Car Insurance Investigation
John and Brenda Marquez of Excello bought disability insurance when they bought a new truck in 1999. Their struggle trying to get their money back on a policy that never went through shows what can happen with third-party insurance companies.
Trying to get credit disability insurance was a bumpy road for the Marquezs. They bought their truck with a loan from WFS Financial and added $2,000 to their loan for credit disability insurance from St. Louis-based Lyndon Insurance Group. The insurance would make payments for them for the whole six-year loan if John couldn't work because of a disability.
"But one afternoon, I found out that the insurance cancelled and everything else, and we were trying to get them to take the $2,037 off. They said they couldn't do it because that loan went through," recalled Brenda. "So I called WFS, and I did this for two or three months. Finally, WFS said, 'Okay, we'll just take it off at the end of the loan. We can't redo the loan and take it off now.'"
Now the Marquezs are at the end of that loan and they want to see the $2,000 applied to what they owe. WFS said it can't, although John and Brenda said the company promised them six years ago it would do that.
"And then they kept hounding me for the money," said Brenda. "And I made up my mind I wasn't going to make any more payments to pay the darn insurance off because, you know, that was what was left, you know, on the loan."
KOMU News went to the Missouri Department of Insurance to see if the Marquezs had any right to get the money back.
"At this point in our examination of this, we're still trying to determine as far as where the money went, where the premium was refunded and, if there was a refund of premium, who would it have gone to," said the department's Matt Barton.
The Marquezs learned the hard way what can happen when buying extra insurance with a new car purchase, no matter how much documentation you have. And, insurance regulators said, it can happen to anyone when companies change hands.
"It certainly can frustrate a customer," admitted Barton. "And we will probably see an increase in complaints that are filed with us because customers get frustrated, because they're trying to track down their claim."
Car dealers said third-party companies making sales attached to your main purchase need extra attention.
"Sometimes it takes another phone call," explained Dave Drane, owner of University Chrysler. "You know, you need to call. In this case, there were a lot of questions I would have had with the insurance company. You know, why they're not riding this, or to make sure the bank was reimbursed for that policy amount."
Barton said, "I would invite the consumer to request a copy of that insurance application to make sure that they've read everything that goes on that application."
The Division of Consumer Affairs is still investigating the Marquez case. Experts said consumers should check all pieces of paper before they sign them to make sure everything is correct. Then, get copies of all documents, including information on whom to contact if there is a problem with the loan or insurance.
There have been 166 complaints against Missouri's credit insurance industry in the past five years.