Insurance customers buy insurance from agents to obtain the best coverage at the best price. A recent article in the July 2023 Rough Notes, The Fine Art of Contract Analysis, shockingly noted the current plague of policies being written incorrectly.
The first rule regarding insurance agent negligence in California is to hire experienced insurance agent professionals who are experts in the business, duties, and responsibilities of how insurance agents and brokers are supposed to conduct their business. This post is a promised follow-up to a recent post, The Nuts and Bolts of California Property Insurance.In addition to the materials Dan Veroff and Victor Jacobellis presented in their seminar, I want to share an example to prove my point about the need to hire an insurance agent expert to determine if a case is worthy.…
Insurance agent negligence cases typically come to me with the following question: “Chip, I think the agent messed up. What do you think about bringing an action against the insurance agent for errors and omission?” My first two thoughts on this question are:
1. Do you know how complex agent negligence cases are?
2. In what state did this happen?…
“Doctor, thanks for seeing me; this is what you should do to properly treat and cure me.” Can you imagine this scenario? Can you imagine paying a doctor and the doctor expecting that you will order what is needed for you to be cured? Of course not.
Continue Reading The Insurance Industry Knows That Most Policyholders Are Not Properly Insured
Policyholders do not study all the forms available for coverage, nor do they typically understand how policies can be tailored to provide better coverage through endorsements. In a recent blog about soft costs under a builders risk policy, Builders Risk Insurance and Soft Costs Claims, I noted the importance of selecting an experienced insurance agent that knows the builders risk area with great expertise:…
Continue Reading Pick A Great Insurance Agent When Deciding Upon Builders Risk Coverage
Like many states, California law makes it difficult to sue for being “underinsured.” The law places the primary responsibility for securing enough coverage and the right kinds on the insured. An insurance company, agent or broker has no duty at law to recommend any particular coverages or limits. However, they are liable if they fail to procure the agreed upon coverage, make a misrepresentation about how the coverage works, or fail to fulfill some other “special duty” they voluntarily undertook.
Continue Reading California Court Rejects Another Half-Baked Underinsurance Case
It is a myth that big-name insurance companies are leaving the California homeowners market due to wildfires. They have not, but they are selling their usual homeowners policies with a twist – exclusions for fire losses. Carriers can and will do this so long as the customer also gets a fire policy from the California Fair Plan – a quasi-public insurer of last resort that provides fire coverage if no one else will. Such a sale does not violate the California minimum-standards for fire insurance policies and allows carriers to stay in the game and collect premiums.
Continue Reading Negligence by Captive Agents Is on the Rise Because They Don’t Understand the California Fair Plan But Are Now Brokering Them By the Truckload
Everyone who has been to law school learns about Negligence and the reasonable person standard. This standard is “what a reasonable person would have done in the same or similar circumstances.” However, an insurance agent will be held to a similarly situated insurance agent in the same circumstances.
Continue Reading The Standard of Care Owed by Insurance Agents in the District Of Columbia
In order to succeed on a claim of negligence against an broker/agent for failing to procure insurance, a plaintiff must establish (1) a duty of care; (2) a breach of said duty of care; (3) injury caused by the breach; and (4) actual loss or damage resulting from the injury. Recently the Supreme Court of Wisconsin, in Emer’s Camper Corral, LLC v. Alderman, 391 Wis.2d 674 (2020), addressed the evidence a plaintiff must present under the third factor in order to establish causation.
Continue Reading Insurance Being “Commercially Available” is Not Enough in a Broker/Agent Negligence Action
Last month, I discussed the difference between insurance agents and insurance brokers, and how the actions of insurance agents, (and during limited circumstances, those of insurance brokers), can bind an insurance carrier. Here, I will discuss two different causes of action that may be brought against an insurance broker or an insurance agent: breach of fiduciary duty and negligence.
Continue Reading Breach of a Fiduciary Duty and Negligence by an Insurance Agent or Broker: What is the Difference?