Class action suit filed against Madison County insurance company

Nov. 20--EDWARDSVILLE -- An Effingham lawyer has filed a class action suit against Sentry Insurance Co., claiming the firm went back on a promise to repay half of the premiums of its customers who went five years without making an accident claim.

"As plaintiffs and many other insureds began qualifying for refunds of the first year's premiums by staying claim-free for five years or more, Sentry unilaterally non-renewed the policies and failed to pay the safe drivers the additional Payback premium," the suit claims.

The program was called the "Payback Program" and "Payback Agreement." The suit claims the company broke its contracts in violation of Illinois consumer protection laws. Under the agreement, if the insured did not file a claim during the first five years, he or she would be repaid half the first year's premium he or she paid.

The Payback Agreement was added to the policy at a premium above what an insured would normally pay.

A spokesman for Sentry could not be reached Wednesday. The proposed class is represented by Christopher A. Koester of Taylor Law Offices in Effingham. The named plaintiffs are William A. Coleman and Mary A. Coleman of Madison County. The suit must be certified as a class action before it can proceed.

The class would be all citizens of Illinois who had a policy with sentry with a "Payback Agreement" and were not renewed and who had no claims or losses under the policy.

The suit also claims that Sentry continued to sell and renew Payback Program policies, event after it had already decided it would soon decline to renew the program and that it was selling and renewing Payback policies on which Sentry would never pay, the suit alleges.

As of 2003, Sentry had paid back more than $78 million in refunds to insured motorists throughout the country. The company allegedly made a decision in 2012 to cease writing and to not renew its standard personal line policies, including its personal auto insurance and Payback policies in 2014, the suit claims.

However the company allegedly failed to inform its customers that it would not be renewing Payback policies in 2014.

The suit alleges customers were owed $500 or $650 each year between 2013 and 2018. It claims the company continued to sell and renew its Payback policies, even through it knew that the benefits advertised for in the policies would actually never be available because of the company decision in 2012 not to renew all policies in 2014 and not pay all Payback premium refunds.

The suit alleges that between 2010 and 2014, Sentry made a specific promises to its customers that it would continue to receive payback checks.

Reach reporter Sanford Schmidt at 618-208-6449.

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