As providers of vital benefits to millions of Americans every year, insurance companies must follow heavy government regulations. Because of this, there are certain responsibilities that every agent who sells and promotes insurance policies must uphold. When a representative of an insurer falls short on one of these responsibilities, this is where insurance agent negligence lawsuits come into play. Consider these three examples.
1. Failure To Assess Needs
Under the law, insurance agents should adequately assess customers’ needs to match them with the best coverage options. However, sometimes this does not happen. If an agent fails to appropriately assess a customer’s needs and the customer financially suffers, it can lead to a lawsuit.
2. Misrepresentation of Application Details
Whenever an agent sells an insurance package, there is usually an application process that customers must go through for every new policy. When an agent walks customers through applications, they must fill in the information truthfully. If he or she misrepresents anything the customer says, it can be grounds for legal action.
3. Failure To Notify About Cancellation
If an insurer cancels a customer’s policy, the assigned agent has a duty to send out notification of the pending cancellation. Typically, agents notify customers of premature cancellations through mailed letters or email communications.
There are numerous situations in the insurance industry that present opportunities for negligence lawsuits. Understanding responsibilities can help protect your agency.