Hi everyone, I’m hoping to get some advice because this situation feels insane.
On April 23, I was quoted $2,280 for a one-year auto insurance policy (paid in full). The agent told me documents would take a few days since I’m in Hawaii, but that I’d still be covered in the meantime. She also mentioned that if I didn’t bundle with home insurance, the price might go up by about $100–$200 annually, but nothing drastic.
I agreed to the policy based on that quote, and my credit card shows I was charged about $2,200 on April 25.
Fast forward to today (May 6), I find out my annual premium is somehow $22,000. Yes, twenty-two THOUSAND. More than the cost of my car.
I immediately called and canceled. Now they’re telling me:
- They never received my $2,200 payment (even though it shows on my bank statement)
- I still owe ~$700 for coverage from April 23 to May 6
- The massive increase is because I allegedly “withheld info” on a 2024 speeding ticket (I don’t believe I did, and I have no reason to hide that.)
They also said nothing can be changed and that I owe the $700 regardless as the policy was in effect during that less than 2 week period.
So with the limited things I could do, here’s what I’ve done so far:
- Filed a dispute with my bank for the inital $2,200 charge, since they said they never got it anyway.
- Put a stop on any future charges they try to run
- Got insurance with a different company IMMEDIATELY and they issued me insurance cards right away, no delays or questions asked.
My questions now are:
- Can they legally increase a policy from $2.2K to $22K without notifying me or getting my consent? I would have NEVER agreed to that price.
- Can they charge me $700 when I never agreed to that price and never even received policy documents? They are insisting they sent it but I checked my junk box.
- What should my next move be? Insurance commissioner? Lawyer? Is it even worth it or should I just cough up the $700?
This feels completely wrong, but I want to make sure I’m approaching it right. It feels like a total bait-and-switch. Any insight would help.
Auto insurance jumped from $2.2K to $22K in Hawaii. Now they want $700 after cancellation. Is this even legal?
byu/Accurate_Age_2848 inInsurance
Posted by Accurate_Age_2848
9 Comments
Ask to see the contract you signed and see what it says. If there isn’t a contract tell them sorry and let the chargeback go through.
1) yes they can legally change your policy if there has been material misrepresentation. Your documents will say this somewhere.
2) yes they provided coverage from April 23-May 6 so you owe for that coverage. If you can provide proof you had other coverage for those dates they may backdate a cancellation.
3) pay the $$ and move on.
No it didn’t
Not a lawyer,
Most states have a legal notification requirement for rate hikes, Hawaii legally requires insurers to notify you 30 days in advance of any proposed rate hike greater than 10%. If I were you I’d pursue a chargeback with my credit card/ bank, AND contact the state insurance licensing agency.
https://cca.hawaii.gov/ins/resources/
Did you contact the agent why the huge discrepancy?
Are you sure you’re dealing with a legitimate insurance company and not a scam?
What insurance carrier are you dealing with ?
How is your driving record? Did you know you had a ticket and that they had not found it?
Short answer: yes this is legal and standard.
Long answer: it depends.
If the company finds that you materially misrepresented a fact (meaning purposefully) they can absolutely increase your premium after coverage has begun. Typically companies will send you a letter or email about it prior to doing it, usually to give you a chance to dispute their finding or give supporting documentation. How a speeding ticket could’ve possibly raised your rate 10x, even if materially misrepresented, is rather insane and I’ve not seen an increase of that much for something so small. Also it is very normal that people can’t remember their accidents and tickets, especially if there are multiple within the 3-5 year window. Typically these errors are caught before payment when the agent checks CLUE and MVR so it is surprising that didn’t occur.
Did the agent ask about ticket/accident history? If they didn’t ask then you didn’t lie.
As for the 700, the insurance was provided to you for an amount of time and therefore you do owe for that coverage prorated to the day. But why didn’t they receive your card payment? It might be best to not cancel that credit transaction, at least not yet, and instead force them to reconcile on their end, you should only need to show proof from your bank that your card was charged for the insurance. My other thought on this is that some insurance companies have an esrly cancelation fee, typically a percentage of the entire policy premium. 22000-2200 = 19800. 4% of 19800 = 792. That’s all rough math but you can see where I’m going with it, it’s possible they received the 2200 but that you now owe 700 because of early cancelation.
It also concerns me that you did not receive policy documents. That means you couldn’t have signed. I might call them to ask for your signed insurance documents from when you began the policy, if they have them with an eSign and you’re absolutely sure that you didn’t sign through your email it’s possible the agent signed for you so ask to see the audit trail with the document. If it turns out the agent signed for you without your consent (some companies allow signature on the agents computer immediately after the sale) then that would be very bad for them.
I’d contact the department of insurance for this. A lawyer may be a good idea too but definitely the Hawaii doi.