Can an insurance company drop you without notification?

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Can an insurance company drop you without notification?

We have never made a claim and have no new speeding tickets. My husband hit a deer, when he called the insurance company they claim his policy was dropped last year. The premium is automatically deducted from his account. He doesn’t keep great tabs on it but the bank statements show a larger amount was taken by the insurance company for several months – almost double the regular amount.

Asked on September 15, 2012 under Insurance Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

An insurance policy is a contract: the insurer may drop you either when the existing policy expires (i.e. choose to not renew) or as provided for in the policy itself. Therefore, the first thing you should do is to review the policy for when and how you can be dropped. If they did not comply with the provisions of the policy--for example, the policy required notice if you are dropped--then they have to maintain coverage.

Second thing to do is to do what you have begun doing and check how much has been paid--taken out from the account--for insurance. The insurance company cannot only charge what the policy allows; if it took out extra (e.g. double, as you imply), at a minimum, you would be entitled to the recovery of the amount improperly charged or deducted; you might also be able to have a court treat this as if you prepaid X months of the policy, and so keep your coverage intact--if the insurer purported to drop you--for an amount of time equal to the "extra" coverage the surplus deductions paid for.


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