I received a renewal for my home owner's insurance. It says if I don't
renew, the insurance expires at date. If I pay after date, insurance
would resume, but there is no coverage between date until the time I pay.

In other words, if I send in payment 10 months after date, I would get 2
months of insurance for one year of premium. Obviously no one in their right
mind would do this -- most people would just start a new policy -- unless
for some reason you become uninsurable and renewal is the only solution.

Another business with a similar policy is costco membership. If your
membership expires and you don't use costco for 10 months, when you go back
to use it, you pay a one year membership for a "retroactive" renewal,
meaning you get two more months to use.

Shouldn't there be some law against this type of ripoff?

"peter" writes:

I received a renewal for my home owner's insurance. It says if I don't
renew, the insurance expires at date. If I pay after date, insurance
would resume, but there is no coverage between date until the time
I pay.

That's typical.

Think about fraud. Someone buys a year of insurance pays for it,
the 2nd year they don't pay on time but instead plan to wait 11 months
to pay it. A loss happens in month 6. Now, you're the insurance
company--would you be excited to pay out a 50k fire loss now that dead
beat 6months late customer finally paid for his insurance now tha the
had a loss?

In other words, if I send in payment 10 months after date, I would get 2
months of insurance for one year of premium. Obviously no one in their right
mind would do this -- most people would just start a new policy -- unless
for some reason you become uninsurable and renewal is the only
solution.

Correct.

Another business with a similar policy is costco membership. If your
membership expires and you don't use costco for 10 months, when you
go back to use it, you pay a one year membership for a "retroactive"
renewal, meaning you get two more months to use.

Shouldn't there be some law against this type of ripoff?

We needn't legislate common sense and it isn't a ripoff.

If you're late enough renewing your costco membership, use common
sense and purchase a new membership vs renewing the old.

And don't expect to be insured if you aren't prompt with insurance
payments. That's one bill you absolutely positively want to pay on
time.

--
Todd H.
http://www.toddh.net/