Help two public school teachers fight back against State Farm - advice requested.
Short version:I rolled my Honda CRV two weeks ago in bad weather, totaling it, only to find out that State Farm had canceled our coverage on that vehicle a year ago without our knowledge. Predictably, they’ve refused payment, and my wife and I, two 8th grade English teachers with very limited financial means, don’t know what to do. Cancellation came after they sent three late payment notices that we didn’t address since we never received them. We were in temporary housing at the time due to a house fire from a lightning strike. Though the mail was set up to be rerouted to us, it never found us. The temporary housing was set up by… State Farm. Regardless, they sent the three letters and then canceled the policy and I’ve been driving the past year without insurance without my knowledge and am now apparently out the cost of a $10-15k car, the only good one we have.
Their position: They sent three letters as a courtesy before canceling the policy for non-payment. They aren’t obligated to do more. They do not communicate between the insurance and housing branches about their customers. We should have noticed we were not getting billed for one of the cars over the past year.
My position: Greater effort should have been made to contact us before canceling our insurance. We continued to pay for insurance with them on our Civic as well as our house insurance. Our house was empty for four months, the phone wiring fried from the lightning. All of this was known by State Farm’s Housing department. Certainly, we would never have permitted ourselves to drive our one good vehicle without insurance. We only received a bill every six months. When we did, we paid it. We never looked to see which car it was for, and so we missed the fact that bills for one car had stopped.
Our options: State Farm has already denied us coverage. I’ve filed a complaint with the State Insurance Commission, but I’m fearful nothing will come of it. I fear I’ve got a lot of moral right on my side, and no legal right. We should get a ruling from them in the next couple weeks. If we’re denied, what next? I only see two options: Hire a lawyer, which I’ve never done. What money could a lawyer hope to make off our case? If we win, would the legal costs make it pointless? If we lose, we would have made our financial problems acute. The only other option I see is to start some kind of petition, perhaps through Credo or something and hope the bad publicity makes them cave. That strikes me as a poor idea even if there was a chance of it working. I’m not sure many would care. Others have suffered worse offenses, certainly. Plus, there’s the chance of State Farm dropping us entirely in retribution.
Advice? Having never dealt with anything like this before, I’m seeking advice from those who have. The car had not been paid for, so I’m going to check today to see if State Farm notified our lender when they canceled our policy, as somebody told me they were legally obligated to do. Other than that, I don’t know what to do. The ball’s in our court, so to speak, since they’ve already denied the claim. It’s up to us to make it otherwise.
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That is the tough part to overcome.
In the eyes of the law, it's incumbent upon the insured party to notice a difference in coverage, I think.
Did your premium suddenly change?
How were you making payments all the time you were out of a regular home?
I agree that the moral argument is yours, but I don't think there's a lot of hope in winning a case and wouldn't waste the money except in an exploratory way, like $50 for an initial consultation through the bar.
Credo might help, some kind of effort like that might help.
Good luck with whatever strategy you decide to pursue.
I track my finances like a hawk, and can't imagine I'd not notice a huge drop in insurance payment. I also inspect every bill before sending a "check." Surprising how many BS third party charges end up on my phone bill, for instance.
I'm a teacher. Money is tight. Budgeting is a necessity, I don't wait for USPS to tell me when and what I have to pay.
Before this, did you receive two separate bills for your car insurance, or one? Could you get confirmation (online or otherwise) of when the notices were sent? Did you miss calls as well?
All of this could have been avoided if you'd just looked at the bill 
and wouldn't you get a new policy every 6 months? You'd have to look at that?
Further assuming that they were both purchased through the same State Farm agent. If that's the case, you might, just might, have a cause of action against the agent who should have seen to it that your mailing address was appropriately updated on all of your policies after the fire. It is for such things that the agent receives his/her commission. I'm not entirely sure how things work with State Farm, so I don't know if you are required to go through one of their agents to buy from them or if you can purchase directly, as through Geico and some others. But if you do have an agent, that's the only avenue that I see that you might be able to pursue. State Farm is likely in the clear.
If you didn't purchase through an agent, my guess is you're going to be SOL on this all the way around. In most states, and I assume Indiana is among them, an insurer only needs to be able to demonstrate that they mailed the statutorily required notice of termination for non-payment of premium. It sounds as if they sent you the bill (to the last address that they had on file for the policy that covered that car), then a follow-up (that's the "courtesy"
and then notice of termination (which is required by law), and I'll guarantee you that a company as big as State Farm doesn't cut corners in record keeping of such things. It's in their best interest to dot those I's and cross those T's. So, at the risk of sounding unsympathetic to your situation, just how much of a "greater effort" do you expect them to exert? They made three attempts to get you to pay your premium with no response from you. How were they to know that you hadn't sold the car or insured it elsewhere and were just allowing the coverage on that vehicle to lapse? And yes, you should have noticed that you weren't being billed for, and therefore you weren't paying for, coverage for that car. Who else should be responsible for that? And be real here, at the time when they were billing you, they couldn't have know that you would have an accident that they would have to pay for, so at that juncture, they'd certainly have preferred to have received your payment and continue your coverage.
It's a lousy set of circumstances for you and I do have a certain amount of sympathy for your situation, but from what you've said, the insurance company did all that they are required to do.
