Is it normal for an insurance company to ask for proof of insurance on an auto you are removing from them?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Oct 13, 2011

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Insurance Question from Gary, IN

Asked on 10/13/2011

Is it normal for an insurance company to ask for proof of insurance on an auto you are removing from them? My insurance company"s secretary failed to process my payment one mnth..a month later i was in an accident and found she had not done the payment. She was fired and the company agrees to process my claim. In the process my husband insured his car else where and doesn"t trust them. They just asked me for proof that he really has insurance somewhere else and says its part of their policy. Is this true and Why?

Answer given on October 13, 2011

Insurance companies will sometimes ask for proof of insurance on another car in the household if you are removing it from their coverage. Since they are insuring your vehicle, they do have the right to know if other cars in the household are insured. The insurance company did the right thing by covering the loss that your husband had with his car since the payment was not properly processed. The company may want to see if your husband replaced his insurance elsewhere before the accident they have agreed to cover. It may be they want to be sure they are responsible to handle the loss, or if there was other insurance in force at the time of the accident.Be aware that by splitting up your insurance between two insurance companies you may lose discounts on both cars, such as a multi car discount and and loyalty discount. You also need to be sure you have the same liability limits so there is no problem there.

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