevate this. If they never sent you a final bill and just put you in collections that is not right and you do Have some options. Hope this helps, let me know if you need more info.  Also how much is it and how long ago was this?