I want to relate a personal experience that has opened my eyes to the auto insurance industry. Back in 2005 my wife had a slight “fender bender” with a young driver. After exchanging information the other driver made mention that he was going to get a “whole new car” out of this event. Not exactly, but he said he would require the insurance company to give him a complete new paint job. My wife’s car had a minimal scratch that was buffed out in a mater of seconds and his damage was not much more.
Knowing very little about auto insurance and due to the fact that the other driver was adamant that he would make a claim we informed our insurance company about the incident. Our insurance advisor said we did the right thing and notified the insurance company of a pending claim. We never heard anything further but saw our premiums increase for the next three renewal years. We only assumed that the other driver had made a claim, our insurance company had determined my wife to be at fault and they had made a settled the claim with a payment.
As the years went by, our premiums seemed to be getting out of hand so we decided to shop around this year only to discover the “paid claim” notation on our policy was a black eye on our record. No competing insurance company would come even close to our premiums. It was all because of this claim on her record.
I could not believe the other driver had actually made a claim so began to make enquiries. I wanted to have details about the claim and how much was actually paid to the other driver in 2005. Our insurance company was not much help, but then we stumbled upon Autoplus reports. By signing an authorization, Autoplus was able to send a complete record of any and all insurance claims made by my wife. There was no cost to receive the report and it came to us by mail within two weeks. It went back to the mid 1980’s. To our amazement there was never a claim paid, not one.
We confronted our insurance company with this information and demanded an explanation on their justification for charging extra premiums and noting a paid claim on our insurance record. After a number of months we finally had this paid claim notation removed from our 2008-renewal document. We made a request that they reverse the extra premiums charged for the past three years. After almost four months from the beginning of our initial enquiry we received a refund cheque for more than $750. That refund represented a return of the extra premium that was collected in 2006, 2007 and 2008.
I did not take this incident personally. We were caught up in a “systems” problem. We needed human intervention to have the problem resolved. As long as the paid claim was on our record we would continue to have extra premiums charged and competing companies would have a difficult time giving us a competitive quote.
If you have a questionable claim on your insurance record you can go through the same process and determine if indeed the extra premium you are paying is justified. Ask your insurance company for proof that they actually paid a claim. If they cannot, or they will not supply this information, you can contact CGI Insurance Business Services and request your Consumer Autoplus Report. It will show the history of paid insurance claims made against you. You can then confirm if the extra premium you are paying is justified.
This is a monthly article on financial planning. Call or write to Rick Sutherland CLU, CFP, FDS, R.F.P., of Fundex Investments with your topics of interest at 613-798-2421 or E-mail at rick@invested-interest.ca.