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Car Loan Insurance

San Antonio, TX: (Oct-25-07) Texas Attorney General Greg Abbott brought charges against Service Life and Casualty Insurance Co. and Old United Life Insurance Cos., two auto credit insurance companies, alleging that they did not provide required refunds to policyholders who had paid off their car loans in advance. These policies were sold to cover vehicle payments in the event the borrower died or became disabled.

As part of a settlement reached, Service Life and Casualty Insurance stated that it will pay $14.4 million to more than 46,000 Texas vehicle owners who bought credit insurance from the company in Austin. Additionally, another 6,500 vehicle owners will receive $1.3 million in refunds from Old United Life Insurance in Mission, KS. Sources stated that the refunds apply to vehicle owners whose loans terminated between 2002 and 2006. Abbott's office claimed that under state law, Service Life and Old United were obligated to refund unearned portions of the insurance premiums to those customers who paid off their loans ahead of schedule. However, the state claimed the companies never refunded the unearned portion. [SAN ANTONIO BUSINESS JOURNAL: CAR LOAN INSURANCE]


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Published on Oct-27-07


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