Posted On: August 18, 2006, 6:32 pm CDT

Posted By: Jacqueline

See, this is the whole point. Although these past few years hurricane and tornado activity has been at record levels, it is no new phenomenon to anybody that coastal regions and areas along the rivers and creeks have had past floods and potential for future floods. It is not realistic to expect that you will never suffer any serious risk to your property or life (or both) due to an earthquake if you live near the San Andreas fault.

The problem is that everybody likes to think "it can't happen to me" when in fact, it can and often does. Then when it DOES happen, and those affected are under-insured or uninsured for such a calamity, everybody else is supposed to suffer higher insurance premiums as a consequence. Lawyers end up having a field day and the poor agent is always blamed for not offering the coverage when in fact, it is usually the case that the agent DOES offer but if the insured is not forced by law or lender to buy, they won't buy it and the agent cannot force them to buy it.
The old addage rings true: you can lead a horse to water but you can't make him drink.

If I seemed a tad angry, it is because I am angry and have every right to be because I am not only an agent, but I am also a homeowner, an autombile driver, and hence, I am an insured, too.
When my rates increase because of catastrophic claims plus lawsuits like the one referenced where the insureds were seeking $158,000 (which sounds like a case of someone seeking "unjust enrichment")that affects the rates that I and every other insured must pay. Even when the carrier and the agent prevails, there are E & O deductibles and costly legal fees. All this is taken into account when carriers must examine their rates and taise them to compensate for these expensive legal defense fees, plus court awards.

As an agent, it affects affordable E & O coverage. Customers who suffer losses are not always willing to be honest when they are being told by an ambitious lawyer looking at the "deep pocket" point of view that they can get what they want, even if they are not legally or morally entitled to it, by suing their insurer and their agent claiming that the agent either failed to offer the policy or that the agent didn't educate them, I get an attitude because this is the kind of malady that adversely affects ALL agents and ALL insureds.

Lastly, I am a tad angry because it is downright stupid for anyone to buy or build McMansion homes near areas where there has been past incidents of catastrophic hurricane damage and decline flood insurance because they think "Oh well, I have a homeowner's policy. Let the insurance company, the agent, FEMA, the public at large pay me for everything I lose." I feel bad for that poor agent who incurred steep legal costs by having to pay the high E & O deductible to defend himself in this case when he probably did offer the coverage or at least provide a referral to another agent who did, and the people probably did what most other insureds do, balk at paying the price and choose to forego the coverage.