Lapsed Insurance?

Discussion in 'Legal Issues' started by TMNT, 28th Sep, 2016.

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  1. TMNT

    TMNT Well-Known Member

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    Was wondering what the accepted or common procedure for lapsed insurance,

    assuming you are not renewing, and forget to inform the insurance company,

    obviously 30-60 days after no payment and a few reminders the policy will be cancelled ( as per common sense)

    do insurnace companies send you out a bill for the 30-60 days?

    legally, are you liable?

    however if there was a claim to be made during the 30-60 days , I assume you can make a claim?

    or does it depend if you make the claim after paying the pro rata?
     
  2. herenow

    herenow Well-Known Member

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    I would assume, like any business, the minute your paid period expires, you're uninsured.

    It's not the insurance companies job to provide a safety net to those that let their payments lapse. That doesn't make business sense.

    The first thing the insurance company did when I made a claim for fire damage was check my policy/insurance status. From that point onwards in their reports/updates, I was referred to as the insured (or a similar word).
     
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  3. Stoffo

    Stoffo Well-Known Member

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    It normally states on the policy that cover expires on 28/09/2016 at midnight.
    So if you haven't paid you're uninsured :eek:
    Though most will send a reminder, and are happy to take your money a month later and back date it the month:rolleyes:
     
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Like car rego if you dont pay you are uninsured at a specific time (sometimes 4pm for some reason). The exception is pay by month which often auto renews after they send a reminder. If a claim occurs with a pay by month the insurer will firstly collect the annual premium and deduct this from the claim benefit then payout. Insurers wont pay if you havent paid them...Rule 1 of insurance policies ifs to deny claims to those who didnt pay for cover.

    Once upon a time insurers issued covernotes which gave cover for a policy and you could pay within XX days. They dont do this anymore with debit and credit cards and BPay and pay by month options.

    If you have a mortgage you could also be in default with lender conditions which require continued property insurance that names the lender as a interested party.
     
  5. TMNT

    TMNT Well-Known Member

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    that sounds right with car insurance etc. but Isnt it different with house insruance?

    eg most people pay annually, and if your policy says it expires at midinight, they usually send you a few warnings about policy expiration

    so you have to ignore a few until probably a final warning, saying, we will cancell tomorrow if we dont hear from you
     
  6. New Town

    New Town Well-Known Member

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    But once it expires there is nothing to cancel
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    With life insurance I believe they do give you a short grace period and several warning letters. If you don't pay they then will cancel. They won't chase you for the few months grace period.
     
  8. Marg4000

    Marg4000 Well-Known Member

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    If it is a genuine oversight you can probably reinstate the policy by paying the premium, providing the risk is unaltered.

    But if the policy expires, your house burns down and then you try to reinstate then I don't like your chances.....
    Marg
     
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  9. Stoffo

    Stoffo Well-Known Member

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    True
    Depending on the policy/membership wording........
    Most "union" memberships" (and WORKCOVER premiums) state that "the premium/fees are due no matter what", unless/until "due/prior notice is given in writing" !!!!
    In other words, they continue and accumulate fees until such a time as you give notice.....
    (They ALL seem to have better lawyers [deeper pockets] than most of us)
     
  10. Joynz

    Joynz Well-Known Member

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    Last year, the insurance company (GIO ) didn't send me a reminder letter for my house insurance.

    Eventually, after a few weeks, I called them. I wasn't happy! They said, however, that they always give a grace period and if anything had happened, I would have been covered. I found that a bit hard to believe.

    They couldn't renew on the day I called them due to software issues. 'Wait until Monday', they advised.

    I called RACV immediately and took out a new policy. Just wasn't prepared to risk even a couple of days.
     
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  11. moyjos

    moyjos Well-Known Member

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    100% ....Way back in 1995 we bought a fire damaged house. The insurance was expired by 2 days. Apparently the old lady's family appealed to the ombudsman with the reasoning that Mum had been a Suncorp customer for many years, but to no avail.
    Suncorp refused to pay. As a result I ALWAYS make sure all our insurances are paid well on time.
     
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  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Insurance companies first rule is to find a way to decline a claim.
    Dream on, I had the same issue with my lotto ticket. I was going to pick those numbers.
     
  13. TMNT

    TMNT Well-Known Member

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    I think you might be wrong
    I had a policy that i didnt renew and forgot to inform the insurance company.
    When i informed them that i wasnt continuing they sent me a pro rata invoice
     
  14. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    You werent making a claim. You asked to cancel. I bet if you didnt call they would have cancelled and never sent a final adjustment bill (unless it was pay by month)
     
  15. Joynz

    Joynz Well-Known Member

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    I renewed my home insurance on Sunday.

    It was the last day of the policyand I mentioned to the sales person - who was running various versions of excess etc - that I was going to decide that day.

    She said no worries, as an existing policy holder, we cover you for a certain amount of time even if you don't renew but the due date.

    However, when I got the revised renewal quote it clearly said that coverage only lasts until the last day of the policy.

    So, I made sure I renewed on that day! Just in case.

    Be interesting to try and make a claim after the expiry and see what happens.
     
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  16. Bran

    Bran Well-Known Member

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    I got a letter last week - "your policy has been cancelled on July 31"

    I suspect I missed redirecting the payment when my CC got cancelled (someone went shopping on mAcys)

    Uninsured for 3 months without notification. I signed up elsewhere and consider it a win.
     
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