Transportation

State Farm Cancelled Our Car Insurance and It’s Not Fair

Written by Steve Rhode

Question:

Dear Steve,

After 3 or more decades with State Farm, my auto and homeowners were not renewed. Three accidents occurred while my husband was backing out of grocery store parking lots.

One accident was dropped due to deferred adjudication. Dates were 12/15/2020, 6/22/2019,
And 10/1/2018.

The deferred adjudication was 1/14/2020.

The lady in the local State Farm office said to my husband that if I signed the truck over to myself only we could do that, and my husband not drive. He turned that offer down.

We were told that we had no option of keeping homeowners insurance. The reason was it would cost another $1 thousand without bundling with auto.

I’d had another agent for a short while before this one who sold me umbrella insurance, but the last State Farm agent canceled it and couldn’t tell me why.

I’d been billed at some arbitrary times and may have been late, but I‘d made it clear I wanted every 6 months billing. This was never addressed with me. I called the #800# if I wasn’t sure when to pay.

Is age 65 old enough to qualify for your assistance? So I called the local Pearland, TX office.

My husband is facing outpatient surgery for 3 types of skin cancer all over his body of 3 types in the next few weeks:
1. Basal cell carcinoma
2. Squamous cell carcinoma
3. Melanoma.

These things could all account for the situation we find ourselves in.

I’ll try low-income taxpayer’s clinics. TransUnion suggested this would be possible when I looked up Elephant Insurance, and there was a reference to this law.

Barbara

Answer:

Dear Barbara,

I’m so sorry to hear about the cancer battle your husband is facing. That is tragic.

On the State Farm issue, it seems they canceled the policy due to excessive claims involving your husband. That is not unusual.

By their very nature, insurance companies deal in managing risk. They find their profit between what they charge for coverage and what they have to payout. So someone that has demonstrated a high risk is just much more likely to be canceled.

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I had a good friend that had his car stolen, and when it was recovered, the insurance company canceled him.

Your best bet will be to contact an insurance broker that represents several different insurance companies. They can see if anyone is willing to insure your accident-prone husband. I agree with you that his underlying medical issues could be a factor in his recent collision activity. While that might be an explanation, it is not an excuse.

Insurance companies can certainly decide who they want as a customer. You indicated you are in Texas. Here is some information from the Texas Department of Insurance that may help.

How do companies decide what to charge me?

Insurance companies use a process called underwriting to decide whether to sell you a policy and how much to charge you. The amount you pay for insurance is called a premium.

Most companies consider these things when deciding your auto insurance premium:

  • Your age. Men under 25 and women under 21 usually have the highest rates. Rates go down as people reach middle age, but they go up again after age 70.
  • Your driving record and claims history. Insurance companies will charge you more if you’ve had accidents or gotten tickets. Some companies might refuse to sell you a policy.
  • Where you keep your car. Rates are higher if you live in a city. This is because people in cities are more likely to have accidents or have their cars stolen than people in rural areas. Rates can also vary between ZIP codes in the same city.
  • The kind of car you have. Collision and comprehensive rates are highest for luxury, high-performance, and sports cars. Rates are also higher for cars that cost more to repair.
  • How you use your car. Your rates will be higher if you drive your car to and from work or use it for business.
  • Your credit score. Some companies use your credit score to decide what to charge you. To find out which companies use credit scores, visit HelpInsure.com.
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Insurance companies check your claims history.

Most companies use the Comprehensive Loss Underwriting Exchange (CLUE) to learn your claims history. A company can charge you more or refuse to sell you a policy based on the information in your CLUE report. You can get a free copy of your report each year. Call LexisNexis at 866-312-8076.

Learn more: How to get a CLUE about your claims history.

Your rights

An insurance company may not:

  • turn you down or charge you more because of your race, color, religion, or national origin.
  • turn you down or charge more because of your age, gender, marital status, geographic location, or disability unless the company can show that you’re a greater risk for a loss than other people it’s willing to insure.
  • turn you down, charge you more, or treat you differently than other people in your rate or risk class unless the company can show that you’re a greater risk than others.
  • turn you down or charge you more only because of your credit score.” – Source

In Texas, you should call the Texas Department of Insurance at 1-800-252-3439 to confirm State Farm is treating you fairly. If you feel State Farm has wronged you, you can file a report when you call.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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