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Is That Negligence or Not? Understanding the Duties of Your Insurance Agent


We have spent some time discussing agent negligence, but it can be hard to wrap your head around that concept if you don’t quite know what your insurance agent is *supposed* to do for you. And if you don’t know what his or her real duties are, then you might not realize until it is too late that you have been taken advantage of in some way.

Your insurance agent acts as a go-between for you and your insurance company. Sometimes the agent works only for one insurer; sometimes, he or she will work for a few of them. Your agent has a duty to:

  • Explain what the policy covers.
  • Inform the consumer about the exclusions in the policy.
  • Answer any questions you have about different policies and levels of coverage.
  • Handle all administrative duties (like filing forms, and making sure you signed where you need to sign).
  • Process those forms and any documentation you have in a timely manner.
  • Inform the potential policyholder if there is a delay in the process, or why a customer might be denied from purchasing a specific type of policy.
  • Procure the policy that the customer requested, as opposed to a lesser or different policy.

Agents are different from brokers. An insurance broker is a person who is held to a higher standard, because he or she must undergo extensive training and procure a broker’s license before he or she can act on your behalf or on behalf of the insurer. Unlike an insurance agent, brokers review your current policies and business much more thoroughly in order to understand your needs, and to ensure you get the right level of coverage.

Another important distinction – one that could end up affecting you in untold ways – is that brokers work for themselves, which means their ultimate duties are owed to the policyholders. But agents work for insurance companies, which means their duty (despite what they might tell a potential consumer) is really to the insurance company itself.

At the end of the day, your insurance agent owes you a truthful assessment of the policies that may fit your needs, and the duty to procure those policies in the timeframe he or she told you it would take. If something goes awry, or if you are missing a crucial element of coverage (for example, if you are purchasing a home in a flood zone, but your policy does not cover floods), the insurance agent should tell you immediately, and offer solutions to fix the problem. If the agent does not inform of any issues, purposely delays your coverage or does not properly explain what the policy covers, you may be able to make a claim of bad faith because of agent negligence.

When something goes wrong with your insurance policy, Stipe Law Firm is here to uphold your rights. Our McAlester bad faith attorneys protect policyholders throughout Oklahoma, and we want to help you, too. To find out more about our services, or to schedule a free consultation, please call (918) 505-7741, or fill out our contact form.