Agents owe fiduciary duties to their customers, which require them to gather all pertinent information about the risk to be insured. This entails asking a series of questions on the characteristics of the risk the insured want to insure against. All of the collected data must be communicated to the underwriter of the carrier for which the agent desires to quote/place the policy so that the underwriter can approve and bind coverage appropriately.Do you want to learn more? Visit Miller Hanover Insurance .
If an insured withholds material information requested by the agent and underwriter, who then places the policy in effect, the insured bears the risk of any uncovered claims resulting from the omitted information. The blame falls squarely on the agent’s shoulders if he or she withholds key information or fails to ask proper questions. The agent should have asked the correct questions, gathered the insured’s responses, then sent those responses to the underwriter and/or carrier via the application. This is the point at which not all agents are created equal.
Whether it’s personal or company insurance, insureds seek out an agent with whom they feel at ease while dealing with their insurance needs. Insureds who have a nice fuzzy feeling from an agent the first year are less likely to switch from year to year unless the agent commits a gross fiduciary error, such as placing a policy that does not match the required coverage (usually not discovered until a claim is filed and not paid). That is Marketing 101: spend 90% of your marketing budget on gaining clients and 10% on keeping them. Unfortunately, some agents will go to any length to attract and retain their clients, even if it means operating in the best interests of the agent rather than the insured.
This is a problem I run into more often than I’d like to admit. When it comes to recruiting new business from my community, I am no different than any other agent. For the sole goal of getting new clients, I shake hands, kiss newborns, attend social occasions, and join networking clubs. That means I’ll need to impress someone more than their existing agent. When the current connection has been well established over a number of years and the incumbent agent has been conducting business as usual, the problem arises. Business as usual indicates that the agent has built a good enough rapport with his client that he can fill out the application for him, presuming he knows exactly what the client needs and the risk’s specific features. “Mr. Client, this new home purchase is identical to the three others we insured for you last month. I’ll take care of that for you.” There are no more questions. There was no more information asked or provided. The client thinks to himself how convenient it is that all he needs to do is phone his “amazing” agent, tell him he just bought something similar to previous purchases, and BAM, everything is taken care of. Covered. No more wasting time on insignificant details.