Some things to watch out for

My name is Patricia and I’ve already mentioned this in some other articles before, but I should tell you of my bad experiences, so you can watch out for “bad guys”. When I first “left home”, at age 18, and moved to a “college town” several hundred miles from my parents’ home, my insurance agent advised me that his company was not licensed to sell insurance in the state to which I was moving – so I needed to find a new insurer within thirty days.

At that time, my driving record was clean, and I had the necessary funds to pay for the premiums, so it shouldn’t be a problem – right? In those days, Young America Insurance was a division of Rodney D young& Co., and their agents worked from offices within a Young America agency. I trusted Rodney, so I went to the nearest agency and forked over my cash to the local agent.

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Young America Insurance is a reputable company, so I assume that my problems were the result of a “bad” agent

I’ll even give him the benefit of the doubt and say that he may have initially been trying to do me a favor. What he did, though, was to sign me up for a particular policy for which I didn’t qualify – but I had no clue that I didn’t meet their requirements.

He knew the rules. I didn’t know the rules. It was his job to sell me the appropriate coverage. Whether he intended to harm me, or if he was trying to do me a favor and “cheat the company” on my behalf, I don’t know. What I DO know is what happened next.

Young America Insurance immediately caught the problem – and promptly sent me a cancellation notice

It was followed the next day by an offer to cover me under a subsidiary company’s “high risk” insurance. Since I knew that I was not high risk and that this problem was not of my making, I refused to buy the higher priced coverage from the same agent.

That’s when I discovered that every insurance company wants to know who last covered you and why you are changing. If you have been canceled by another company, they want to know why – and what they were told was that I had fraudulently purchased coverage for which I did not qualify.

Did the agent deliberately “set me up”, or was he lying after the fact to protect himself? I really don’t know, but whatever the cause, the outcome was the same. I was forced to buy high-risk insurance, and to continue paying for it for the duration of my college years.

Many years later, in a state 1200 mile to the west, I had another bad experience

I helped my daughter to buy a nice, used car. She had to finance it, so I co-signed the note with her. Of course, when you have borrowed money to buy a car, the lender wants you to carry full coverage insurance so that their investment is protected. I took her to my insurance agent – whom I absolutely trusted – and wrote a check for her first month’s coverage.

Two weeks later, she was on her way home from work, late at night, in a blinding rainstorm – and totaled the car.

The next morning, we phoned the insurance company – and found that they had no record of the car!

Apparently, my trusted insurance agent had used our money for something else, intending to pay the company and bind the insurance “before anyone knew”.

It’s fortunate that I had written a check, and had kept the receipt

As soon as I proved that I had paid, the company stood behind the loss. They were not very understanding with the agent’s laxness, though! He lost his job – and we gained some valuable insight – always pay by traceable instruments, and always keep your receipts.

Incredibly, I “lost” another agent some years later, due to similar practices. Once again, I found myself shopping for insurance.

So, what’s the point of this article?

In a nutshell, Leave Nothing to Chance! Most insurance companies are ethical and above board, most insurance agents are honest and want to help you. If they are not, there are government agencies which oversee them. Still, there are a few “bad apples” out there, so it’s buyer beware.

If you have any reason to doubt anything, or if you see anything in your insurance transactions which you think may be other than completely right and above board, ask questions, and be sure to get everything in writing.

Don’t even think about “cheating”, because it will cost you big time when the problem is found.

When you have made your choice, pay with a traceable instrument (check, debit card, credit card), ask for a receipt, hang on to those documents, and leave absolutely nothing to chance.