by bdionisopoulos » Sat Oct 16, 2010 08:56 pm
I bought motorcycle insurance in Quebec Canada for the amount of $380.00 but my check bounced. I Soon after sold my motorcycle and assumed that the policy was void since my check had bounced. The insurance company is now asking tha I pay the full amount of $380.00 even though the amont was for a 12 month coverage period. The total amount of time that elapsed between getting the insurance and my check bouncing was less than 1 month. Am I liable for the full amount?
Posted: Sat Oct 16, 2010 10:21 pm Post Subject:
I can't speak for Canadian law but if this was the first payment then the fact that it did not go through probably makes it an invalid contract. There needs to be compensation to have a valid contract. Have you ever called the carrier to discuss the matter? I'd certainly start there.
Posted: Sun Oct 17, 2010 02:23 am Post Subject:
There needs to be compensation to have a valid contract.
Although tcope uses the word "compensation" instead of "consideration", his point is correct. Without VALID consideration from you as the insured, there can be no contract. You can bet that if you'd had an accident they would have said, "Insurance? No, your check did not clear the bank. You had no insurance."
Canadian law may be different on this point compared to US law, but I doubt it. Even though your check did not clear the bank, however, they could argue that you did have insurance between the time they accepted your check (through their agent) and the time it was declined by the bank, and that you owe them "earned premium" for each of those few days of coverage. Many US insurers have adopted this attitude when it comes to cancellation for nonpayment of premium, charging folks for every day of coverage from the premium due date to the date of lapse.
Posted: Tue Oct 19, 2010 06:59 am Post Subject:
charging folks for every day of coverage from the premium due date to the date of lapse.
It was certainly a great explanation to help us!
I'm just wondering if there are any clauses (within our policy papers) that mention such charges. I'd also like to know how such charges are calculated.
Posted: Mon Nov 08, 2010 10:38 am Post Subject: Thank you
Thank you all for shedding some light on this for me. I do recall the basics regarding contractual law from my years in university however your feedback has been very helpful. tcope, I am assuming that the carrier would be the insurance broker if that is the case then yes I did contact them but they insisted that I am liable for the full amount, just doesn't sound right to me...thanks again all!
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