AAA is seeking payment even after my cancellation of coverage

Questions
1

Hello everyone,

Earlier this year, I relocated to a different state and had to make changes to my insurance coverage. My AAA agent informed me that I needed to reach out to a representative in my new state to get new coverage because my old policy wouldn’t cover me there.

Deciding to explore my options, I switched to Geico. However, last month, I received a notice from a collection agency stating that I owed AAA for approximately one month of coverage, totaling around $200.

It seems that AAA officially canceled my coverage a month later than they should have, possibly due to an oversight. Since I had already removed my credit card from the account, they couldn’t charge me for the extra month. I even spoke to an agent over the phone, informing them of my switch to a different provider because of my move, although I can’t recall the exact details of that conversation now.

I made sure to start my new coverage on the same day that my old AAA coverage expired, and I provided this information along with proof to the collection agency. However, instead of a straightforward response, they offered to settle for around $150.

This situation feels quite suspicious and frustrating to me. I’m not well-versed in handling these matters, so I’m seeking some guidance:

Do insurance companies have the right to pursue payment like this, especially when I had removed my credit card, making it impossible for them to charge me?

Is settling realistically my best option? I want to avoid being taken advantage of, but I also don’t want to deal with the hassle of this situation dragging on for months.

3 Likes
2

If I were you, I’d avoid the hassle, and settle for $150.
Just make sure you get a written agreement saying the debt is fully resolved to avoid being reported to credit bureaus.

2 Likes
3

It makes sense in this circumstance to feel perplexed and upset. Even in cases where the payment option is discontinued, insurance firms generally retain the authority to pursue unpaid payments. Although settling might result in a speedier conclusion, make sure you’re treated properly by speaking with a consumer rights group or legal counsel.

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4

It is therefore not usually the case that you are covered for an entire month by each monthly payment you make. You still owe money if they said you still owe it after updating the cancelation date. You might not be aware of policy fees and occasionally even cancellation fees.

5

Sorry for that. looks like an oversight on their part. I would advise against paying since it looks like insurance fraud. AAA cannot insure you in a different state, the law does not allow that. Maybe you should address a complaint to NAIC