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OK, so I have a client whom has a commercial fleet of vehicles and had a DMV filing done with their incumbent Auto Carrier. My agency quoted and won their account saving the client close to $20,000. But when he tried to cancel his existing policy, the incumbent is playing hardball and basically extorting him for an additional 6 weeks of premium stating that they were not given a proper 30 day cancellation notice that the DMV filing requires, and weren't notified of the cancellation until 2 weeks after our new carrier wrote the policy and made the new DMV filing. DMV now recognizes our filing as of the date we wrote the policy and we have provided copies of the Dec pages, and filing to the incumbent carrier.
However, the incumbent carrier is still withholding an additional $8,000+ of return premium because of the DMV filing. I have contacted both the DMV and the CDOI and it seems the insured is SOL.
Has anyone else EVER experienced a carrier pulling this or is this carrier just being a particular pain in the neck?
Comments welcome please!
Shagster

Never had this happen, but can you get your carrier to adjust the effective dates to a future date to coincide with the incumbent cancellation date? This may go a long way with your new client.

Our new carrier has agreed to rewrite to a later effective date so that was good news for the insured. Oh, and one other item I forgot to mention was that the incumbent sent us a Hold Harmless agreement for our carrier to sign which would hold them harmless from inception of our policy date through the end of the term of the incumbents filing. It is just bizarre that they're doing this. I've never seen a carrier be such jerks about the filing before!

As an Underwriter / Broker who specializes in Commercial Auto this is not at all unusual in fact all the different markets / Companies I work with handle it this way (cancel date coincides with the date the filings cancel). Agents who write much Commercial Auto understand this and would not have issued a policy with an effective date prior to the filings cancel date. This is a mistake on the agent's part for not handling properly and putting a policy in place prior to the incumbent carrier's filing cancel date. Fortunately, I don't see this happen very often and when it does we obtain a Hold Harmless to try and get the incumbent carrier to cancel prior to the filings cancel.

Most DMV's do not require advanced filings for cancellation. The length of time varies from "immediately" about 20 after the cancellation effective date to notify the DMV coverage has terminated. Advanced filings for cancellation would only be in the case of FOR HIRE registrations or intra/interstate specialty filings. Unless that is the case, think you have a sore loser on your hands.