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Complaint 2 of 2 in "Company Cancelling / Non-Renewing"

Insurance Carrier: Erie Insurance Company
State: Virginia

Consumer Complaint:

I feel my civil rights are being violated.

I have been with Erie Insurance Co. for 26 years, because I live with someone that is of a different racial background than myself and his driver's license was suspended. I was told by my agent, after she spoke with one of the underwriters, that the only way my auto policy would be renewed in June 2009 was if the person that was living with me moved out and I provided proof. She also told me that because he was of driving age and he was living in my house they were going to send me a bill for $30 to cover Jan-June, 2009.

She stated Erie was a very selective insurance company and they didn't insure just anyone. Is Erie practicing within the law here? I can't be the only person they are discriminating against. They can't tell me who I can and can't associate with can they?

Insurance Expert Answer:

An insurance company has the right to select who it covers, subject to a whole bunch of laws and rules including laws that provide that it cannot illegally discriminate on the basis of race, color, creed, veterans status, sex, etc.

When your insurance company agreed to insure you it did not agree to do so forever, until death did you part.

You could cancel at any time. Similarly, your insurance company also is not required to renew, especially if your risk profile changes.

Having a driver with a bad driving record in the household, or a suspended license, changes your risk profile. Refusing coverage to a person with a suspended license makes sense from an insurer's point of view. Refusing coverage to that person's partner is a bit less clear cut.

Companies know that sometimes folks with suspended licenses drive anyway, and let's just say "borrowing" a partner's car is not uncommon. While a company normally places an exclusion clause on the policy in such circumstances -- which says it will not cover damages resulting from the bad driver's accidents -- that does not always protect it from liability claims to 3rd parties as most states want the insured car covered at all times when driven with permission of the owner.

In short I think it may be time to find another carrier. (I would also like to think that no carrier would discriminate on the basis of race, as it really doesn't care what race you or the partner is; it insured you and no one's race has changed since then. So while I think you're barking up the wrong tree, it has happened.)  I am not familiar with VA law but also ask the Virginia Insurance Department.