This is a smaller agency, positioned to deliver high touch service and advice mostly in the personal lines area.
So, the other day a client calls regarding a potential homeowner policy claim. The policyholder is asked for a brief description of what happened, and the story is that they are being sued and their attorney suggested filing a claim to see if there might be payment for defense. And what, I asked, are they being sued for? Answer: It's a frivolous lawsuit regarding the failure to sell certain items and breach of contract to perform in a seller's capacity.
So, I make a spot and snap decision, knowing there is some, but not a lot of claim history on this homeowner policy. I decide to 'add value' to the equation and offer advice.
I say in no way shape or form am I telling them not to file a claim, but this sounds like a business deal gone bad and business liability is not likely to be covered under the personal lines homeowner form (these items that were alledged to have not been sold have nothing to do with the homeowner's primary source of self employed business income...completely off the grid). I tell them that I'd be happy to send them updated copies of the policy jackets for both home and umbrella and I suggest that they send both to their attorney and ask him to read them to be very sure there will likely be coverage before filing a claim. Why? Well, I give an explanation that is familiar to me and my clients about filing too many claims, too frequently, and how carriers can and will non renew and count claims against them even when coverage is denied, and how I would not suggest filing a claim with very little likelihood of coverage and how attorney's are prone to just throw a claim up against the wall to see if anything sticks and besides, the attorney isn't going to pay the higher premium if the homeowner is cancelled for cause, and so on and so on...I'm sure many of you know the drill.
Was this advice taken is good spirit? No, in fact a number of emails ensued accusing me of refusing the claim without hearing about it, and why carry insurance if it can't be used, and how if they're threatened with non renewal, then perhaps they should find an alternate agency and coverage and how I was rude and condescending and they now deserve an apology. Then there was the phone call from their attorney. Friendly enough, but I couldn't figure out if I was being trapped into saying something that could be used against me. The attorney admitted he couldn't find coverage, another lawyer at his firm more familiar with insurance stuff couldn't find coverage, but then he asked me point blank, if I thought there was any way for defense on this one...and, not taking the bait, I said I was in no position to render a claim conclusion and a claim would have to be filed to determine if coverage existed.
So, when all is said and done, it will be a harder decision the next time if I'm not specifically asked to give advice to go ahead and voluntarily offer my counsel. This is one where my agency isn't going to win with the client...counsel ahead of time and get accused of impeding the claim...don't say anything and have the policy non renew for claim activity and get accused of not 'warning' them of the potential outcomes. More and more, when a client calls and leads the conversation with I want/need to file a claim, I just shut up and start the process and not offer advice, and I can see that going forward, I will just keep my mouth shut more often unless asked for an opinion.
That's why we get paid the big bucks. Able to add value, but nobody cares.