This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Your Insurance Agent Won't Tell You Your Policy Is Being Canceled





If you've fallen behind on the premium payments for your car insurance policy, you're going to start getting nonpayment alerts and notices of impending cancellation from your insurance company. But there's one person you probably won't hear from on the matter: your insurance agent.

That's because agents aren't required to notify a policyholder in the event of an impending cancellation.

"The parties to the insurance [policy] are the carrier and the policyholder," explains insurance agent David Hulcher, an assistant vice president of Agency E&O Risk Management at Big I Advantage in Alexandria, Va. "State regulations require carriers [to have] specific time frames and methods to notify policyholders of cancellation. The agents are not a necessary party to this direct communication."

In other words, letting you know that you forgot to pay the bill is the responsibility of the insurance company, not the agent. Your agent will probably receive a copy of the notice, and there's nothing to preclude him or her from also giving you a heads-up. Yet many will deliberately stay out of it, preferring to let the insurer handle the task of informing you of your delinquency.

Hulcher, who is in the business of protecting the practices of insurance agents, says that this decision is partly a matter of limiting the agent's professional liability.

"The concern is really about taking on an additional duty that is going to potentially raise the standard of care for customers, which in turn increases exposure," he says. If agents get in the habit of calling up their less-conscientious clients every time they forget to send in their monthly payment, they run the risk of establishing that as the norm. And that means that if the month comes when the agent forgets to call with their usual reminder and the client loses his or her coverage, that agent could be sued if the client later gets into an accident and isn't covered.

Too busy

But it's not just litigation that makes agents wary of calling up delinquent clients. It's also the fact that they don't have time to deal with it.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs