Pulse Insurance Agent's Blog

Pulse Insurance Agent's Blog

October 8, 2008

Cancelling your EFT (automatic payment) insurance policy

If your policy is set up with an Electronic Fund Transfer (EFT) feature, you must make sure you give the insurance company sufficient time to stop those payments. All insurance companies require prior notice to stop an EFT. The standard time frame for stopping one of these payments is 10 days, although sometimes we can still make it happen with 5 days notice. We will be unable to stop your EFT payment if you call 2 business days before it is due to be withdrawn.

The EFT will not stop at the end of your policy unless you stop it. The form you sign when you started the program says you will automatically renew your policy unless you change the form in which you make your payment.

You may then choose to pay over the internet (via our website), by mailing your payment to the insurance company (mailing it to our office will delay your payment), over the telephone, or in your insurance agent's office. If you are starting a new policy, you may be switching insurance companies. Even if you keep the same agent, you must stop EFT's with your existing insurance company before switching to a different one that offers the coverage and price you want.

Please read your application before you sign it, and if you are going to sign up for EFT, make sure you make a mental note of the stated amount of time the insurance company requires to discontinue these payments.

This is a good program, and can save you money in billing fees. But it can also cost you money if there is a problem with your insurance premium payment.

October 2, 2008

There are some obvious things can affect your rates: repeat accidents, adding a teenager to your policy, DUI/DWI convictions, tickets of that sort. There are three things you can do that you may increase your rate that you might be unaware of.

1. Forgetting to Submit Forms

If you declined to purchase certain coverage, exclude drivers in the household, or if you are required to provide proof of prior insurance, you have a specified amount of time to submit the forms to your new insurance company or agent. If your form declining coverage or excluding a driver or proof of prior insurance is not postmarked by the date it is supposed to, your insurance rate will probably go up. This is because the price you were given was based on your decision that you don't want the coverage, the excluded driver will not be driving your vehicle (ever), or your declaration that you had at least 6 months of prior insurance. If you forget to send the requested information, that declined coverage may have to be added to your policy, or the insurance company may assume you did not have prior insurance since it did not receive proof that you did.

2. Buying a New Car

Getting a new car is exciting, but remember that you may pay more to insure it. Assuming nothing else changes, the cost of insurance generally goes down as your car ages. Though your new car may not require you to invest a lot of money in maintenance costs, you probably will invest more money in auto insurance for it - especially if you add coverage likes Comprehensive, Collision, Rental Reimbursement or towing.

3. Moving to a New Area

If you decide to move to a new city or even a new neighborhood, it could affect your insurance rate. This could go either way, as moving to a safer city might actually lower your rates. However, if you move from a smaller city to a larger city, or if you move to a densely populated city, your rates could be significantly higher due to a higher likelihood of accidents.

April 8, 2008

Electronic Funds Transfer (EFT)

Customers that are on EFT (Electronic Fund Transfer or Automatic Payments) sometimes call and want to know why their checking account hasn't been charged for their premium.

This can happen because the insurance company sends out the request from their bank to your bank. It can take up to three days for an established policy to charge the premium. For a new policy, it may take up to five days. Be careful though, I would never count on having a "float," about the time you do, they will take it on the exact pay date.

Remember that the due date for your premium is the due date. If the insurance company has drafted AFTER the due date in the past, that does not change your due date, and they probably will draft on the actual date in the future.

Please read your EFT disclosure form for exact details.

March 18, 2008

Automatic Payments or EFT

Should you go on automatic payments or not? I have this question all the time.

Automatic payments are great for individuals that have a checking account and have regular paydays. You pay a lower billing fee (yes in most cases there is still a fee). You don't have to worry about whether you remembered to send it in, and you don't have to call your agent to make your payment. Those are the positives.

However, if you have troubles in your account, or you don't want to renew with the company you are currently with, you have to give the insurance company notice. Otherwise, the instructions to withdraw the premium will have already been sent to your bank, and they (nor will we) won't be able to stop it. The stated length of time they need is 10 days. So be aware.

March 17, 2008

Renewal Date and Grace Periods

When customers reach their policy renewal date two things happen in many cases:

First, they don't realize that they have no grace period on the renewal premium. Sometimes, customers get accustomed to paying a few days late, and simply pay the late fee with the premium. While not the best situation, this works for them. However, when the 6 month contract between the insurance company and the policy holder is over, IT IS OVER! The insurance company does not have to, and doesn't, give a grace period for the renewal premium. It is always due THE DAY BEFORE the renewal, or ON THE LAST DAY of the 6 month contract. The contract has ended, it no longer exists, and the insurance company owes no further notice than the renewal notice they sent to the insured.

Second, they don't plan for a new down payment. A new 6 month contract is beginning, and a down payment will be required. Depending on the carrier, that could be 16% to 25% of the total 6 month premium.

Bottom line is that when the contract is over, it is over. You have to start fresh (even if you are renewing the contract with the same carrier) with a down payment and commitment to the insurance company.

March 14, 2008

Changing Due Date

I had a call today from a customer who wanted to change the due date of his premium. Two of the carriers will allow you to move your due date forward if you are on automatic payments, so that it is paid sooner. None of them will let you move it past your actual due date.

Your premium due date is set at the time you apply, and in most instances is due every 30 days. Depending on the carrier, that could mean on the same date every month, or it could be literally every 30 days. Make sure you clarify this if your payment date is important to you.

One of our carriers requires the first payment in 25 days, then every 30 days after that. For example, if you got your policy on the 6th of the month, your first monthly payment would be on the 1st of the next month, and subsequent payments would be on the 1st of every month. The good news with this carrier, is that you only make a total of 5 payments, including your down payment. The last month, there is no payment. They are also often the carrier with the lowest down payment. Again, make sure you look at the payment schedule if this is important to you.

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