• Insurance Carrier: American Family Home Insurance Company
  • State: MD

Consumer Complaint:

I called and asked for full coverage for my motorcycle purchased with a bank loan; it’s mandatory to carry full coverage. I was involved in an accident so I called to make a claim. They said there was some confusion and would have to call back. This took 2 weeks and then they denied my claim stating I only had liability and not the full coverage I had asked for when signing up. During the original phone call/sign up interview they asked if there was a lienholder and then put them on the policy. I have been told by other sources there is no reason for my bank information unless my intentions were for full coverage. I believe there was an error on their part in filling out the form and they didn’t apply what I asked for. I didn’t question the cost since I had only asked for full coverage vs. the cost of other coverages. I failed to understand the paper work I signed as I read it to mean I had full coverage and they told me this was my fault and they would do nothing to try to fix the problem.

Insurance Expert Answer:

If you had an insurance agent, s/he is deemed to know that she should have known you normally need full coverage with a financed vehicle. (Not always though.) In that case she'd have made an important omission by failing to get you the full coverage the loan agreement normally demands -- unless you expressly said you did not want full coverage.

In most states the agent is the expert and you can rely on the agent. Here the agent could be liable for negligence -- an error or omission. BUT you seem to have contacted the insurance company yourself, and they will sell you whatever you ask for. In some states the same argument you might apply against the agent would NOT apply -- you went direct. In others it might. We don't know MD law. You may want to write to the CEO or VP for Claims of the Company, or you could take the company to small claims court.