What constitutes price gouging?

[riddler 0]

Another insurance scam.

I usually order car insurance online. Last time, I got a good policy at a good price. Then I bought a second car. So I went online to shop for insurance again. The online form asked me how much I am currently paying for what amount of coverage. I entered I am paying price X for coverage Y. I got six different quotes, and I selected the second lowest (the lowest was a no-name company, and the second lowest was a large, well established insurance company).

After I signed up, they insisted on a follow-up call, which I did and repeated the information. Two weeks later I got a letter in the mail saying they are raising my rates, because I wasn't getting the amount of coverage with my PRIOR carrier that I claimed I was. Apparently, I wasn't getting coverage Y with the prior carrier - I was getting less than that. It's still unknown what they think I claimed I was getting, vs. what they think I really was getting. Apparently, they aren't allowed to contact the previous carrier, so it's all guesswork.

So I'm on the phone with them, and I ask point blank - "it looks like you are charging me a certain rate, based on what you think I was paying someone else." To which they answered yes. They didn't change the coverage at all - it remains the same as what they originally gave me. But they are changing the rates because they think I was getting different coverage with my previous insurance company.

Also, they are retroactively changing the rates back two months to the beginning of the policy, so they claim that I owe them for the difference from the last two months.

So, this is what I see from my perspective. I entered into a contract at a certain agreed rate for a service. The provider of that service later reviewed what I was paying a different company prior to our agreement, and without changing any other part of the service, raised my rate, after the fact, based on the fact that I was paying more to their competitor. And they are back-charging me for the difference.

This has GOT to be illegal. Any US law-types want to comment? It doesn't fit the standard definition of price-gouging, but I don't know what to even call it. Bait-and-switch?

Trapped on the surface of a sphere. XKCD

[BillyVance 34]

Tell them to fuck off and get your policy with another company. Oh yeah, and if it is illegal for them to do this, report them.

Well, it's what I would do.

"Mediocre people don't like high achievers, and high achievers don't like mediocre people." - SIX TIME National Champion coach Nick Saban

[Andrewwhyte 1]

I don't know what price gouging is. I think it is a name people use when they lose.
What happened to you might be breach of contract. If they are not allowed to contact the previous company then they have no basis for changing the contract. Call corporate affairs and see if you have recourse. At the very least write them a registered letter telling them you don't owe them any money retroactively and if they fuck up your credit rating you will sue them.

[riddler 0]

I was poking around online. Apparently, the same insurance company just settled out of court to avoid penalties because they were involved with bid-rigging.

http://www.consumeraffairs.com/news04/2007/12/travelers_settle.html

I've never even heard of bid-rigging before. This company must have a think-tank that spends all day inventing new ways to scam people.

Trapped on the surface of a sphere. XKCD

[packerboy 3]

Wow.... I would fucking LOOOOOOOSE it! I'm a bad customer to piss off though. I'm really good at staying calm untill just the right point when I start to notice that they are getting a little frazzled. Then I explode. I'm good at getting free shit.

I'm also a very good tipper.

But seriously.. that is preposterous! (I just read that word used in another thread )

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In matters of style, swim with the current; in matters of principle, stand like a rock. ~ Thomas Jefferson

[ryoder 1,590]

Insurance is a legal contract:
- Party A gives up money to party B.
- Party B agrees to reimburse losses of party A.

In order to renege on the original contract, I think they would need to be able to prove you were in violation of a clause in the contract which references falsifying your information. I would talk to an attorney.

If you don't mind doing a whole lot of digging, you might also be able to find CO insurance regs online. Maybe start here:

http://www.michie.com/colorado/lpext.dll?f=templates&fn=main-h.htm&cp=

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[Programmer 0]

"This company must have a think-tank that spends all day thinking of ways to scam people". You're very close to the truth. Are you psychic? I wouldn't go with that company. You might have a claim. How hard do you think it would be to get them to pay you. The best you can do at this point is go get some other insurance, then tell them to just cancel your policy. I don't think that will affect your credit rating, but you'll be better off in any case.

[davelepka 4]

Quote

I got a letter in the mail saying they are raising my rates, because I wasn't getting the amount of coverage with my PRIOR carrier that I claimed I was. Apparently, I wasn't getting coverage Y with the prior carrier - I was getting less than that. It's still unknown what they think I claimed I was getting, vs. what they think I really was getting. Apparently, they aren't allowed to contact the previous carrier, so it's all guesswork.

You probably agreed to this when you bought the policy. Read the fine print, it's in there somewhere.

It's fucked up and unfair, but it's in there.

[billeisele 130]

that particular company recently dropped my coverage due to too many claims

i had 5 cars insured with no real claims, there were 4 claims in 1.5 years for broken windshields where a truck through a rock or a tree branch broke during a wind storm - as if I had any control over these

they had the nerve to automatically re-up my home policy, that was an interesting conversation

Give one city to the thugs so they can all live together. I vote for Chicago where they have strict gun laws.