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The importance of checking your work

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Technology has advanced considerably in terms of payment options. All it takes to complete various transactions is now a swipe, scan or click. However, many of us are still reaching for our checkbooks because everyone from landlords to daycare providers are reluctant to abandon this old-fashioned payment method.

As we get further away from checking's hay day, it is crucial to review your payments to avoid costly drafting errors.

Drafting errors on checks are seldom problematic because most vendors will simply alert the consumer and a resolution will be reached. For example, a painter might agree to tear up an incorrect check after receiving a new one.

Interestingly enough, experts indicate there is one group that is rather unforgiving about drafting errors: insurers.

Consider the experience of an 87-year-old Massachusetts woman who wrote a $3,399.91 check for her long-term care policy premium. She mistakenly wrote "three thousand three hundred and 99/100" dollars on the amount line, leaving her payment $98.92 short.

Her insurer sent just two notices notifying her of the deficiency after years of timely payments. She failed to respond, owing largely to an oversight by her late husband, and the policy was cancelled.

The insurer held its ground and refused to reinstate the policy. Her insurance company even went so far as to refuse an offer from the state's attorney general to voluntarily mediate the dispute. Sadly, the woman later developed dementia and was no longer unable to rely on her long-term care coverage.

The question arises as to whether the way the policyholder was treated is legal. The short answer is the law holds words prevail over numbers when checks contain conflicting terms. The logic is the writing of words is somehow more deliberative than the writing of numbers.

The valuable take-away is that the individuals who pay their long-term care policies by check must be cautious. Double-check anything you've written or potentially sign up for automatic online payments are two good suggestions to prevent faulty information. Another good idea is to ensure a safety net for loved ones to also receive mailed copies of important documents.

Insurers have taken major losses on long-term care policies. Companies are more than willing to do whatever it takes to get themselves off their potential liabilities.

Source: The Boston Globe, "When a small error on a check costs you everything," Sean Murphy, July 10, 2017

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