Plaintiffs in agent negligence cases usually seek to recover what they would have received from the insurer had the proper insurance been procured. However, damages in agent negligence cases aren’t always limited to just that.

In Topmiller v. Cai,, 99 N.M 311 (Ct. App.1983), Mr. Topmiller asked his insurance agent for builder’s risk insurance on the house he was about to build. After making assurances, the agent failed to procure the proper policy. The house was destroyed by fire just shy of completion, and Mr. Topmiller sued his agent for negligence. While the duty and breach were clear, there was an issue about damages.

In order to re-construct the house, Mr. Topmiller had to obtain additional interim financing which cost him an extra $5,500. In an effort to avoid paying that additional amount, the agent argued that his liability was that which would have fallen upon the insurance company, had the insurance been effected.

The theory of damages, however, is to make an injured person whole. The court used that theory in reaching the following conclusion:

Normally, causation requirements will limit any recovery to that which the plaintiff would have received through the insurer if coverage had been provided. However, if the plaintiff is able to prove that additional consequential damages resulted from the agent’s failure to obtain coverage, he will then be entitled to recover those consequential damages as well.

It is important to note that additional costs may be recoverable under this principle. Keep in mind, though, that this case applied New Mexico law and the law in other states may vary.