It happens more often than you might think: A policy change request gets lost, an agent forgets to check the right box on a form or misses some other step in the process, and you’re told you don’t actually have the coverage you asked for. All too often, people learn the discouraging news after a car accident involving an auto on which they had requested new or different coverage when the insurance carrier tells them that they have no claim.
However, you do have options. An experienced personal injury attorney can guide you through what can be a complex process. If you require assistance, contact our office to speak with a lawyer.
An attorney’s approach to handling a claim against an agent can depend upon several factors, including, initially, whether the agent who sold the policy is a “captive agent” or a “broker agent.”
- A captive agent represents one insurance company. Dealings with that agent are treated as dealing directly with the insurance company itself. A captive agent works on behalf of his insurance company, so and the company is responsible for any mistake the agent makes. Both the agent and the insurance carrier are the targeted parties in a claim against a captive agent.
- A broker, on the other hand, sells policies from many insurance companies and is an independent business. When you tell an independent broker to make a change to your policy, the broker has to send the change to the insurance carrier and the carrier must adopt the change before it applies. If a broker’s mistake means the insurance carrier never amends its policy, the carrier typically isn’t responsible for paying the claim that involves an unadopted change. If the broker fails to follow through on the order you place for a change, such as adding a new vehicle, or makes a mistake in doing so, you can seek compensation from the broker’s own “errors and omissions,” (E&O) insurance, which may be with an entirely different insurer.
It’s important to understand that insurers can follow different practices than the above. Some may carry E&O insurance to cover mistakes by agents, whether a captive agent or a broker, while others may have a policy of simply adopting a policy change involving agent error, giving coverage to the insured despite the mistake.
Getting you the coverage you deserve after an insurance agent makes a mistake can be a complicated process requiring skill and experience. Agents and insurance companies may point fingers at each other, especially in a big claim. An agent or an insurer may bring in the other party so the plaintiff’s attorney has to oppose not one, but two lawyers. If you’ve been injured in a car accident and learn you don’t have coverage because an agent made a mistake, it’s crucial to contact a personal injury lawyer sooner rather than later.
Our firm has recovered more than $125 million on behalf of victims. We are ready to assist you. Contact us today to speak with a Rochester car accident lawyer experienced in dealing with insurance companies.
Besides Rochester, we serve the following major southeast Minnesota cities: Red Wing, Winona, Mankato, Austin, Albert Lea, and Owatonna, and all outlying communities, as well as the cities of Minneapolis, St. Paul, Duluth, and Bloomington. We also serve the Iowa cities of Mason City, Charles City, Osage, Spencer, Garner, Forest City, and Northwood and the Wisconsin cities of La Crosse, Onalaska, Sparta, Viroqua, River Falls, Ellsworth, Whitehall, and Black River Falls.
I recently received a quote from a State Farm agent for a premium for an umbrella policy which I paid instantly. 4-5 weeks later, I received an invoice from State Farm for 3 times the written quoted amount. State Farm admitted that the agent made a mistake in his quote but refused to honor the quote. There has been thus far no loss and the likelihood of one occurring is highly unlikely. When the policy expires the matter will be moot. However, is not the insurer liable and responsible for the negligence of its captive agent?
Thanks for contacting us with your questions about your State Farm umbrella policy. In short, an insurer is responsible for the errors or omissions of its agents in dealing with an insured, unless the error was so obvious that anyone could tell that it was a mistake. Assuming that the error was not so great so as to have put you on notice that a mistake had been made, you could, in any event, expect that State Farm would contest any claim. Frankly, given the fact that an umbrella only comes into play when there has been a very serious occurrence which exceeds the coverage of the underlying liability policy, I certainly would not want to rely on an umbrella policy when I knew that the insurer would surely contest it.
Unlike most insurers, State Farm offers two varieties of umbrella policies. The first, and by far the most common, is an umbrella policy covering only liability claims against the State Farm insured. That type of umbrella tends to be rather inexpensive since State Farm insureds are usually better drivers who are not as likely to cause an accident as drivers who drive uninsured or have the kind of bad driving record which forces them to insure through a high risk insurer. The better umbrella, of course, is one which covers not only liability claims, but also uninsured/underinsured claims. That coverage is more expensive because it is far more likely that an inadequately insured or uninsured driver will cause an accident than a good driver.