Legal Question in Insurance Law in New York

Hi there. i was offered car insurance and sent a policy in the mail after purchasing a six month policy. I spoke with a broker on the phone with AAA, sent her the information she requested, then said the insurer would send me a 6-month policy and Insurance card, which they did. 2 days later, the AAA rep called me and said the Insurance company was revoking my insurance and sending me a pro-rated refund for reason that i was a newly licensed driver and that they were unaware of that when they issued the policy. Are they allowed to give me insurance after i pay for it, send me a valid binder, and then revoke it like that?


Asked on 6/06/11, 3:25 pm

1 Answer from Attorneys
SHAHRIAR KASHANIAN LAW OFFICES OF SHAHRIAR KASHANIAN, ESQ.,

Unintentional mistake by either party to a contract may be grounds for rescission (cancellation) by either party. It appears that the party you spoke to on the phone was not diligent in demanding the correct information from you. You may fight an uphill battle to show gross negligence or gorss omission, however, your insurance will have lapsed while you want the other party to live up to their end of the bargain. This will result in bigger headaches with the NYS insurance dept. on lapsed policies.

I suggest you either try to obtain alternative insurance without any delay or demand a two week extension from the insurance company/broker before they cancel your insurance while you are seeking alternatives. You may try to approach brokers who specialize in "assigned risk" policies in the interim, while you extend your time to obtain insurance coverage that you deem preferable.

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Answered on 6/06/11, 4:31 pm


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