Grace Period; Access General Insurance

[khang.mis]

I have a client insured with Access General, he has full coverage and paid in full for a 6 month term. His policy expired on 2/22/12 at 12:01am, at 9:50am his car is stolen and he comes to my office and pays his insurance at 10:50am. The claim was denied based due to lapse in coverage. To my understanding shouldn't the grace period apply? Doesn't the grace period clause apply here?

Or can Access General make their payments due really early before the expiration and make the grace period end on the date of the expiration? Is this a "loophole"? Does my client have any chance against the insurance company in court?

 

[djs]

Wow, Access General denied a claim???? Never heard of such a thing!!!!!

I don't believe there is any required grace period between policy terms. You either renew or you don't. Now, I'll grant you, most companies will honor this, just don't think they are required to (different for a missed payment).

I've never seen Access General cut anyone any slack if they didn't have to. You pay lower rates, you get what you pay for.

Dan

 

[khang.mis]

Fully aware of Access' practices and reputations, however there is a strong demand for cheap insurnace. So grace periods only apply during the term/installments within a term? I was under the impression that grace periods apply to renewals as well. Man this is a poo storm waiting to happen

 

[griffinins]

He's out of luck, he renewed with a lapse. I had a similar situation last year, that they denied. Their billing confuses most customers, but they are equity bases so the payment only covers 30 days.

 

[djs]

I tried to do a bit of quick research and it looks like yes, grace periods do not apply at the end of a term. Now, there are a bunch of caveats...

- California may have a state law on this. Not sure. I doubt it, Access General would have been there / done that already.

- Apparently, appropriate notice must still be given. They should have sent a notice saying that without payment the policy will lapse. Of course, they will claim they did. Receiving the notice isn't as relevant (anyone can claim they didn't receive it).

Dan

 

[FEX Quotes]

Grace periods are typically used for premium acceptance, not extending coverage.

 

[djs]

????
Not sure what you mean.
Most P&C carriers will give you a grace period to pay your premium, usually around 10 days, before they officially 'lapse' the policy back to the original date.

This effectively means you can have coverage extended if you make the premium payment, even if a claim happens after the lapse time, but before the payment.

Some carriers include the grace period in their notices. It can be confusing!!!


Dan

 

[khang.mis]

Well to add some sensation to this story, the customer's wife told the cop from her recollection that their is about $3500 in the purse that was in the vehicle. And then when the husband came out, he and her recollected that there was actually $10,000. Not that any of it matters, it was just interesting to see how humans would react.

I appreciate the insight! I feel that there should be some uniformity amongst the insurance companies.

 

[djs]

Of course, that money should be covered as well, correct?
Now, think about where that kind of cash came from, and then you know what happened to the car.

Let us know when they decide they want you to pay for the loss of the car (and the cash).

Dan