Question
About a month and a 1/2 ago I leased a truck from a dealer and got leased on to a company. I got a policy with Carolina Casualty. Had a meeting with the Co. I am currently leased to, and they suggested that I should switch ins. co's. to the co. they use, to insure their co. trucks and trailers. After considering this about a week, I changed co's. Now, Carolina Casualty says that they are going to "charge me" a 20% fee based on my entire policy cost for 1 year. That comes to $515. I had only written them a check for $600 to begin with to start this policy, they then billed me for the remainder.
At the time I did the switch, I had taken posession of the truck and ONLY drove it home and it was parked for a few days. I DID NOT drive it OTR at all until after I made the switch.
I realize that an agent had to spend some time doing the research and paperwork for the policy. That time should be compensated for. BUT NOT to the tune of $515. It took them about 3 hours to put this policy into effect, from the time I walked in to the time I left, with policy in hand.
I'm still waiting for the check to arrive.
Is there anything I can do about this?
Thanks for any help anyone can offer.
Hoss; feeling like my wallet was "raped".
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"Born to hunt, forced to work"
[This message has been edited by Hoss (edited June 25, 2000).]
[This message has been edited by Hoss (edited June 25, 2000).]
Answer
Hoss,
I can certainly understand your frustration. Perhaps I can help shed some light on what appears to have happened (based on your post).
There are two things that may be involved.
First, there are three types of cancellation. "Flat" cancellation meaning no coverage and no premium charge. "Pro-rata" cancellation meaning premium is charge proportionately for the time coverage was provided. "Short Rate" cancellation is for a short term and includes a "penalty" for cancelling the policy mid-term.
From what you've written, it appears you requested cancellation of what normally would be an annual policy and Carolina Casualty may have "short rated" the cancellation.
The other issue is that some insurance policies have what is called a "Minimum Earned Premium". That means that if the policy is cancelled prior to normal expiration, the insurance company will keep the minimum premium as stated in the Minimum Earned Premium stipulation.
If the stipulation were $500 Minimum Earned for 1 day or 365 days worth of coverage, then the insurance company would retain that amount.
As for the agent's work being worth something, you're correct. However, the commission associated with the policy is what the agent would receive as normal compensation. That commission of course would be proportionate to the amount of actual premium.
For example, if the annual premium is $1000 and the commission is 10% and the policy was in effect for the entire year then the agent would get $100 in commission. If the policy were cancelled mid-year and the premium was $515 for the period of time coverage was in effect, the agent's commission would be $51.50.
I would recommend you contact the agent and ask hime to explain the type of cancellation and the calculations used.
If you care to discuss this situation privately, please feel free to call me at 800-933-7911.
Connie
AS EACH SITUATION IS UNIQUE, AND SPECIFICS AND CIRCUMSTANCES MAY VARY, THE ABOVE IF FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED TO IMPLY AN AGENT CLIENT RELATIONSHIP.