Vince Carlson has a problem. He asked his insurance agent for a quote for his properties: a farm in Zillah and two homes. But the agent went ahead and ordered an agri-business policy.
“It was like $6,000 a year. I'm a farmer. I don't make that kind of money. There's no way, so I told her there's no way I can do this,” explained Carlson.
This may very well have been a misunderstanding, but the consequences for the Carlsons were staggering. The insurance company invoiced their mortgage company and the payments depleted their escrow account.
“I got a notice in the mail saying my $900 a month mortgage payment is now $2,500 a month and I'm four months late,” said Carlson.
During this period, Carlson's mortgage was sold to another lender. He said he received no invoices from the insurance company or his lender about falling behind. Washington Insurance Commissioner Mike Kreidler says you have to be careful getting any policy and understand the difference between a bid and a bind.
“A bid is the price I’ve come up with. I might get several bids from different companies, but when you agree to bind, that means you've agreed to buy the policy,” said Kreidler.
And if wires get crossed, there is a way to unwind them.
“If there is a dispute, you always have an opportunity to cancel a policy afterwards. You also have the opportunity to come to the Insurance Commissioner’s office. If you have a dispute with your agent and broker, you can register a complaint and we'll do an investigation on the action that took place,” said Kreidler.
Carlson did the right things. He filed a case with Kreidler's office, and since the insurance funds put his mortgage in arrears, he filed a case with the Department of Financial Institutions. The insurance case is still under investigation. Meanwhile, Carlson’s credit has taken a nose dive.
Bottom line: After any conversation about bidding for insurance, always check to make sure there was not a misunderstanding or worse, because the person paying the price will be you.