I recently canceled my insurance policy and now I’m facing some complications regarding post-cancellation bills. For the past few years, I’ve been paying $436 a month for a 2022 Honda, which has been a stretch for me, but I’ve always made my payments on time through autopay, without any missed bills. My last payment was on February 28th, but it drained my account, leading to an insufficient funds situation that I had never encountered before.
After that, I switched from Liberty Mutual to Geico, where my new premium is only $159 a month. Geico notified Liberty Mutual about the cancellation and requested a refund for the unused coverage for this month, the bill was due on the 28th, and the cancellation was on the 6th. When I called Liberty for confirmation, they claimed they hadn’t received the cancellation notice, refused to issue a refund, and set another date to withdraw the $436 from my account. On top of that, they added a fee of over $90 but didn’t clarify what it was for, and it’s due on the 22nd of this month.
To avoid further issues, I instructed my bank to halt autopay for Liberty after the $436 charge, since I was still technically responsible for that amount. However, they mistakenly halted all autopay transactions, which means the $436 won’t be deducted, something I didn’t intend. Now that I’m no longer a customer, I cannot manually pay the balance through their app.
I’m concerned about the potential legal or credit repercussions of having unpaid bills after cancellation. Does anyone have any insights on this issue?
It sounds like you’re in a tough situation with your auto insurance cancellation and the resulting financial complications. Here are some key points to consider:
Legal Ramifications: Generally, if you cancel a policy and there’s an outstanding balance due, the insurance company may pursue payment for any amounts you owe. If you do not pay, they could potentially send the account to collections, which could impact your credit score. However, since you did not authorize the autopay to go through and you have canceled the service, you may have some grounds to dispute further charges.
Credit Ramifications: Unpaid bills can affect your credit score, particularly if the debt is sent to collections. Insurance companies typically report to credit bureaus, so it’s essential to address any outstanding balance.
Documentation: Keep records of all correspondence with both Liberty Mutual and Geico, including dates, times, and the names of representatives you spoke with. Documenting your attempts to resolve the issue can be helpful if you need to dispute any charges later.
Contacting Liberty Mutual: Follow up with Liberty Mutual again about your cancellation and the charge. Make sure to emphasize that you are no longer a customer. Ask for a clear explanation of the added fees and request a written confirmation of your cancellation and any balances owed.
Payment Plans: If you owe a balance after tax refund assessments or if collection efforts begin, you might consider reaching out to Liberty to discuss a payment plan or negotiation for a lower amount, especially since you are now paying a lower premium with Geico.
Consumer Protection: In some regions, consumer protection laws may be in place to help you with disputes between you and the insurance company. You might want to research those or consult with a legal professional for more tailored advice.
Bank Actions: Speak with your bank to clarify what happened with the autopay and see if they can assist in resolving the errors made in halting all payments.
It’s essential to be proactive to mitigate any negative effects on your credit and resolve this situation as soon as possible. Good luck!