Collection of an Auto Insurance Balance

[circuitshitty]

I recieved a misquote from Allstate Insurance because of multiple errors that were made on their part. I filed a complaint with the Michigan State Department of Insurance and Financial Services and they are currently performing an investigation on my complaint.

At the moment I have an outstanding balance of ~ $400 from when I cancelled because Allstate never took the monthly payments out of my bank account in the previous 2 months that I was with them for and I do not wish to pay them until the State finishes up their investigation.

So here are my 3 questions:

1) Can Allstate send my balance to a collections agency when I have told them that I am not paying anything until the State finishes up their investigation?

2) Can insurance companies legally raises your rates due to a misquote that was their own fault i.e. I gave them the proper documents but they typed the information in incorrectly.

3) If Allstate does send my balance to a collections agency, can I fight it so it does not go on my credit report?

Thanks!

[Mr. Knowitall]

If you have a past due balance which you are refusing to pay, it is quite possible that the creditor will refer the balance to a collection agency. I don't know the nature of the state investigation, or what Allstate might do while it is pending. You don't indicate if the $400 is for the original rate or adjusted rate. If it's the original rate, what's your excuse for not paying?

Of course an insurance company can adjust your rate based upon accurate information, if for some reason there was an error when the original rate was calculated.

If you object to material that is on your credit report, you can dispute inaccurate information.

[circuitshitty]

The $400 is for the original rate, which was a misquote. My excuse for not paying is because of this: 1) I would never have signed up for insurance with them to begin with if they had not provided me the correct quote to begin with and 2) We both signed a document stating that they are responsible for taking out the funds directly from my checking account

It would appear to me that Allstate gives out misquotes to their customers and then corrects them and expects us to pay the difference. Had I not recieved the misquote, I would have told Allstate to stick it and I would have looked for cheaper insurance elsewhere.

I will dispute this if they send it to a collection's agency and they will also be seeing me in court cause I feel I should have all of my money refunded to me because I would have never signed up for the policy to begin with if they had given me the correct quote.

[Mr. Knowitall]

I am pretty sure that whatever you signed in relation to direct payment made you responsible to pay until direct payments began, and for any shortfalls afterward. Given that the amount is what you agreed to pay, I don't see that you have any defense to paying just because they later adjusted your rate upward based upon the error.

[circuitshitty]

I just thought I'd let you all know that my defense held up and Allstate was forced by the State of Michigan Department of Labor and Economic Growth: Office of Financial and Insurance Services to withdraw their collections from my outstanding balance of $400+ due to a misquote.

Thanks for all your help and advice!

[aaron]

That's a good outcome. Congratulations.