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Insurance company drops woman after USPS delays payment

Posted at 4:50 PM, Feb 09, 2021
and last updated 2021-02-09 18:19:19-05

REISTERSTOWN, Md. — Mail delays have resulted in late fees and bills not being paid on time. In Kelli Johnson's case, her insurance company dropped her and she didn't know it until she really needed it.

"They pretty much have to gut it out and I will be displaced for the next 4-6 months," said Johnson.

After a January fire destroyed her Reisterstown condo, Johnson immediately called her insurance company to file a claim, only to find out that her policy had been canceled, because of a communication issue collecting payments and delays the postal service experienced around election time.

"They just kept saying, 'Well we were supposed to receive it by November 4 and we didn’t get it until November 17," said Johnson.

It started at the beginning of this year. She switched policies and listed her mortgage lender as the contact to collect payment from.

"What happened was they were reaching out to my mortgage lender for that payment but my mortgage lender is not set up to pay it that way so I’m thinking it paid through my mortgage lender and it wasn’t," said Johnson.

She thought it was all taken care of until she got a letter in the mail in September that he April balance was due by November 4. She used her credit union's bill pay, sending the check October 26 with an expected delivery of October 30. But it didn't arrive until the 17, and her policy had already been canceled. Her check was never refunded so she had no idea until she tried to file a claim.

"I knew without a doubt that I paid that bill on time. It’s just that because of the circumstances of the mail service and the pandemic, it got tied and I felt like I shouldn’t be penalized for something I couldn’t control," said Johnson.

Johnson explained what happened. They didn't budge, so she turned to the Maryland Insurance Administration.

"If you have a problem, anyone who has insurance in the state of Maryland is having difficulty, they've reached an impasse with their insurance company, we are here to help you through that process," said Kathleen Birrane, the Maryland Insurance Commissioner.

Birrane said what really helped Johnson's case was that she could show proof of payment, and she recommends during these uncertain times, people make sure they are leaving a paper trail.

"An ounce of prevention is worth a pound of cure. Anything that the consumer can do to create that paper record, to pay electronically, to pay through a bank or a credit union, to use a credit card to call the agency or call the company and make those payments," said Birrane.

Of the handful of complaints they’ve had on this issue, Birrane said they have been able to resolve them successfully.

"Often times with the company, it’s a misunderstanding and when you put the pieces together and say this is the timeline they will back off," said Birrane.

With their help, Johnson's insurance was been reinstated and the claim is moving forward.

"After all the headaches and stress, the ball is rolling again. It was just a three-week time frame of figuring out what to do with your stuff, trying to absorb everything that happened. Like I was asleep and now I’m in my parents house in the basement so it’s just life can change in the blink of an eye," said Johnson.

The insurance commissioner is looking into issuing new regulations that would give her the authority to extend or provide additional notice periods because of the delays.