Texas Sues Auto Insurance Companies

When a person purchases a credit insurance policy on a new auto loan, they are saying that if something happens to them their car will be paid off. The policies guarantee you that if you die or become disabled, that you won’t have to worry about coming up with the money for your car loan payments. It is supposed to give you peace of mind.

However, if the auto loan is paid off early, the car insurance companies are supposed to pay back all premiums that were not earned. What that means is that if you purchase the car insurance for the length of the car loan and you pay said car loan off early, you are owed the premium back that you paid for the months that you ended up not needing it.

But four insurance companies in the state of Texas didn’t pay back the unearned premiums, they kept them. American Heritage Life Insurance Co., Old United Life Insurance Co., Protective Life Insurance Co., and Resource Life Insurance Co. all kept the unearned premiums and now they are in big trouble.

State law requires that all unearned premiums be refunded, so the Texas Attorney General has filed a law suit against the four companies for not giving back the car loan insurance premiums. On average, Texas customers that purchased the auto loan insurance will get back $222 plus interest in refunds.
 

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