Personal Finance

Home insurance- Do i still have coverage when i haven't pay?

  • Last Updated:
  • Nov 3rd, 2020 10:15 am
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[OP]
Newbie
Nov 25, 2018
7 posts
4 upvotes

Home insurance- Do i still have coverage when i haven't pay?

12 days ago, I went to a new insurance agent to get new home insurance. However, the agent didn't charge me upfront and just took my credit card info. I signed the application for the home insurance document listing all the terms. However, up till now they still haven't charged me any money. My existing home insurance expired 5 days ago. When I called my agent, was told she is waiting for paper works from the insurance company before submitting payment. Was told not to worry, that I am still under coverage. With other insurance that I purchased before they always charge me upfront. Why would an insurance company provide me any coverage when they don't have any payment? Do I currently have any insurance coverage during this application period when they haven't charged me any money?
4 replies
Deal Addict
User avatar
Oct 13, 2007
3386 posts
2003 upvotes
Edmonton
Didn’t you get any documents, receipt, copy of application, etc.? If you just gave a credit card number, the insurance company accounting department will only process this once your policy is underwritten as they need to match the payment to your (yet to be issued policy).

If you still have a concern, ask for a Certificate of Insurance as evidence of coverage.

Your agent likely has binding authority and coverage would be in effect for the promised period until such time as you hear otherwise.
Deal Addict
Jan 19, 2017
3754 posts
2165 upvotes
pbluescript wrote: 12 days ago, I went to a new insurance agent to get new home insurance. However, the agent didn't charge me upfront and just took my credit card info. I signed the application for the home insurance document listing all the terms. However, up till now they still haven't charged me any money. My existing home insurance expired 5 days ago. When I called my agent, was told she is waiting for paper works from the insurance company before submitting payment. Was told not to worry, that I am still under coverage. With other insurance that I purchased before they always charge me upfront. Why would an insurance company provide me any coverage when they don't have any payment? Do I currently have any insurance coverage during this application period when they haven't charged me any money?
Technically you have no insurance coverage from the new company because they have not approved your application yet until your application was processed.
Deal Addict
Jan 21, 2018
4152 posts
4250 upvotes
Vancouver
I would say that @ml88888888 is right on this one. You are a new applicant who has not yet been formally accepted as a client, and your payment has not yet been accepted by the insurance company. You can be guaranteed that the insurer would deny any significant attempted claim. Your broker cannot be trusted to advise you on this, as it is in his best interests to provide you empty assurances and let things proceed in hopes everything will be fine.

There are other circumstances where it is unclear if you are insured. Two I have encountered:

- House insurance policy cancelled with one insurer and moved to another as of the renewal date. Somehow the first insurer didn't get the message and sent a demand for back-payment 3 months later, in spite of their statement that insurance was automatically expired if they didn't get payment by the due date. So the question is, suppose that there wasn't coverage from a new insurer, and there had been a claim during those 3 months? Would the insurer have paid? I'm pretty sure they would have refused to pay, relying on the fact that they hadn't been paid and their clear statement that the insurance expired on the due date in that case. So how can they charge for a period when they weren't actually offering any coverage?

- An employee didn't realize that they had to notify the company benefits insurance provider when they got married, even though there was no change in coverage and the spouse was covered elsewhere under their own benefits plan. This wasn't discovered until an annual update almost a year later. The insurer said that their rate is higher for married employees because of potential increased insurance liability even though there is no specified coverage for the spouse. They demanded payment of increased fees for back coverage over the last year, even though there hadn't been any claims. But guaranteed they would not have paid any claim since they hadn't been notified of the change. How then can they demand fees for coverage not provided?
Deal Fanatic
Oct 26, 2008
6346 posts
1984 upvotes
BC
pbluescript wrote: ....... My existing home insurance expired 5 days ago .......... Was told not to worry, that I am still under coverage.
Your agent knows what they are doing. Even though your old term expired 5 days ago you, that policy for most insurance companies remains active until it is cancelled in writing.
(Time limits apply of course, but in effect you are in arrears but still covered until your agent cancels that old policy.)

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