Just show me where to sign!! |
Mary Beth Beckman was not at fault when Arthur Riddle's vehicle struck hers. This story should have ended with Arthur Riddle’s insurance policy covering the damages and Mary Beth being made whole. Unfortunately, because Arthur carried only the state-required minimum limits, $25,000/$50,000 was all that was available to pay for the damages. The good news was that the Beckman family had $100,000/$300,000 limits on each of their four vehicles and a great insurance agent who had managed their coverage for years.
The bad news was that their agent saved them $28 by having Mary Beth's husband agree to reduce their underinsured motorists’ limits from $100,000/$300,000 to $25,000/$50,000. While Mary Beth and her husband both admitted that he signed the form, neither one read it. Furthermore, the agent admitted to not having explained it to them; he had simply asked for a signature on the application and the election form as a part of the coverage transaction.
The good news for Mary Beth was that the Prudential Insurance Company was required to provide the required underinsured motorists coverage. On the other hand, this was bad news for the agent’s errors and omissions carrier.
Click here for more details on this court case. |
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The insurance agent in this court case had a problem. He previously had lost the Beckman’s account due to pricing. When asked to provide a quote three years later, he wanted to show them enough premium savings to reacquire their business. He knew that price would make the difference, but he also knew that pointing out the reduction in coverage could result in his losing the account.
One way this problem could have been avoided would have been for the agency to require a signed checklist of recommended, accepted and rejected coverages to be included in every file. Although doing so does not necessarily guarantee honesty and transparency, it encourages it.
Click here to review the Personal Lines Errors and Omissions checklist. |
