The insurance industry was handed a resounding defeat as the Georgia Court of Appeals allowed a class action to proceed against Chicago-based Resource Life Insurance Co. The potential class includes hundreds of thousands of customers who purchased credit insurance when financing vehicles but who, either because they paid off their loans early or their cars were wrecked and thus the loans canceled, were not provided premium refunds.
According to reports, the case began when Dorothy Buckner purchased her car in 2001. That same year Buckner’s car was totaled in a wreck, canceling out the balance of her loan. The premium for Buckner’s credit insurance policy, and similar policies sold to hundreds of thousands of other customers, includes a one-time up-front payment that covers the term of the loan. If the loan is canceled for whatever reason the customer is due a return of the prorated balance on the premium. When Buckner failed to receive her full prorated refund she sued.
The suit alleged that Resource Life was able to determine which of its policyholders was entitled to a refund but just didn’t, and that failure constituted a breach of contract, among other things. The suit seeks compensation for any Resource Life policyholder whose loans were terminated early, and an injunction ordering the company to provide refunds to those whose loans would be cancelled early in the future. Resource Life has denied the allegations and argued that it is up to the policyholders to notify Resource Life of any early cancellations in order to receive a premium refund.
The Minnesota auto accident attorneys at Lord & Faris understand that if you’ve just lost your car in an accident the last thing you need to be dealing with is haggling with an insurance company for a rightful refund. The judge in this case made the right decision and we hope those insureds get the refunds they are legally entitled to.