Auto-insurance customers seeking coverage over the past few days within the counties affected by floods likely found that their new policy would not be activated until Tuesday.
That’s because carriers often will restrict when new policies or adjustments to current ones can take effect, to combat insurance fraud.
“It’s a normal practice for areas that will have a semi-permanent, catastrophic event such as floods or hurricanes,” explained Jeff Sibel, spokesman for Cleveland-based Progressive Insurance. “It’s to prevent fraudulent activity.”
In Progressive’s case, coverages were restricted from Thursday through Tuesday. That means a current customer who might be impacted by the floods, for example, couldn’t reduce a deductible within that time window.
“Basically, it prevents someone who had coverage and knew their vehicle would possibly or likely suffer damage from lowering their deductible,” Sibel said. “Or from someone adding comprehensive coverage to a policy for the same reason.”
Insurance companies honor pre-existing coverage. The restriction on additions and changes was lifted Tuesday, although liability coverages were activated the whole time.
Comprehensive coverage used to cover vehicles damaged by flood.
Areas unaffected by the floods likely did not see restrictions on new orders or changes to existing policies.
David Migoya: 303-954-1506, dmigoya@denverpost.com or
