His name may not be Emerson; but, this form is evidence aplenty that an insurance agent can be a genius dressed in its working clothes.
It came via email from anonmyous reader in Louisiana which makes it an even smarter move. Courts there, if you recall my earlier post, have held an agent is not responsible when a policyholder doesn’t by all the coverage needed.
The practical application of the judge’s ruling is that consumers have no reason to believe their State Farm agent will help them find the coverage they need when it’s more than the maximum available under the federal flood insurance program.
A ruling like that, however, doesn’t necessarily keep an agent out of court; but, I bet having a form like this signed and in the policyholders’ file will do the job.
Filed under: Civil Litigation, Flood Insurance, Insurance, Insurance Law, Nowdoucit | Tagged: Excess Flood Coverage, Insurance, Waiver of Excess Coverage
nowdoucit
This form is particularly useful in combating those financially-induced cases of memory loss that occur after major storms.
You know what I mean: the client that no longer remembers being offered excess flood cover? The client that said to his agent “I want the cheapest cover I can get”? It is funny how many clients forget those conversations once their lawyer has told them that remembering them would be harmful to their financial interests. As if by magic, their testimony becomes “I wasn’t offered the cover (a lie), and if I was I would have bought it” (another lie).
Imagine, if you will, a client who is proffered this form who HASN’T been offered excess flood cover. (Bad practice, but let’s assume for the sake of the exercise that it happens.) One would expect him or her to say “what is this about?”. Having asked that question, one would further expect the agent to describe excess flood, what it does and what it costs. If the client, having heard all of that, wants it, then the agent will be happy (he just made a sale), the form will be torn up and the client better protected. Happy ending for all. If the client says no, he or she signs the form and we move forward.
What’s not to like? It sounds to me like the form is welcher insurance for the agent. In an environment where such insurance is badly needed.
Imagine how this would have helped if agents had been doing this pre Katrina instead of flying on auto pilot. This comes from the lessons learned file Mr CG. I bet more ppl will hear of excess flood coverage as a result.
sop
…and the other side of the story, claimsguy, is there will be documentation that separates the agents that work for their sales and those that just write ‘em up! Otherwise, you’re just assuming who the “welcher” is.
Think you could come up with one for the ACC?
Claimsguy gives agents/brokers way too much credit. Most agents/brokers (even pre-Katrina) could not place excess flood for residential property, at least not in South LA. For example, because a State Farm or Allstate agent could only write for those 2 carriers, neither of which offered excess flood, then the customer would have to go elsewhere for excess flood. But then, the customer might move all of his/her insurance to the agent/broker who could place excess flood. Great reason for the agent/broker not to mention it . . . BECAUSE THEY COULD NOT PROVIDE IT, BUT SOMEONE ELSE COULD.
I can assure you that the State Farm agent on my commercial property never so much as mentioned “excess flood,” much less gave me a form confirming rejection. And about 6 weeks after Katrina, an ANPAC agent told me there was no such thing as “excess flood.” An argument ensued; the agent was obviously wrong.
Assuming Claimsguy’s premise, I would think even if the customer made the decision to be underinsured by several hundred thousand, or more, the agent/broker would at least have the common sense or professionalism to confirm such a risky move by sending a letter to his paying customer documenting the insured’s massively underinsured status and recommending excess flood.
I don’t know where claimsguys is from, but the reality of the situation in LA is that most people did not even know there was such a thing as “excess flood” because their agents/brokers never mentioned it.
I don’t think a lot of people knew Rick, which brings up the $ FEMA pays the insurance industry for marketing the program.
I’ve never seen marketing materials but I’d be interested in seeing if there is a single set or if those developed by companies that do offer “excess flood” mention that option.
One option the government needs to consider is only letting independent agents sell NFIP policies so that property owers have access to the coverage they need to be fully protected.
Something else I learned post-Katrina (maybe Claimsguy/Agentguy already knew this) is that some companies offered primary, multi-peril policies for commercial property, which included primary, non-NFIP flood coverage. These were very rare.
One company, Aspen Ins. Co., had such a multi-peril policy with a private, primary layer of flood insurance. So, if you think very few people knew about “excess flood,” how few people do you think knew there were primary policies (not capped at $500,000) for commercial properties, independent of the NFIP? Now that was a great broker who found this policy for my client, one doing his job.
That is something I didn’t know Rick. I found out about excess flood after the storm, never knew about it before the storm, none of my SF agents ever mentioned it.
sop
It is quite common for commercial policies to cover flood. Quite common. Commercial policies come on a very wide variety of forms. I suspect that this is due, in part, to the field being less regulated than the personal lines world, where the policy forms often have to be submitted to and approved by the State DOI in advance.
why would commercial be subject to less regulation – or why any variation in regulation of different types of coverage at all?
regulation serves as a consumer protection (if it doesn’t wink) and should provide equal protection for all consumers.
It is not common, from my experience, for commercial policies in South Louisiana to cover flood, but it might be in other parts of the country. They certainly do come in a wide variety of forms, but in the many I have reviewed here, I have seen only one with primary flood coverage.
If I am wrong, and primary flood policies are “common” in LA, the agents/brokers have done a piss-poor job of conveying this info to their customers.
My business policy with Lafayette was flood excluded.
sop