Monday, September 26, 2005

Denials of Insurance/Louisiana Citizens

In my early morning prowell of the net I came across this, and thought I would spread the word.

From teh forum at
Denials of Insurance/Louisiana Citizens
Posted By: raliDate: Sunday, 25 September 2005, at 3:23 p.m.
I have been reading the newspaper accounts of the logic of State Farm and All States denials of hurricane victims insurance claims with great dismay…but certainly no surprise as I was certain this was going to be their way of doing business this time as well as in previous disasters involving flooding.
I would like to suggest that there may well be a way for hurricane victims to recover damages in another way, suing those captive agents and their companies on their errors & omissions coverages for failure to disclose that flood insurance might have been needed in their below sea level locations and even offering to help them obtain that coverage when they sold or Renewed their policies annually if they didn’t provide it through their company’s products…which none of them do.
This is called providing due diligence on the agent’s part and if it isn’t done to a court’s satisfaction, the agent could be held liable and ordered to pay the insured’s damages sustained.
If I were sued and found liable, my errors and omissions covering my acts as an agent would pay the claimed amount and I would then be responsible for the deductible I carry on the policy. (Thank G-d, in 20 years, I have never been sued or had a problem in this area… however, I have advised many new clients to do just that to their former agents for bad advice, badly written policies or no advice when some would have been in order and these clients have generally been made whole under this method of recovery.)
It is my thought that most of the people who were insured by these companies which do not use independent agents such as myself who operate by selling the products of many companies rather than just one and by those known as “captive agents”, essentially employees of the company, often deal comprehensively only with the coverages of the policies they sell. These people are trained to advise insureds on the adequacy of the entirety of their needed coverages by State Farm but it is possible and probable that many did not properly apprise their clients of the necessity for obtaining flood coverages in a below sea level property or, maybe, the subjects were never discussed at all. Maybe the agent felt it would be wasted words as the insured was "financially challenged" or whatever...the reasoning doesn't matter, that the information wasn't provided is what the trigger for recovery from Errors & Omissions would be.
If an insured could prove that this was the case, they could, possibly, have a good case for going against the agent and the company who is ultimately responsible for the acts of it’s agents. These companies maintain computer records of files and if an agent suggests that a flood policy be purchased outside the company’s ability to provide it, that would be in the notes on the file and the agent would produce those records for it’s defense...if not, bingo!
This is called “due diligence” and we insurance agents must adhere to it’s principles or be liable for the consequences of our negligence…it means that I have done everything I can to explain to my clients the necessity of purchasing certain coverages that I feel they need to protect their financial interests and even steered them to another agent who could provide them with what they needed in the event I couldn’t get it for them through my sources. Those of you who have endured my ramblings on insurance know that this is how I approach the subject. If I feel you need to understand something, I am going to ram it down your throat until I am certain you have digested it. What you do with the information afterwards is your problem but I have done my end of the deal for you. Last week, I emailed a gal whose homeowners coverages I write that she must not forget she needs to get off of Cobra shortly, as my records indicated she needed to be off by November, 2005. Since she already is my client on her homeowners and we discussed her health insurance needs last spring, I felt I had a potential liability issue there and acted to discharge it. I don’t care if she calls me or not…I did what I did to protect myself against her later claiming I didn’t remind her it was time to do something about her health insurance.
So, if any of you know folks who have been denied by these captive companies, please tell them about this message. If even one family is made whole by my words, it will have been worth the time I have spent writing this tome…

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