Insurer Asks for More Money After Premium Paid
My husband and I have owned a small business for 40 years. We've always paid our bills, had an excellent reputation and credit history.
Penn Star Insurance Company provided us with liability and property coverage for the period of 8/21/04 - 8/21/05.
The premium for this policy was financed through their Superior Payment Plan. The total came to $4031.71 with tax and policy fee. A down payment was made of $1220.00 to our agent and the remainder was paid directly through payments of $361.94 each, and was paid in full.
On 9/13/05, a company called Overland Solutions asked for our gross receipts, which I gave to them. Then Penn Star Insurance Company asked us to pay an additional $3090.12.
I refused to pay it. Told our agent to go a head and cancel the insurance.
Now I am getting phone calls and collection letters from McCarthy, Burgess & Wolff, Clevland, Ohio.
Is this fair? Do I have to pay a lawyer to fight this for me? Do you know what action I should take? I explained to the collection agency why we did not owe it, but they have a deaf ear.
Any collection agency will have a deaf ear. They have likely "purchased" you as a receivable from the insurer, and so they have already paid for your file, and are looking to make their profit.
You may need a lawyer, just to show the collection agency that you are "serious" about not paying this amount. In most cases, if you have a reasonable case and bring a lawyer to the table, the collection agency will back off.
However, I suspect your greater concern should be your credit history for your business. Somehow you'll have to get this "blotch" taken off your record. The collection agency will need to be hounded in order for you to get the right documentation that you can send to the credit bureaus -- and it will be worth your time to do this. Again, if you have a lawyer involved, a simple letter from the lawyer may do the trick.
As for your first question, "Is this fair?", I'd have to say "no". One thing that you can do is report Penn Star to your state's department of insurance. Further, if you get your insurance commissioner or department of insurance involved, you may even be able to get Penn Star to fix the problem that you've got -- but if I were you, I'd still get a lawyer, just in case.