Beware of undisclosed and probably illegal cancellation charges by GMAC Auto Insurance

(AND also dramatically higher premiums than competitors!)

I had my auto insurance with GMAC insurance for several years.

The premiums at GMAC insurance were about $1370 per year. I paid in full every six months, most recently about April 10, 2008. About April 22, I bought a motorcycle and called GMAC. GMAC's premium to insure the motorcycle was about $380, which seemed high. So I called GEICO, which quoted me about $90 for similar coverage.

Of course, I bought the insurance through GEICO, and then inquired with GEICO about moving the car insurance, and they offered a premium of nearly $400 lower than GMAC for similar coverage. I paid the premium to GEICO and contacted GMAC to cancel.

At this point, the representative at GMAC informed me that GMAC would charge a cancellation fee, and that they would not refund the entire unearned premium. I had just paid for a full six months. I have no problem paying for insurance for the period that I was covered, but GMAC will also keep premiums, even for the period in which you are not insured!

The Illinois Department of Insurance consumer hotline (312-814-2427) advised me that it is unlawful for auto insurance polices to charge a cancelation fee or 'short rate' on personal auto polices. The Dept of Insurance spokesman strongly encouraged me to submit a written complaint to the Department and is mailing me the complaint form.

I notified GMAC representatiave Claudia Nighswonger (Claudia.Nighswonger@gmacinsurance.com)
of what the Illinois Dept. of Insurance advised, but I have had no response.

Charlie
morris, Illinois
U.S.A.