When you purchase an insurance policy, you work with an agent. Perhaps you choose him or her out of all the local insurance agents in the area, or perhaps you are assigned to an agent if you try to obtain your issuance online. Either way, there is a person who works with policyholders like you to ensure that everything in your policy is as it should be.
If your insurance agent fails to do his or her job properly, however, you may find that a claim you put in after a loss has been denied. This can be considered a bad faith action, and you have legal options available to you if it does.
Examples of agent negligence
Most acts of agent negligence involve things like:
- Failing to submit your application or claim on time. Insurance companies have deadlines they expect you to meet, but your agent need to meet them, too. If the agent fails to submit your claim before the contractual deadline, or misplaces and then fails to submit your application to an underwriter at all, that agent is being negligent.
- Failing to explain exclusions. Most insurance policies fall into two categories: all risk, which means everything is covered unless it is specifically stated otherwise, and named peril, which only covers specific types of incidents. So if you purchase a policy that excludes flood coverage, your agent needs to explain that to you, and then give you options to purchase additional flood insurance.
- Failing to explore options with you. Just like your agent must explain which exclusions your policy has, he or she should also try to find a policy that works for your needs. For example, no one in Oklahoma needs avalanche protection (which, we admit, is a pretty outrageous example) – but if your agent tries to get you to purchase that separately, or tries to sell you a more expensive policy that also happens to cover avalanches, even though you don’t need everything in that policy, it could be construed as an act of bad faith.
- Failing to explain changes in your coverage. From time to time, your insurance policies may change. It’s your agent’s responsibility to let you know when they do. Perhaps they will send a letter or an email, or try to schedule an annual review. This is a critical step, especially if the change in policy applies only to you, as opposed to a change that affect all policyholders. Not letting you know of any changes puts you at risk of not being able to make a valid claim for compensation if something goes wrong.
- Failing to double check information on your application. A lot of agents have been at this for a long time, and they’ll take it upon themselves to simply fill out as much of the application as they can. This is a poor practice, because if they don’t ask the right questions, you could end up being denied by the company if it looks like you supplied false information.
As you can see, these really are acts of negligence, not maliciousness. However, they can keep your claim from being approved – and that cannot be allowed. At the Stipe Law Firm, we help Oklahoma policyholders obtain the compensation they need for their claims when an act of bad faith led to an unfair denial of those claims. To schedule a consultation at our McAlester office with an experienced Oklahoma bad faith attorney, please call (918) 505-7741 or fill out our contact form. We are proud to protect the rights of clients throughout Southeast Oklahoma.