State farm asking for back pay after they mistakenly gave me an incorrect premium amount for my address.?

  • by David R
  • Jun 17,2017
  • 8 answers

So I was a state farm policy holder until just recently. I have always updated my address each time I moved to a new location.
So I get a notice from State farm stating that because of my address change (6 months ago) I was mistakenly being billed a lower premium rate. They wanted to increase my premium by an additional $100 a month. I immediately contacted an agent and set up a policy with a new company and had the new policy faxed over to state farm to start the cancellation process just before the next pay period/ month of coverage began. I'd like to note that state farm does not have a penalty for canceling a policy nor do you have to pay for the remainder of the year (just the time you have been covered)
After contacting state farm again, they informed me that I will owe for the previous months that I was being under charged. Is that even legal? I of course am not paying them a dime.
My question is, should I file a suit to avoid these scumbags from adding this to my credit report. What legal steps should I take? After all, it was their mistake.


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Insurance Answers (8)

STEPHEN 6 months ago

You can hold them off for a long time with the "I told you at the time. It's your error".

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H. Marie 6 months ago

insurance companies are closely monitored by state agencies and what has happened here is that they have illegally allowed insurance coverage for you that was not in compliance with the rates for your area, they are not allowed to do that and they can do nothing more than charge you for the coverage you enjoyed, albeit at 'reduced' rates, you do owe for it whether you like it or not, and you think it was their fault, not yours
you would do well to pay it and be done with it

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Casey Y 6 months ago

Good Luck!!!! You wont win this one, sorry. Their attempt to retroactively increase your rate may seem shady, but its not illegal.

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lucy 6 months ago

Sorry you will lose on this one. Your insurance rates are based on zip code, your age/experience, any accidents or tickets plus your credit if good/bad.
So, it appears that when you made the last move, and your (new) zip code was $100 higher vs your prior zip code. So, yes they can bill you and you will owe or they can send into collections and also your credit report.
Unless, you can prove that 6 months ago they got your new address and that every month you received a statement (at) your current address, and only (after) my guess that your policy renewed and then they found out that your new address is $100 more, so you changed insurance companies.
Here is the thing with State Farm, is that you always have an agent. You are supposed to notify the agent of any claim or changes to your policy. It is not like you call the insurance company yourself, since you must have the agent make any changes to your policy.
Good news is that you still have an agent to ask questions. My suggestion is that you ask the new agent if in fact what they did is right/wrong would be my suggestion.

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curtisports2 6 months ago

First, read EVERY WORD of your policy with State Farm. Policy language trumps anything else. If there is language in it, even in the smallest of the small print, that says anything about a change in your address affecting your premium, then you MAY have to pay up. I say 'may', because you can send them this letter and see what happens:
"I promptly informed you of my change of address. It is not my fault you did not promptly notify me of a change in premium resulting from a change in my address. Had you promptly notified me, I would have promptly taken my business elsewhere - as I just did.
Your failure to give prompt notice denied me my right to cancel. I believe it is unlawful to sit back and wait, even if that was an oversight on your part, to attempt to enforce payment on me. I will vigorously defend myself against any attempts to collect this charge, and I will take the appropriate legal action against you should any financial damage to my good name and my good credit result from your actions. In addition, I will be pursuing the matter with my state's insurance department.'
Then see what happens and if they persist, fight them. I am guessing they will let the matter drop. But keeping checking your credit reports every so often.
If there is nothing in the policy that addresses their rights regarding your change of address, then they cannot later affirm those rights and act on them. Write them a shorter version of the same letter:
'I have read my policy and I see nothing in it that gives you the right to do what you are doing. I will vigorously defend myself against any attempts to collect this charge, and I will take the appropriate legal action against you should any financial damage to my good name and my good credit result from your actions. In addition, I will be pursuing the matter with my state's insurance department.'
Good luck, and whenever you believe you are in the right, don't roll over. Fight. These other people, with their answers... they are just blindly reacting, not taking the time to think it through.

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Donald B 6 months ago

I tried suing State Farm. The have lots of lawyers and it was not worth it

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StephenWeinstein 6 months ago

This may depend on the state where this happened. However, typically, the answer would be something like:
First, they did not "want" to increase your premium. They had to increase your premium. They might have wanted to keep it the same or lower it, but they couldn't, because that would have been illegal. They must charge the correct price for the place where you live. Insurance companies must charge what the law requires; they are not allowed to charge less, for any reason.
Second, it is legal for the to say that you owe, and it would not be legal for them not to do that. They must charge the correct price for the place where you were living. None of this is their decision. It is not legal for them not to make you pay.
Third, even if it is their mistake, they still have to make you pay. If they made a mistake by charging too little, an illegally low amount, when the law said that they had to charge more, then they must fix their mistake by making you pay what they should have made you pay earlier.
Filing a suit won't help. The judge also has to follow the law, which says that they must make you pay the amount that the law requires them to charge you.

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Amonynous 6 months ago

"I of course am not paying them a dime."
Good luck in Court with that! You WILL lose, plus you'll get to pay not only YOUR Court costs, but theirs too!
(Plus the Feds will come after you for not having had valid coverage for that time period...)

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