Texas Insurance Agent Negligence Attorney
Most everyone has gone through the process of purchasing insurance. For most of us, it is probably something we do not look forward to doing. Many people hire an agent or broker to help them purchase the insurance they need. But the role of an agent is even more significant -we often rely on them to help make claims, send reminders, and forward notices received by the insurance company. But what happens when a mistake takes place? For many policyholders, finding out that your insurance is insufficient due to an agent’s mistake can lead to big damages and a total headache.
TYPES OF AGENT NEGLIGENCE ISSUES?
There are several different types of agent and broker negligence issues that we commonly seen. The most common issue is failing to procure or purchase the type of coverage that was requested. Another example of agent negligence is when the agent or broker fails to forward notices or communications from the insurance company. However, it is not uncommon for an agent or broker to provide recommendations organize that the policyholder relies on to their severe detriment.
PROCURING OR PURCHASING THE CORRECT INSURANCE?
In Texas, an agent’s essential duty is to procure or purchase the insurance requested. This means that your agent has an obligation to purchase the specific type of policy that was requested in the amounts of coverage that was requested. If the agent or broker is unable to purchase that insurance for you, then he or she must tell you promptly. While purchasing the correct type or amount of insurance may sound simple, the process of informing an agent or broker about the kind of insurance to purchase can be complicated. For example, you have had a significant amount of discussions with your agent about various types of policies, endorsements, riders, or additional coverages. In these situations, your agent may simply let something slip through the cracks or even worse.
An agent also has a duty to inform you if the insurance you requested could not be purchased. Again, this duty sounds straightforward enough. However, there are instances where a delay in informing a customer that insurance could not be purchased leaves the customer exposed without proper insurance.
MISREPRESENTATIONS TO CUSTOMERS
Importantly, courts have held that an agent or broker cannot make misrepresentations to their customers. In situations where there has been a misrepresentation, there needs to be evidence that the policyholder relied on it and suffered damages as a result. Misrepresentation issues with agents sometimes involve a statement that the insurance was purchased when it was not. Other common misrepresentations occur when agents tell a customer that certain coverages are in a policy that are not.
DUTY TO KEEP INFORMED
Courts in Texas have also stated that an agent has a duty to keep a policyholder informed. For example, if an agent receives an important notification related to the policyholder, the agent needs to properly notify the policyholder. The reasoning behind this requirement is clear. Policyholders rely on agents for updates and notifications about their insurance. The agency relationship is based on following the customer’s request and providing timely updates.
In reality, the failure to inform a customer can have dire consequences. For example, we have represented clients in cases where the agent did not inform the policyholder of a cancellation notice only for their home to suffer catastrophic damage a few weeks later.
THERE IS NO GENERAL DUTY OF CARE OWED BY AN AGENT
Unlike a lawyer or a doctor, an insurance agent or broker do not owe a general duty of care. This is because an agent’s primary responsibility is to purchase the correct insurance and keep the customer informed. Sometimes an agent will voluntarily provide advice to a customer. For example, here are some types of advice that an agent may provide:
WHAT KIND OF DAMAGES CAN YOU RECOVER?
Normally, the starting point for recovering damages in an agent negligence case is the loss that should have been covered by the insurance that was requested. In addition, you may recover other consequential damages as well as general damages for stress and anxiety. It is important to keep in mind that the damages you can recover are very much case specific.
WHEN TO HIRE AN ATTORNEY
Agent and broker negligence cases often have all or nothing implications. If your agent did not procure the insurance you needed or mispresented the insurance you purchased, you may be in a situation where there is no coverage for a significant loss. If you are dealing with a case of possible agent negligence, you should consult with an experienced attorney to discuss your options.
