Premium Audit Disputes vs. Collection Agencies
Most premium audit disputes may not be documented by a collection agency. I received a great question on Premium Audits this week. We are disputing our premium audit for 2009 – 2010. We are receiving letters from a collection agency and the carrier. Do we need to respond to all the letters (seven in total) from both companies while we are in a dispute?
My answer to this is an emphatic yes. I do not agree that you should have to answer to all seven letters. However, if you do not respond timely to either company, you would lose your ability to dispute the audit. I am not an expert in the creditor laws. I am not sure if the carriers in question can actually turn your file over to a collection agency during a valid premium dispute.
Most collection letters and carrier letters will give you a time frame in which to respond.. We received an email two weeks ago where a potential client had not responded to two collection letters from a collection agency. This can put an insured into a real conundrum as the carrier and collection agency will both considered your company to be in default on the dispute.
My recommendation is to respond within the time frames given in the collection letters from both the carrier and collection agency. Any letters written during a dispute and especially collection letters should be sent Certified Mail with a Return Receipt. The return receipt is legal proof you have responded timely. If I am correct, the Certified Return Receipt fee for a one ounce letter is $5.59. That is $ well spent.
Phone calls are great, but they do not preserve your credit or premium audit dispute rights. Responding by letter keeps everything upfront and documented. I do not even recommend emails in this instance.
One recommendation that is very important is to read all pages and both sides of a collection letter from the carrier or collection agency. I have seen one where the letter looked innocuous only to find the 30 days to respond or default clause on the bottom of the very last page.