Legal Question

[RPI-Fan]

I work for a lawyer, but he doesn't consult for this kind of problem, and besides, I'd like to keep this a bit more anonymous anyways.

So, here's the story...

My insurance company, for one reason or another, cancelled my insurance last year (sometime in May), a few weeks after I had put it on my car. I either never received notification of this, or somehow overlooked it. That's in the past. I worked out the problem last week and my car is now insured. But I was technically driving without insurance for over a year (though I didn't know it).

Now here's the legal question... in working all of this out, the insurance company is telling me I have to pay the fees for the insurance of the previous year. If they don't, they say DMV will slap thousands of dollars in fines on me. Now, they haven't actually said this, but the implication is that they're going to report me to DMV if I don't pay the back money. If I do pay, they'll keep their mouths shut.

So they're making me pay fees for insurance coverage which I didn't receive. Had I been in an accident last year, they would have said "not our problem - you aren't covered".

So is this extortion? I'm pretty sure it is, from what I've read, I'm just not clear because of sort of the indirect process by which it's occuring. Also, I don't think it's beneficial to attempt to take action, since I won't get any money from the matter, and will end up having to pay both legal fees and huge DMV fines.

Any help would be appreciated.

Thanks!
~rpi-fan

[Coffee Warlord]

Ask. A. Lawyer.

Don't ask us. Ask a lawyer ASAP.

[GoldenEagle]

I am no lawyer nor am I experinced, but I do know this....

Insurance companies are evil. It does not matter if its auto, health, etc. They will cheat you out of money. I know with my health insurance, the first we file for ANYTHING, they always ignore. We have to file at least two times. Then they raised are deductiable in mid year. There is not a thing we can do about it and I would imagine there is not a think you can either except spread the wrod about your insurance company.

[GrantDawg]

Or, put in a call to the DMV. They may answer your question. Just don't give your name. :)

[Samdari]

I have had this happen, and in NYS by the way. What the insurance company is doing seems shady, but cheaper for you than paying the fine. In 1997, the fine for having a motor vehicle registered but uninsured was $6 per day (adds up quick, I had to pay it for >100 days once). It is probably more now. If the insurance company does report you, the DMV will revoke your registration until such time as you do pay the fine, or prove that you had insurance for that period of time. Lots of insurance people would "back-write" a policy to cover such periods when I was living there, and some would even back-write it to cover accidents.

Probably the best you can do here would be to pay for insurance for the last year at the minimum limits required by law. What the company is doing now is following the law. Any time someone's insurance drops, they are required to report it to the DMV. If they can show that you were insured for that period, they do not have to report you. How they slide on not reporting it when it happened, I have no idea.

The whole writing of insurance policies to backfill dates seems like it should be illegal, but it was fairly common when I lived there. I once got into an accident with a guy, he begged me not to report it, as he had no insurance. A few days later, he had insurance, a policy which started the day before the accident. It must be legal, or at least accepted, for them to do this.

[Marmel]

I had a strangely similar problem with you about 5 years back, where I was driving around with no insurance for almost a 6 month period (until I realized my insurance should be up for renewal, and that is how I found out).

Anyway, my new insurance was with a different company.

Just a few weeks later I got a letter from the DMV stating I needed to do either:

a) show proof of insurance for time period x-y (when I was not covered)

or

b) Pay a 105 fine and sign a letter of forfeiture of license if I should be without insurance anytime in the next 5 years.

I paid the fine, signed the statement and never heard from anybody ever again. This was in Connecticut. NY and all other states may vary, of course.

[RPI-Fan]

Thanks for the tips. From the start I've realized that paying the insurance is probably the cheapest and smartest thing to do.

I was just curious if what they're doing is illegal (seems like not completely, though I'll probably ask my boss for more official advice), and if there's any reason for me to do anything about it (since I'd probably just end up in deep fines and possibly legal fees).

But I'll ask my boss - thanks all for the tips!

~rpi-fan

[Bonegavel]

Can they prove that you drove the car last year?

[mrsimperless]

Originally posted by BoneGavel
Can they prove that you drove the car last year?

It sounds like it doesn't matter if he drove the car or not, the fact that it was simply registered to him is enough to warrant a fine. However I'm sure this differs state by state.

[Bonegavel]

Originally posted by mrsimperless
It sounds like it doesn't matter if he drove the car or not, the fact that it was simply registered to him is enough to warrant a fine. However I'm sure this differs state by state.

I was being a bit of a smarty pants, but, being a legally insured driver since 1986, I had forgotten about that. Good catch.

[Alan T]

Would it make sense to shop around other insurance companies and see if anyone would back fill your policy for cheaper? I never have even heard of this situation before, so unfortunatly don't have any sage advice here...