Can an automobile insurance company send a past due amount to a collections agency?

Asked about 1 year ago - Orlando, FL

I signed up for automatic reduction from my paycheck to pay for car insurance using a service offered by my employer. The plan was set up so that my employer would subtract the money on a weekly basis and then send it to the insurance company. I was separated from the job on March 27, 2013. My employer didn't notify the insurance company that I was separated until July 12th. At which point the insurance company sent me a $2000 bill for insurance coverage of 02/2013-07/2013. According to the insurance company they were last paid Feb 2013 and did not request the weekly payments from me or my employer. My employer stated that it was my responsibility to contact the insurance company and provide updated payment information. Per the insurance company, the bill will go to collections.

Attorney answers (3)

  1. Andrew Michael Bonderud

    Contributor Level 14

    4

    Lawyers agree

    Answered . There appear to be several issues here. First of all, yes, you are directly liable to the insurance company for any money that is past due. But, second of all, if your employer withheld money from your paycheck that was supposed to go to the insurance company, then the employer would be liable to you for that amount.

    Andrew M. Bonderud, Esq. is an attorney with The Bonderud Law Firm, P.A. He offers free consultations 24/7.... more
  2. Michael George Nichola

    Contributor Level 8

    2

    Lawyers agree

    Answered . I agree Mr. Bonderud and Mr. Watkins that your employer needs to account for any money withheld from your pay but not tendered to the insurance company or to whom the payment was assigned. Was the insurance policy a non-cancelable policy? If not, did the insurance company send you a notice cancellation? The papers you signed when you purchased the insurance and when you agreed to the payroll deductions should answer your question about what happens if the insurance premium is not paid.

  3. Joseph W Watkins

    Contributor Level 9

    3

    Lawyers agree

    Answered . Short answer... Yes. Make sure you weren't shorted by the employer. You may be able to negotiate a lower amount with the collection agency because they typically have rom to move.

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