Reader Question: Scammy Insurance Interrogation

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Here’s the latest reader question, along with my reply!

Bob asks: I live up here in Herndon, VA. My auto insurance is through Elephant, outside of Richmond. My renewal comes up this week. I just called them to review some obvious info. For example, my daughter (just turned 21) is still on my policy. She has since secured her own auto insurance for her own car. So, I simply asked for her to be deleted from my policy. I was then put on hold for a few minutes, but not told why. When the rep came back, he asked for proof of my daughter’s new insurance policy due to underwriter’s requirement. Since when did this verification start? My daughter’s new insurance company is none of their business unless they are doing some stealth marketing research. I just said I will call the underwriters in the morning, not that I will get anywhere short of canceling the policy and moving to another company. Or am I out of touch with the whole auto insurance scheme? Thanks for any input!

My reply: I burn with hate for the insurance mafia – precisely because it is a mafia. They have wheedled the government into serving as its enforcer – threatening us with violence unless we buy their “services.” This accounts for the insolence you describe. A business that had to please its customers would never get away with such things. You could tell them to cancel the policy and go to hell – without repercussions (as I did with my home insurance policy – which I’m not yet forced to buy).

That said, I am not aware of any law which requires you to divulge the info about your daughter’s coverage. However, that doesn’t matter if the mafia requires it – because you’re compelled by law to buy “coverage” – and they know it. So they can make obnoxious demands (as well as charge you outrageous sums) because they know you have to buy their “services” – or the “services” of one of their government-backed rivals, which is a difference without a distinction.

You could cancel your policy, but I would counsel you not to do so before you have acquired a new one with another company. If you just cancel, it is a sure bet that every company you talk with will quote you obscene rates on the basis of your “cancelled” policy, which they will use as the excuse to fleece you even more than they otherwise would.

You have my sympathies, amigo… .

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4 COMMENTS

  1. They want proof because of how they may have gotten stuck in the past. Unless it is in the policy you have with them as a requirement to remove people from the policy they can go pound sand. If it is in the policy they can simply not renew it if you don’t comply. However I suggest getting another policy and canceling before they do that. Once ‘dropped’ you get flagged in the shared insurance company data system. It was one of the things C&D used to write about GEICO back in the 80s and 90s. They would drop policies for trivial things like filing a valid claim and then the customer had problems getting new affordable insurance.

  2. Thanks to Eric for his timely reply to my situation.
    As an update:
    I talked with a lawyer today and he has never heard of this but at the same time, could not come up with an angle to pressure Elephant to back off. Oh well. Just wanted to ask t see what he would say. He also said, as have others today, that it is none of Elephant’s business as to what my daughter’s new insurance company is.
    Also, I called Elephant back today and got the same run around, being told that the state of Virginia requires this for some reason that he couldn’t say.
    So, currently searching the Virginia DMV web site for a definitive explanation, and as per usual, I am not finding anything.

    • Hi Bob,

      They are making that up… about Virginia requiring it. No such law exists. The mafia can “require” it as a term and condition of issuing a policy, of course. But the law in Virginia is simply this: Every person who registers a vehicle must state whether he has a liability insurance policy which meets the state’s mandatory minimum coverages. If not, they must pay the uninsured motorist fee. There is no requirement that any adult must provide information about the coverage of any other adult.

      Your daughter is an adult, on her own. Her coverage is between herself, the state and the insurance mafia.

  3. Once again, the big corporation established “a policy” that says they need proof of her moving to her own insurance because someone once pulled a fast one on the company and let their kid continue driving cars that were insured through the company and had an accident. So instead of “trust and verify” the rule is now “verify, because you cannot be trusted.” Guilt by association. Association with other customers, including the one who ruined it for the rest of us. Like your 4th grade teacher who made everyone stay late because that one kid acted out.

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