This article, from Aldridge & Cox, Risk Management Consultants (www.aldrichandcox.com), addresses a pet peeve of many clients, and of course, me! It’s well-written and right on target.
Do policyholders read (and understand) their own insurance policies? Perhaps a better question is, do agents and brokers read (and understand) your insurance policies before they are delivered to you? The fact is that many insurance agents and brokers are trying to avoid Errors & Omissions claims by dutifully telling their insureds to read their own insurance policies, thereby hoping to avoid responsibility for any mistakes or gaps in coverage.
It certainly is always a good idea for policyholders to read their insurance policies and to have at least a general understanding of the coverage they provide. Let’s face it, however, most policyholders don’t. Nevertheless, at a time when insurance agents and brokers are striving to be perceived as professionals (not just sales people), shouldn’t a policyholder reasonably expect their insurance agent/broker to read their insurance policies before delivering them? Shouldn’t a policyholder expect their insurance agent/broker to advise them on their insurance needs and the extent to which the policies they are purchasing meet those needs?
Unfortunately, it has become a standard practice for many insurance producers, when sending insurance policies to their clients, to include language in their cover letters that is clearly intended to shift their own duties and responsibilities to their clients. For example, one producer says, “Please examine [your insurance policies] carefully to make sure the limits of coverage meet your needs and that no items have been omitted.” Another says, “It is important that you review the policy and advise us at your earliest opportunity of anything which you believe is not in accordance with the negotiated coverage and terms.” Still others say, “Please read your policy. If there are any errors or if you have any questions or need to make any changes, please contact our office immediately.”
The truth is that most policyholders not only do not read their policies, they probably don’t even read the transmittal letter from their producer, so they are not aware of the subtle (or not so subtle) attempt to shift responsibility. The next time you receive your insurance policies, look to see if your insurance agent or broker is telling you to carefully review your policies or to advise them if you find any problems in the policy. If that happens to you, consider sending a letter or e-mail to your agent or broker along the following lines:
“Thank you for sending me my insurance policy. As you suggested, I have read
through my policy but, to be honest with you, I don’t really understand much of
what I read. It is a little confusing. Nevertheless, I know when I selected you as
my agent/broker I did so knowing you were a professional. Consequently, I am
confident that you have thoroughly reviewed my insurance policy as well as my
insurance needs, that you have taken any corrective actions necessary and/or
communicated to me any steps I may need to take to ensure that my insurance
protection will reasonably meet my needs.”
We’d love to see the agent/broker’s reaction!
— Charles H. Cox (firstname.lastname@example.org)
Call or email (510-685-3883 | email@example.com) if you need to discuss your unique situation or need help drafting a letter! There’s no cost or obligation for brainstorming.