Often times when a person goes into an office to purchase an insurance policy, they do so with the best of intentions. They keep the policy for years, make their payments on time and never file a claim. Very few policies cancel immediately, and if a consumer is asking for this there are a few things to be aware of.
Most companies have agreements regarding early cancellation mandatory to purchasing a policy. These agreements are often times signed by both parties and are required to work with the agent or broker. These signatures are legally binding, so be sure to read them and inquire with any questions that may arise.
Once a client has purchased a policy and the final signature on the application is signed they are insured. This means if a client walks outside and gets in a wreck as soon as they leave, they will be covered. This also means the client can go down to DMV and turn in their insurance cards for your registration. Because of this, it is very rare that a FULL refund will be given on a down payment.
When working with a broker, a client may have been charged a broker fee. It is also rare to obtain a refund on broker fee once the policy has been issued. The client has entered into an agreement with that broker, and the broker should still receive compensation for their work regardless of how long the client keeps the policy. The broker fee is issued by the agent as a charge to the client for access to special insurance companies or programs, usually resulting in much lower insurance premiums. The fee covers the broker’s work done on a policy that is written with an insurance company outside of the agent’s company.
I have found that many insurance companies will tout their financial credibility through the rating companies scoring. You will see AM Best ratings, Moody's ratings, or Standard and Poor's ratings throughout company paraphernalia. The common ingredient seems to be that you cannot compare the two. One company may tout their AM Best rating, while another company you are looking at touts their Moody rating. I believe this is intentional because the rating companies will use different criteria in their scoring, and it is an obvious decision to use the 'best' insurance rating score to promote each insurance company to insurance...
Often times a dishonest consumer will go to an insurance broker to purchase a policy and get the insurance cards, and then go to DMV to get registration done and then immediately cancel the policy. Frequently obtaining insurance cards without issuing payment is illegal. This is insurance fraud and can send a person in serious trouble. Every once in a while a consumer will cancel a check or credit card payment for a broker fee and down payment on an insurance policy, as means of canceling payment but obtaining insurance cards for a policy they do not actually have. This is check fraud, and if they are using the insurance cards purchased it becomes insurance fraud as well.
