Insurance - Insurance Company Asking For Additional Pay
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iKwak
09-15-04, 01:22 PM
What is the name of your state? CA
Hello. The small business is for a supermarket. The insurance company figures out the insurance rate by the total value of the inventory (market goods). The insurance company gave me a quote and I've paid the annual cost, which I started on September 2003.
I received a letter and a phone call from the insurance company saying that they have miscalculated the total inventory and figured out that our inventory is higher than they have previously calculated. Therefore, they are requesting additional pay for our 1st year insurance cost.
Well, of course I refuse to pay because it was the company's mistake and we agreed on our insurance contract of the annual term and fee (which I have paid).
I will soon need to renew the insurance by the end of September and still, the insurance company is requesting the additional pay for the first year term. I have my rights to refuse, correct?
Thank you for your time.
Hello. The small business is for a supermarket. The insurance company figures out the insurance rate by the total value of the inventory (market goods). The insurance company gave me a quote and I've paid the annual cost, which I started on September 2003.
I received a letter and a phone call from the insurance company saying that they have miscalculated the total inventory and figured out that our inventory is higher than they have previously calculated. Therefore, they are requesting additional pay for our 1st year insurance cost.
Well, of course I refuse to pay because it was the company's mistake and we agreed on our insurance contract of the annual term and fee (which I have paid).
I will soon need to renew the insurance by the end of September and still, the insurance company is requesting the additional pay for the first year term. I have my rights to refuse, correct?
Thank you for your time.
Mike Swearingen
09-17-04, 09:12 AM
I'm not an attorney, but if I understand the situation, the insurance company miscalculated the value of your inventory and charged you a premium amount for less inventory than you actually have. Then they calculated a higher inventory value and wanted a higher premium for it.
They have suffered no loss.
If you had suffered the loss of your entire inventory, they would probably say that the difference wasn't covered because you had not paid the insurance premium on the higher value difference.
In my opinion, you don't owe them anything for past coverage that you did not have. The renewal premium will be higher because of the higher inventory value, of course.
If they don't waive the past premium that they're trying to charge you, I would get another insurance company.
Good Luck!
Mike
They have suffered no loss.
If you had suffered the loss of your entire inventory, they would probably say that the difference wasn't covered because you had not paid the insurance premium on the higher value difference.
In my opinion, you don't owe them anything for past coverage that you did not have. The renewal premium will be higher because of the higher inventory value, of course.
If they don't waive the past premium that they're trying to charge you, I would get another insurance company.
Good Luck!
Mike
razz
09-20-04, 04:35 PM
This makes no sense. Insurance doesn't cover past losses that did not occur, it covers future losses that have not yet occurred. So they can't ask for a higher premium for retroactive coverage. Also, my insurance policy clearly states the inventory value coverage, and bases its premium on that. If your inventory value is $2M, and your coverage is $1M, you are underinsured, no matter what your premium is. If they think you're underinsured, they only need to ask you if you want to increase your coverage and pay the additional premium. Henceforth, not retroactively, of course. Good thing you were spared of a loss.
Sounds like a good time to find another company before your policy lapses.
Sounds like a good time to find another company before your policy lapses.