I was charged 1400.00, for insurance on my car covering a time that was already history. For only for 3 months, and this insurance doesn't cover property and bodily damage .I am widowed. I’m not in good health but I do the right thing. I moved to KY with my sister in September. At the same time, my debit card from another bank expired and my car insurance was using that expired card to auto deduct payments. I didn't know this had occurred because I moved to Kentucky the same month. When I tried to rectify it, they told me I could no longer receive coverage from them because I moved to KY. I was much more concerned about getting my medical information transferred. Diabetes can be life or death without insulin. I honestly didn't understand the ramifications. At the beginning of October, I found out the insurance was astronomical because it had lapsed on my car. Wonderful! People who can barely afford insurance get the penalty of paying more if they can’t afford it in the first place. I live on a fixed income. It took me by surprise and I was unprepared for the high prices. I also did not realize that not only would I have to pay an arm and leg for insurance when I got it – but that 1st MidAmerica, had every intention of charging me for the months I did not have coverage. Originally they charged me 3603. I failed to memorize the fine print of my car loan contract.
I had an inspection done when I got my insurance renewed. It’s documented. MidAmerica refunded 3 months. How generous. There is no law that says a car owner must go back and backdate insurance for a car that has not been insured. The law only states that the cars must be insured. If the car is not insured, a fine is assessed to the owner – and while part of paying the fine is also getting insurance, there is NO REQUIREMENT to backdate the insurance to cover the uninsured period.
MidAmerica supercharged me for a period of history and there is no law stating that they must do so.
I looked up the definition of usury. While this is not the exact same situation where there is an illegal action or practice of lending money at unreasonably high rates of interest, what did happen here was that MidAmerica used an unreasonable high rate of insurance to add to my already high rate interest loan. I know moral and ethics is on my side. I checked for precedence on this. Mortgage lenders did the same thing to owners in the past. When the owners failed to produce insurance, the banks charged such a heinous amount – that it wound up in court and the courts ruled in favor of the owners. The owners got back the overages charged to them. The courts ruled: “loan provider cannot charge more than what it necessary to insure the house.” No one is going to believe 1400.00 for 3 months of insurance is necessary. My driving record alone justifies a lower amount.
There is something unclear to me about why a credit union would purposely go and pick up the most expensive insurance to use against their members. At least until I looked at my interest rate. Then it all became very clear. I really don’t understand amortization, and interest compounded daily. What I do know is that 10+% is rather high for an auto loan. Add the overcharged insurance rate…I recognize that my ignorance about insurance on my car is no excuse for the period I went without insurance, nor is not having the money. I am a member who has paid 2 years on time, and any credit problems on file are due to a death in the family not irresponsible spending and credit cards.
If they are going to charge 1400.00 for every 3 months of insurance coverage, I think that kind of money should be clearly stated IN ADVANCE – no surprise parties.