In the complex world of insurance, the bond between a client and their insurance agent is vital. Trust and transparency form the bedrock of this relationship, creating a partnership aimed at securing the client’s financial well-being. Despite these intentions, disputes and grievances can arise, leaving clients wondering if legal action against their insurance agent is a viable option. This article aims to shed light on the topic “Can I sue my Insurance Agent?”
Can I Sue My Insurance Agent?
Yes you can sue your insurance agent in the event that your insurance agent failed to adhere to their duties, you may be entitled to sue them for negligence (and thereby recover damages for the losses over which your insurer has refused to extend coverage). You can sue an agent:
(1) who misrepresents the nature, extent or scope of coverage being offered or sold, either intentionally or negligently;
(2) who negligently fails to disclose material information regarding insurance coverage that the insured requested;
(3) when there is a request by the insured for a particular type of coverage but the agent does not obtain it; or
(4) when the agent expressly or ostensibly represents himself as having expertise in a specific type of insurance being sold and thus takes on a “special duty” to the insured.
Common Ways Your Insurance Agents Can Be Negligent
When you’re filing a claim against an insurance agent, you are basing it on the grounds of negligence. The list below provides examples of ways your insurance agent can act negligently.
- Failing to inform the client that the requested insurance policy was not procured
- Misrepresenting the type of coverage the client was receiving under the policy sold
- Retaining the premiums paid by the client and owed to the insurer
- Failure to renew coverage or failing to notify the client that coverage was not renewed
- Improperly advising the client about the type of coverage needed or provided
- Misrepresenting the type of insurance they can offer
- Failing to pass on communication from the insurer that was intended for the client.
Damages Available when you Successfully Sue your Insurance Agent
The compensation you receive for a loss suffered due to your insurance agent should be the amount that is necessary to place you in the same position you would have been in had the negligence never occurred.
Therefore, If you suffer a loss due to the negligence of your insurance agent, then the agent is required to pay damages equivalent to the full losses that you have suffered as a consequence of their particular acts and may have to pay you for consequential damages as well.
For example, if the insurance agent failed to secure the insurance needed to cover fire damage to your home, and because of this you are required to spend an additional 30 days in a hotel while the matter is addressed, the additional time spent in a hotel is consequential damage. A Miami bad faith insurance attorney can advise you as to what those losses may be.
What are an Insurance Agent’s Duties and Responsibilities?
Insurance companies and their agents have a legal obligation to act in a certain way according to multiple state laws. Some of the responsibilities that insurance agents have according to these laws are:
- To obtain the proper licensure by passing an insurance exam and completing the application.
- To recommend the appropriate insurance plan based on a client’s specific needs.
- To obtain any insurance policy that is specifically requested by a client.
- To notify the client of issues encountered when trying to obtain the coverage requested.
- To be transparent when representing the terms and provisions of an insurance policy.
- To explain the terms of the coverage that has been obtained to the client.
- To notify clients if the insurance company is having financial troubles, in some circumstances.
How Can I Avoid Insurance Agent Negligence?
The easiest way to prevent insurance agent negligence is to do your job correctly, carefully, and morally. We understand mistakes can happen, but in an industry such as this, slipups can be costly.
Be sure to double check your work, and if you’re unsure of something, don’t be afraid to admit that to your client. Be honest and take the time to find the answers they need. Lying is never ethical and could come back later as a serious problem.
Additionally, never, under any circumstances, make false claims or false promises to clients. Making sales as an insurance agent is a priority, but really your top priority should be finding a plan that works for your client.
Overselling a plan by making your client think they will have the “perfect” coverage can hurt both them and you in the long run. Walk through plan options with your clients thoroughly. You may not be able to find a plan that’s exactly what they’re looking for, but if you have a diverse portfolio, there should hopefully be an option that fits the majority of their needs.
The insurance broker can be held liable for failing to obtain the proper insurance for his client. The insurance broker can be held responsible under either negligence or breach of contract.
The success of a case against an insurance broker depends upon the unique facts of the case which must be carefully reviewed with an attorney.
Q1: Can I sue my insurance agent for any dissatisfaction?
Legal action should be based on specific grounds such as breach of contract or negligence.
Q2: How can I prevent issues with my insurance agent?
Choose reputable agents, regularly review policies, and communicate concerns promptly.
Q3: What is alternative dispute resolution (ADR)?
ADR includes methods like mediation and arbitration as alternatives to traditional lawsuits.
Q4: How long does it take to resolve a lawsuit against an insurance agent?
The duration varies, depending on the complexity of the case and legal processes involved.
Q5: Can I still use my insurance if I sue my agent?
Generally, ongoing coverage is not affected, but it’s advisable to consult with legal counsel.