Interesting, when you don't pay your insurance bill, your policy is still active ?

chiller

chiller

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This is an interesting scenario that I've found myself in.

My house insurance was set to expire end of April. I called around in April to see if there is a better rate anywhere else. I found a better rate and had the new policy set to start the day after the original policy expiration. I figure if you don't pay the renewal letter you get then your policy ends.

I get a letter from TD Meloche Monnex for the policy and to pay, etc. etc. on Friday.

I called them today to find out what this was all about and find out that the policy is STILL ACTIVE even though my documentation says expiry date for end of April. They are charging me a $67 late cancellation fee plus 1/12th of my annual policy.

I thought that if you don't pay your bill then your policy is auto cancelled the day that your expiry is set to. In conversation with the customer service agent he would see if he can ask a manager to waive all the fees on this and get back to me in a few hours. He mentioned that the policy never cancels automatically and is active until they have written or verbal confirmation of a cancellation and that this is industry standard.

I guess the question is more to the insurance folks, is this 'standard' practice in the industry ?

I'm not mad about it, just more curious if this is 'normal' operating process.
 
You get automatically renewed by insurance companies provided that there arent any reasons why they won't be able to continue you. With respect to you not paying for your renewal, you have to verbally or physically withdraw your policy "cancelling it/ tell them your not going to renew" If this wasn't stated then yes you will continue. The trouble you will run into is that you will get cancelled for non-pay if you dont pay them. Getting a cancellation for non-pay for home insurance is a BIG NO-NO.
 
well its cancelled as of today and I don't mind paying the $67 fee for the cancellation if that's what it comes to. I just thought an expiry date was an expiry date that your term is up.

The agent on the phone said I would be cancelling and this is not a non-payment cancellation just a cancellation with a penalty charge for late.
 
if this is the industry standard practice, then what is the point of having an 'expiration date' on a policy ?

If there is never an end date to a policy then this should be renamed to perhaps something like "annual rate validation date" so they can jack your rates once a year ?

Thoughts ?
 
chiller said:
if this is the industry standard practice, then what is the point of having an 'expiration date' on a policy ?

If there is never an end date to a policy then this should be renamed to perhaps something like "annual rate validation date" so they can jack your rates once a year ?

Thoughts ?
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If that's what they called it, you (as a customer) would have been better informed and called to cancel, keeping them from getting your (and likely thousands of others) late fees. Cha-ching.
 
Standard policy. You have to expressly cancel the policy. I always thought it was the "renewal' date.
 
just like leases (rental), things are usually in a 1 year term. also, things change on a drivers abstract and insurance records over 1year. 1 year contracts give the insurance companies an option to review your abstract and either jack up or lower (usually higher) your rates.
 
Think about the flip side, you ignore the renewal and don't pay and then have a claim and thought you were insured.

Happened often enough that the insurance companies agreed to auto renew your policy unless you notify of cancellation.

A lot more customer friendly.
 
nakkers said:
Think about the flip side, you ignore the renewal and don't pay and then have a claim and thought you were insured.

Happened often enough that the insurance companies agreed to auto renew your policy unless you notify of cancellation.

A lot more customer friendly.
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Lesson learned for next time. I paid my cancellation fee and late payment fee and the 1 month they charged. All of that is still less then the amount I saved moving insurance companies.
 
nakkers said:
Think about the flip side, you ignore the renewal and don't pay and then have a claim and thought you were insured.

Happened often enough that the insurance companies agreed to auto renew your policy unless you notify of cancellation.

A lot more customer friendly.
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Bingo. The renewal gets lost in the mail and you didn't notice the date on your pink slip. Now you're driving uninsured or your house burns down. That would actually favour the insurers.

The late cancellation fee could be a bit over the top.
 
nobbie48 said:
Bingo. The renewal gets lost in the mail and you didn't notice the date on your pink slip. Now you're driving uninsured or your house burns down. That would actually favour the insurers.

The late cancellation fee could be a bit over the top.
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well all in all I basically double paid the month of May since ... my auto renewal was on the old policy (which I didn't know was still in force) and I had insurance on the new one ... plus the $67 ... So I'm out about $122 including tax total.

It is an acceptable cancellation charge ... I saved more by moving it to the same company as my cars. My house 'rate' went up about $50 / yr but with the multi-product I saved 10% off ALL the vehicles in the house (2 bikes and 2 cars) so I saved about $300 on the other side ... which got dinged down by $122 so total savings on yr 1 is only $178 ... it'll compound to more savings next yr etc. etc.
 
This happened to me as well.

If you email a copy of your new insurance policy to your old insurance company, to prove that there was absolutely no possibility of a lapse of insurance, then they might waive the late penalty. This is because you were actually not late paying your insurance, but only to another insurance company. Be nice, play dumb and you might get away with it.

If you do not pay you'll be in the insurance bad books for quite a while and you may not get insurance from someone else. They protect their own.

Lesson learned: Insurance is required, so does not cancel upon expiry. This is a good thing for those who forget, and a bad think for those that knew but chose to let it end naturally.
 
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