An insurance policy, by definition, is a UNIILATERAL CONTRACT OF ADHESION. The carrier writes it, the insured accepts it and any ambiguity is decided in favor of the insured. However, there is nothing ambiguous here. If this provision doesn’t hold up because the insured didn’t sign the contract, then by the same argument, the carrier shouldn’t have to honor the rest of the contract and pay any claims. They should seek declaratory judgement on this basis and proceed with the claim accordingly…
Unless it is very different in different states, the agent does sign the insurance contract, as Agent for the company. Wouldn’t this dispute then go next to the nature of the agency contract, between Diaz and Rain Hail??
You need to re-read the article. Arbitration between the insured and insurance company was upheld. The company won. The insured is no suing the agent. It is the agent who was not a signatory to the arbitration clause. However, previous decisions have held that non signatories can seek arbitration.
I’ve had numerous discussions with many ins agents about the use of arbitration agreements between the agent and clients. For some reason, agents seem to think that they cannot do this. Attorneys do with their clients, so why not ins agents? The agreement can even limit any damages to the amount of the commission that the agent received for the policy. The agents E&O premium should even go down. Agents are afraid that they would lose a sale. I’ve even advocated a “quote” agreement. If the agent finds coverage gaps, or a premium savings, and the prospect simply hands that info to another agent, the prospect would be liable for the lost commission or some other amount.
An insurance policy, by definition, is a UNIILATERAL CONTRACT OF ADHESION. The carrier writes it, the insured accepts it and any ambiguity is decided in favor of the insured. However, there is nothing ambiguous here. If this provision doesn’t hold up because the insured didn’t sign the contract, then by the same argument, the carrier shouldn’t have to honor the rest of the contract and pay any claims. They should seek declaratory judgement on this basis and proceed with the claim accordingly…
Unless it is very different in different states, the agent does sign the insurance contract, as Agent for the company. Wouldn’t this dispute then go next to the nature of the agency contract, between Diaz and Rain Hail??
You need to re-read the article. Arbitration between the insured and insurance company was upheld. The company won. The insured is no suing the agent. It is the agent who was not a signatory to the arbitration clause. However, previous decisions have held that non signatories can seek arbitration.
I’ve had numerous discussions with many ins agents about the use of arbitration agreements between the agent and clients. For some reason, agents seem to think that they cannot do this. Attorneys do with their clients, so why not ins agents? The agreement can even limit any damages to the amount of the commission that the agent received for the policy. The agents E&O premium should even go down. Agents are afraid that they would lose a sale. I’ve even advocated a “quote” agreement. If the agent finds coverage gaps, or a premium savings, and the prospect simply hands that info to another agent, the prospect would be liable for the lost commission or some other amount.