Why would an auto insurance company after you have cancelled your policy and you have not had a single late payment say you owe more money and threaten to take you to collections?

Answer 1

It can be many different reasons

1. You cancelled the policy and they had a short-rate cancellation penalty. If they charged you that penalty for cancelling, then you do owe it.
2. You had made changes (endorsements) to that policy right before you cancelled it and owe premium for that change.
3. There's a bill you missed and don't realize it, although you think you paid them all.
4. There could be a carryover from a previous policy term into the renewal term.
5. They could have made a mistake.
6. etc....

The best thing to do is have their customer service or agent go over each bill and each payment made by you. I have to say that most carriers have electronic records and they are USUALLY right. You really need to go over each month together to find out what happened.

If they went to collections, then that means you went a long time without paying. They sent you bills and maybe made phone calls to you and you didn't pay or refused to pay. Who knows...but it is pretty late in the process when it gets to collections. Try to get the records from your old agent/company and back-track how it happened. Maybe your old agent could help you sort it out.

Hope this helps...