Legal Question in Insurance Law in Texas

Failure to Notify Issuing of Insurance Policy

In late November a friend purchased a car and was financed through a Credit Union. He failed to submit proof of insurance. He received a phone call on April 29 from the Credit Union. They told him they issued him car insurance since he had not submitted any himself, and that he had until the next day, the 30th to give them $230 (approximate), the cost of the given insurance, since it was, as they said, 30 days late. However, he was NEVER given any notice, neither by phone, nor letter prior to the conversation on the 29th telling him that they would issue him insurance if he did not submit his own. On the 30th he got his own insurance and went to the Credit Union to submit his new insurance and pay the $230. Upon arrival they informed him that although he just submitted proof of insurance he then must pay a total of $1,700 for insurance from November to March. Is this right? My view is that he should have been notified prior AND why should he have to pay $1,700 when IF something would have happened between November and March he would not have had any insurance information, but they still are charging him anyway. I hope you can help me. Please email me if you have any questions. Thank you.


Asked on 5/01/03, 1:08 pm

1 Answer from Attorneys

Re: Failure to Notify Issuing of Insurance Policy

Your friend will have to look at his agreement with the Credit Union. Look for language regarding his duties as the debtor. They may have included a provision in the agreement regarding insurance.

There may be something missing in the facts. As I read it...

The car was purchased in late November but they did not contact him until April?

How many days did he have to submit proof of insurance to them?

Did the contact him anytime during November - April?

Did they give a reason?

Did they provide him with a copy of the policy they purchased on his behalf?

When they contacted him on April did they say he owed them $230 or $230 a month.

It sounds reasonable that they should have notified him of the costs for the policy but he really needs to look at his agreement. He may want to make a copy of all of the documents, letters, etc and have an attorney look over them.

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Answered on 5/01/03, 2:08 pm


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