Insurance Co. Request to sign Policy Cancellation

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mb2016
Posts: 22
Joined: Wed Aug 24, 2016 8:30 am

Insurance Co. Request to sign Policy Cancellation

Post by mb2016 »

I shut down my small consulting LLC a few months ago and emailed my insurance company that I would not be renewing the commercial general, auto and umbrella liability policy after receiving a recent invoice. I thought that would be the end of it, especially when they didn’t get any funds by the deadline. The local agent’s office immediately replied they received my email. But now they are repeatedly calling and emailing a request to sign a Cancellation Request / Policy Release. I’m not inclined to sign it for some reason, but should I? Or am I giving up any rights I need to retain by signing? Would there be any negative future consequences for not signing it, say if I started another business and and needed coverage? I don’t anticipate any claims. Appreciate any insight or advice.
123
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Re: Insurance Co. Request to sign Policy Cancellation

Post by 123 »

There may be uncertainty (in their opinion) about the specific date the policy/coverage should (have) end(ed). The ending date of coverage is significant because it could impact whether a partial refund of premium is necessary (could vary by insurance company/state/product line).
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z91
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Re: Insurance Co. Request to sign Policy Cancellation

Post by z91 »

JMHO but it may save you some headache to sign it. My mom owns a small business which is about to close due to COVID (timely with retirement year anyway, but I digress), so she canceled her insurance. Same as you OP, she called them up and told them her intention to stop coverage and she thought that was it. The agent had called her multiple times, in a threatening manner, to sign paperwork or send out a letter with the intent to cancel.

It got so bad she called me and I called up the company (not the agent) to stop calling her, as she was not going to renew the policy.

I suspect this is due to the company wanting to confirm the actual date, and shows as "evidence" that the agent actually tried to sell the renewal. If you cancel online there's no form to sign, but the next day is when my mom started getting calls. The first few calls were asking if the business had any chance to resume. Then later it was to get my mom to fax in the cancellation.

I think this all depends on the insurance company though, and I'd double-check to make sure they aren't going to automatically try to renew it for you.
BuddyJet
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Re: Insurance Co. Request to sign Policy Cancellation

Post by BuddyJet »

My guess is that your policy is written as “claims made” rather than occurrence so the signature is clear proof of when the policy ended and they aren’t responsible for claims. For future claims, ask about tail insurance.

When we sold our business, our insurance agent mentioned tail insurance but we decided to go naked.
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Stinky
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Re: Insurance Co. Request to sign Policy Cancellation

Post by Stinky »

I'd sign the request.

OP, do you see some downside to signing it?
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bberris
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Re: Insurance Co. Request to sign Policy Cancellation

Post by bberris »

I don't know what the release says, but I would make very sure that you aren't releasing the co from future claims based on events while the policy was in force.
rjbraun
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Re: Insurance Co. Request to sign Policy Cancellation

Post by rjbraun »

My understanding is that depending on the state, and perhaps other factors, a grace period may exist for policies. Let's say OP's policy ended July 31, but state law requires a grace period of x during which insurer would be required to reinstate OP's policy if they paid premium due.

From a risk management standpoint I would think the insurer would need to allow for this potential policy reinstatement. But, by obtaining the OP's signed release, the insurer could instead close out the risk exposure. Of course, OP's particular policy may not represent so much risk to the insurer's overall portfolio, but maybe it's just part of the company's overall risk management process.
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gasman
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Re: Insurance Co. Request to sign Policy Cancellation

Post by gasman »

Stinky wrote: Sat Sep 12, 2020 5:29 am I'd sign the request.

OP, do you see some downside to signing it?
Probably just natural and understandable suspicion on the motives and incentives of the company.
Topic Author
mb2016
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Re: Insurance Co. Request to sign Policy Cancellation

Post by mb2016 »

gasman wrote: Sat Sep 12, 2020 10:29 am
Stinky wrote: Sat Sep 12, 2020 5:29 am I'd sign the request.

OP, do you see some downside to signing it?
Probably just natural and understandable suspicion on the motives and incentives of the company.
Exactly...here’s the release verbiage. The undersigned agrees that:
-The above referenced policy is lost, destroyed or being retained. (Makes no sense to me)
-No claims of any type will be made against the Insurance Company, its agents, or its representatives,
under this policy for losses which occur after the date of cancellation shown above.
-Any premium adjustment will be made in accordance with the terms and conditions of the policy.
bberris
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Re: Insurance Co. Request to sign Policy Cancellation

Post by bberris »

That is the kind of wording that would concern me. A loss could occur after cancellation of the policy which the claimant says is a result of events that happened during the policy period.
rjbraun
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Re: Insurance Co. Request to sign Policy Cancellation

Post by rjbraun »

mb2016 wrote: Sat Sep 12, 2020 12:23 pm
gasman wrote: Sat Sep 12, 2020 10:29 am
Stinky wrote: Sat Sep 12, 2020 5:29 am I'd sign the request.

OP, do you see some downside to signing it?
Probably just natural and understandable suspicion on the motives and incentives of the company.
Exactly...here’s the release verbiage. The undersigned agrees that:
-The above referenced policy is lost, destroyed or being retained. (Makes no sense to me)
-No claims of any type will be made against the Insurance Company, its agents, or its representatives,
under this policy for losses which occur after the date of cancellation shown above.
-Any premium adjustment will be made in accordance with the terms and conditions of the policy.
Even if you wanted to sign, the first representation doesn't apply to you so you couldn't sign (honestly).

Your state insurance department probably has a consumer hotline for complaints, inquiries, etc. How about contacting them for advice, in addition to complaining about the local agent's incessant calls?
AznSaver
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Re: Insurance Co. Request to sign Policy Cancellation

Post by AznSaver »

mb2016 wrote: Sat Sep 12, 2020 12:23 pm
Stinky wrote: Sat Sep 12, 2020 5:29 am I'd sign the request.

OP, do you see some downside to signing it?
Probably just natural and understandable suspicion on the motives and incentives of the company.

Exactly...here’s the release verbiage. The undersigned agrees that:
-The above referenced policy is lost, destroyed or being retained. (Makes no sense to me)
-No claims of any type will be made against the Insurance Company, its agents, or its representatives,
under this policy for losses which occur after the date of cancellation shown above.
-Any premium adjustment will be made in accordance with the terms and conditions of the policy.
It's a legal/risk issue with the company that's why they want a signature.
If you don't feel comfortable signing their cancellation form sent them a certified letter signed with your intent instead.

I, your name am requesting cancellation of policies : list policy/account numbers to be effective date
sign...

Every Ins. company I ever worked for did not recognized emails nor phone conversations to be binding (legally obliged change) for a policy.
On more than a few occasions I had a voicemail left with a policy cancellation and later on a sobbing or angry customer calling about something happened requiring a claim for said policy. if a policy is cancelled without a signed form it is possible that if a claim were to occur the company could be still on the hook. Without documentation you could be listed as cancellation for non-payment
Topic Author
mb2016
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Joined: Wed Aug 24, 2016 8:30 am

Re: Insurance Co. Request to sign Policy Cancellation

Post by mb2016 »

AznSaver wrote: Sun Sep 13, 2020 10:44 am
It's a legal/risk issue with the company that's why they want a signature.
If you don't feel comfortable signing their cancellation form sent them a certified letter signed with your intent instead.

I, your name am requesting cancellation of policies : list policy/account numbers to be effective date
sign...

Every Ins. company I ever worked for did not recognized emails nor phone conversations to be binding (legally obliged change) for a policy.
On more than a few occasions I had a voicemail left with a policy cancellation and later on a sobbing or angry customer calling about something happened requiring a claim for said policy. if a policy is cancelled without a signed form it is possible that if a claim were to occur the company could be still on the hook. Without documentation you could be listed as cancellation for non-payment
Thank you. I just mailed them a certified letter. Seems a bit shady not to recognize an email for cancellation and then list someone for non-payment. I recently switched insurance companies for personal auto/home and they (different company) accepted an email cancellation without hesitation.

Regarding this: “if a policy is cancelled without a signed form it is possible that if a claim were to occur the company could be still on the hook.” ...if the claim involved work that occurred while the policy was in place, shouldn’t they be on the hook no matter how one cancels?
wfrobinette
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Re: Insurance Co. Request to sign Policy Cancellation

Post by wfrobinette »

mb2016 wrote: Fri Sep 11, 2020 8:51 pm I shut down my small consulting LLC a few months ago and emailed my insurance company that I would not be renewing the commercial general, auto and umbrella liability policy after receiving a recent invoice. I thought that would be the end of it, especially when they didn’t get any funds by the deadline. The local agent’s office immediately replied they received my email. But now they are repeatedly calling and emailing a request to sign a Cancellation Request / Policy Release. I’m not inclined to sign it for some reason, but should I? Or am I giving up any rights I need to retain by signing? Would there be any negative future consequences for not signing it, say if I started another business and and needed coverage? I don’t anticipate any claims. Appreciate any insight or advice.
I had to do the same thing for my home/auto and umbrella recently. It's becoming common practice.
atikovi
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Re: Insurance Co. Request to sign Policy Cancellation

Post by atikovi »

mb2016 wrote: Tue Sep 15, 2020 8:53 am Seems a bit shady not to recognize an email for cancellation and then list someone for non-payment.
Emails are faked all the time. And how is the insurance co supposed to know YOU called them to cancel? Say you didn't want to cancel but someone accidentally or maliciously transposed policy numbers when calling to cancel, and then you have a loss after it's "cancelled."
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