Posted On: August 18, 2008, 3:37 pm CDT

Posted By: dbazzell@sbcglobal.net

Posted On: August 18, 2008, 2:35 pm CDT
Posted By: Kevin Kennedy
"GUARANTEED, if he were to lose it all because he runs over a kid in a crosswalk, he sues me claiming he didn't know he was underinsured."


I hear ya Kevin!

I too am a Calif Agent. Last week I received a call from an insured regarding his homeowner insurance. He told me he was confused because he received two policies in the mail after purchasing his his home. After some discussion it became evident that despite his agreement to purchase the policy from us and the directions of his escrow company for us to issue said policy, he purchased a different policy two days after ours was issued. The one we issued was a comprehensive homeowner policy with guaranteed replacement cost on the dwelling, replacement cost on PP, all perils/named exclusions etc...

The policy he purchased on his own was a basic dwelling fire policy at ACV, named perils only, no theft coverage and ACV on pp etc...

He asked me to cancel my policy at which time I explained the coverage difference and afterwards he said "thanks, but go ahead and cancel my policy with you". I told him I need the request in writing and mailed him a 2-page disclosure listing the policy differences and specifically stating that he was "with full knowledge and understanding" of the coverage difference in the two policies, choosing to cancel the policy offering the superior coverage. When he got the letter he read it and calls me angrily asking "what the heck is this??" I told him that if his house burns to the ground and he is left in financial trouble due to a gap or lack of coverage, I do not wish to be sued claiming that I cancelled the better policy without his permission and that he had every intention of keeping my policy and canceling the other. He reluctantly signed the disclosure but at least it made him think,and I have peace of mind knowing that I did all I could.

I have had many clients change their mind when buying homeoenwer insurance by putting quite blunt language in the disclosures so that they buy based on coverage and not on price alone. Someone buying a $500,000 home who purchased a DP1 policy to protect it is really not a client I wish to have in my book but if they sign the disclosures I'll take them and they can't say I never warned them.