When Aer Stephen's Volvo suddenly threw itself into gear, backed out of the garage, rolled down the driveway, and crashed into his neighbor's car, there was one thing he could be thankful for: he had called his insurance agent two months earlier and added comprehensive and collision coverage to his policy.
At least he thought he had.
The crash happened around 10:30pm on April 30. The next morning, Stephen called the office of his independent insurance agent, Wayne Nuckols, and reported the accident. The employee he spoke to– he can't remember her name– said she'd fax the claim to the company, Montgomery Insurance Group. He didn't hear from Montgomery till May 8 (because the claim had been sent to the wrong fax number), and when he did, the news wasn't good. They had the claim– but Stephen didn't have the coverage.
He had liability insurance, sure, which he'd had all along and which would pay for the neighbor's car. But collision and comprehensive, which would have covered the $3,500 bill for his own car? Nowhere to be found.
So began Stephen's quest to prove that he had indeed arranged for the coverage, which goes like this. Stephen claims that he called Nuckols toward the end of February and said he was interested in adding collision and comprehensive, but Nuckols wasn't able to give him a quote and said only that it would roughly double his premium. Stephen called the company and got the same story: it was impossible to give an exact price, but the total would be about twice his current rate.
In the end, Stephen says, he called Nuckols' office and asked an agent (whom we'll call Lisa Rollins) to upgrade his policy. Fast forward to May 8, when he got the bad news about the nonexistent coverage. When he called Nuckols and insisted he'd told Rollins to add collision and comprehensive, Nuckols, Stephen says, was anxious to know whether the phone call to Rollins had happened before or after March 1– but allegedly wouldn't say why.
Stephen soon learned the reason: Nuckols, he says, told him that Rollins had left the agency around the first of March and was being investigated by the Bureau of Insurance for making so many mistakes.
When I spoke with Nuckols, he would neither confirm nor deny this allegation, but later in the conversation he stated that an investigator from the bureau had been to his office earlier that day. Rollins, he said, had worked for him for two years and was "a very fine lady"– so fine, he said, that the things he'd been hearing about her were especially disturbing.
In other words, for the sake of argument, let’s say Rollins had a little accuracy problem. But Nuckols also says that no matter what else she did or didn't do, she consistently documented phone calls– and there's no documentation whatsoever in Stephen's file about adding collision and comprehensive.
If there had been, Nuckols says, he would have paid for the damage to Stephen's car, either out of his "errors and omissions" insurance or from his own pocket. As proof of the unlikelihood of Stephen's claim, Nuckols asks why, if he'd arranged for added coverage, he didn't get a bill. Good question.
Stephen says that he'd just paid his quarterly premium on February 27, and, if he thought about it at all, he assumed the higher rate would show up on his next bill.
Unfortunately for Stephen, the law is not on his side. Ken Shrad, spokesman for the Virginia Bureau of Insurance, says consumers can be sure such changes in coverage really happen by looking for written documentation from the agent within a few days. (I would go a step further and ask for it outright.)
Next, consumers should get a notice from the insurance company within a week or so that spells out the changes; a bill may or may not be included.
Stephen has learned what he should have done the hard way– and paid $3,500 for the lesson.
Do you have a consumer problem or question? Email the Fearless Consumer or write her at 100 Second Street NW, 22902.