Do I have any recourse to collect a refund if an insurance company has been collecting premiums from me for vehciles that, by their recent admission, they would not have covered in the event of an accident?

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Do I have any recourse to collect a refund if an insurance company has been collecting premiums from me for vehciles that, by their recent admission, they would not have covered in the event of an accident?

I recently purchased a new car and called my insurance company to add the vehicle to my policy and remove an old one. It was at this time that I was informed that all registered owners had to be listed on the policy this was not the issue. The issue came in when I asked why they insured my previous vehicle, which was still registered in my mother’s name, without her being on the policy. The agent told me that they should not have insured the vehicle and, had an incident occurred, that they would have denied the claim. Then it dawned on me that they also insured my husbands previous vehicle that was not registered in his name either. So for 3 years they were collecting premiums from me for essentially no service and would have caused me legal issues had an incident occurred. Do I have any recourse to collect any, if not all, of that money back?

Asked on January 9, 2017 under Insurance Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

In theory, yes, you should be entitled to recover the premiums you paid under a theory of "breach of contract": the insurer was breaching or violating its obligations by not providing what you were paying for.
In practice, it may be difficult: if they will not voluntarily repay you, typically, you'd have to sue for the money (e.g. in small claims court). There you would have to prove they would not have covered you, which could be difficult if they now deny it: since no accident in fact occured, and there is no instance of them denying coverage, we don't know for a fact what would have occured had you submitted a claim. So unless they have given you a written admission which you could produce in court, you'd have to count on having someone from the insurer admit the lack of coverage in court.


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