Sounds like Tom and Rita don’t have the financial smarts to do the big (money) business deals and this company saw that and took advantage of them. In the end Tom and Rita have no one to blame but themselves. Stupid is as stupid does!
That is unfair and unkind. Most people haven’t a clue what they are insured for and the more they have to insure the more confusing. Most people have a life beyond their insurance policies…and they place their trust in the agent they select…their former agent should be tarred and feathered by the rest of us for giving the majority of us a bad name.
Gee, talk about unfair. A competitor broker makes an allegation against another broker and you’re ready to tar and feather the guy. Gee, one agent would never talk bad about another agent just to make themselves look good or to obtain the business.
What’s happened to the good ole days when Agents/Brokers were “friendly” competitors? Big Corporate has made our industry such a “Dog-Eat-Dog” environment. It’s very sad.
More than likely the new broker has an ax to grind with the old broker and they’re nit pickin’ at stuff. Example: Home insurance has a liability line at say 1,000,000. The Personal Excess Lia (Umbrella) at 10 million only needed 500,000 as an underlying limit but it was set a 1 mil. Yea, the new broker could say, see, you were paying for 500,000 more on the homeowners than you needed for the Umbrella. Overlapping life coverage, auto, scheduled PP, On, and On and On. There is much more to this story than this limited article gives us. These brokers dealing with the wealthy in the same town are brutal and carniverous.
I agree. Their attorney should start by asking questions about the request to bind coverage and follow the trail. Most likely, as you mentioned, it will lead back to their business manager. I doubt the broker was binding coverage without a request…
How many business managers really understand the insurance industry and the nuances of coverage? Obviously they had a long term relationship with their broker and they trusted this individual.
If the allegations are correct what decent insurance agency or brokerage firm is going to issue multiple policies for one risk? That’s just sloppy work.
I AM NOT SURPRISED AT ALL. THE CORRUPTION I HAVE SEEN IN THIS BUSINESS OVER THE LAST FEW YEARS IS OVERWHELMING. THIS IS NOT THE SAME INDUSTRY I HAVE WORKED IN FOR THE LAST 30 YEARS.OLD SCHOOL ETHICS IS LEFT TO THE OLD SCHOOL, IT IS NOT AS PREVELANT IN THE INDUSTRY AS IT ONCE MIGHT HAVE BEEN.SOME OF US ARE A DYING BREED, BUT WE SLEEP AT NIGHT.
Norm, interesting comments. I have been in the multiline insurance agency business for over 40 years and I certainly am not aware of any corruption at all, let alone a increase as you seem to be alluding to.
Most agencies and insurance companies still handle their business on a very high ethical level and insureds are well taken care.
Norm on the surface I cannot agree with you more. However, I believe it’s a combination of unethical behavior, a lack of training and a serious lack of valuable insurance education.
As we all know, not every agency or agent is created equal and if the allegations are true, the incumbent agent should be tarred, feathered, and their photo should be posted on the internet.
Guess Tom Hanks and his wife are too stupid to read the policies sent to them by the various companies. They apparently didn’t pick-up the phone and ask questions.
Guess the new broker will one day be sued for negligence when Forrest Gump realizes they are now under-insured and don’t have more than a single policy (it’s called excess coverage) to insure them in the event of a claim.
That is no surprise. When a man is not in charge of his affairs, this often happens. I found a fleet of vehicles, I thought, owned by a dude ranch. When I visited the ranch and asked to see the vehicles, I discovered there were three, not 23. Each time a vehicle was purchased, the home office (40 miles away) added the new vehicle to the policy. None were ever removed. The broker was one of the big 4.
I questioned why an oil company needed a liquor liability policy. My inspector brought me a photo of an abandoned sign in a desert strip mall. For ten years, the big broker had carried a liquor liability on the sign. The liquor store was long gone and a landramat had replaced it many years ago.
When no one is really in charge, this is a common occurrence. Paid business managers often pay little attention to details. Most have very limited insurance knowledge. Some even use the insurance to buy favors. The more complex and the larger the account, the more things fall through the cracks. One person pays the bills, another does the ordering. They do not communicate well. Duplicate policies often result: the old policy is renewed and the buyer orders coverage from another broker, thinking the original policy would just lapse. instead, both were paid.
Sophisticated insureds work WITH their brokers to make sure they have the big picture and know where to go to get the details. When the brokerage is fragmented, with different people handling different aspects of the account, no one is coordinating, and no one gets the over-all picture.
Often it is a case of having too many, or no, cooks in the kitchen!
Maybe there is a real case here and someone was negligent – and I guess the lawsuit will flesh that out. I just hope that this is a big lesson to some brokers out there — when you’re talking to an insured about how the other guy doesn’t know what he or she is doing and how much better of a job you’re going to do – this is going to happen. The problem (if you want to call it) is that while our industry has some finite parameters, there is a whole lot of “art” involved in insurance and the best way to buy coverage for the many different exposures. The allegation that the Hanks’ paid too much for insurance — well, I guess all institutions could sue based upon what they paid 5 or 6 years ago and what is available today, right? This is a very slippery slope and the broker who is helping the Hanks’ now, may be on the other end later. The moral: BE CAREFUL WHAT YOU ACCUSE OTHERS OF!
Surely this is frivolous, right Proud Conservative? Those folks should have looked out for themselves and not be looking to blame an insurance broker looking to maximize profits.
Actually, Tom Hanks is a very proud liberal. What does that have to do with anything (aside from that most liberals want others to pay for everything they desire)?
If you have seen the film of the Tacoma Narrows bridge waving around and collapsing in the ’30s. You also saw a broker scam. The bridge district ordered an All Risk policy on the bridge for something like $1.1 mil in coverage thru a local agent. The agent allegedly ordered a $100,000 policy from United Pacific (now long gone) and when it came in somehow another “1” was typed in front of both the amount of coverage and the premium. What can happen to a bridge? Harmonic vibration. Told to me by UP’s local mgr. back in the ’70s.
I’d love to know how many times a diligent, enterprising agent contacted Hanks or “his people” to review and bid their business and were told “No; we’re happy with what we have”, or “We already do all our business with (Mamma/Brother-in-law/college buddy/the production company/…)”.
When is a serious error or possible insurance fraud by an insurance agent or broker frivolous? Should the insurance broker be held accountable for their action or inaction? Isn’t this what Insurance Agents/Broker E&O is all about? In my state the insurance department would consider this unethical even if it is found not to be illegal. Tom Hanks is an actor not an insurance agent, broker or risk manager. Tom Hanks like other insurance consumers rely on the professional expertise of their insurance agent, broker or risk manager.
We’ll never know enough to judge if the suit is frivolous or not. The courts will do their job. When you take on HNW complex personal programs with national and international holdings there are a lot of moving parts. Some of them can cross from personal to commercial. You’re usually working in the admitted and excess markets. Each state has their own insurance idiocies; some states require WC on home policies, others require stand alone policies. Wind coverage on the east coast is one thing; earthquake on the west is another. Challenges abound. You need to bring HNW experience and your “A” game every day. I can’t stress enough how important it is to have one person or one team reviewing all policies with a critical eye for overlapping coverage in the contracts.
Clients of this nature lead extremely busy lives. Imagine how much paperwork you have dealing with one or two homes, your cars etc. Now multiply that by eight or ten multi-million dollar homes, ten or fifteen cars, and all the recreational items. In addition to the insurance paperwork, you’ve got taxes, registrations, and emissions compliance issues. The list never ends. Naturally, you’ll have trusted advisors working for you.
Before you start with the envious reactions, stop and think about what else these clients do. Commercially; they’re responsible for empires in their chosen fields. Personally; they’re responsible for tremendous estates — from what I am privileged to see they employ great numbers of personal staff and trusted advisors; they donate to many wonderful institutions and charities. They buy and preserve art for future generations. They save historical treasures. They promote art opportunities in schools and communities. Much of this they do in complete anonymity because there are organizations ready to exploit any bit of news they garner.
HNW clients pay for and deserve the same competence and diligence we all want when we hire a broker to manage our insurance interests. My point is if you’re going to have a career in this environment make sure you have the experience and resources to do the job right. And don’t be afraid to fire the client. If you aren’t afforded the opportunity to meet with decision makers, you can’t do the job right. Part ways and use your skills for a client who values what you bring to the relationship as a professional insurance advisor.
So far it appears to be just an accusation against a Brokerage with a long standing very fine reputation -how many clients have we all encountered that simply do not “understand” insurance or just what the premiums actually pay for. How often have we heard, “well, how much coverage do you (agent) think we should be placing on buildings xyz” – I love it when the consumer puts the burden on their agents for reasons of their own omissions and often laziness, even when it comes to the values of their own property and then, when something goes sideways decides to go after the agency to collect – welcome to the world of E&O’s claims – I look forward to the verdict for this one…
It will be interesting if it is actually an error of ‘items’ covered or a situation of the interpretation of the coverage provided by the carrier. Like to know that first before I pass judgement on the original broker.
What concerns me greatly is the large number of comments trying to explain away the “charges” against the first broker and make the new one the bad guy. Sounds like alot of people identifying with the original agent.
Consider…for 20 years an insured has entrusted his insurance packaqe to one agent. Do you really think that a new agent walking through the door making allegations against the incumbant’s ability and honesty would result in the incumbant being fired and sued? Truth is that the new agent may have simply provided a thorough analysis and current market proposal and the savings was so great that someone noticed.
Do you think a lawyer was dumb enough to file a high profile suit based on allegations alone?
Um, are you really that naive? “Do you think a lawyer is dumb enough to file a high profile suit based on allegations alone?” That is pretty laughable. The answer is “YES!”
There is just too little information for me to come to a conclusion if there was something wrong here. My question is this real property being insured multiple times (homeowners, earthquake, flood, and wind storm) all provide building coverage for the same property but cover different pearls. There is just too little information to make a decision.
I believe most people agree that you need to wait until more information is known. That is why it is so dangerous to call a lawsuit frivolous without knowing more. Does anyone believe that there should be a limit on how much can be recovered by Hanks if, in fact, a mistake is shown to have been made? Or is it more prudent to wait until all of the evidence is in before making such a determination?
Seems to me to be a little far fetched for an agent to be able to over charge for hundreds of thousands of dollars or millions. I would think that it is reasonable to think that the Hanks family has a business manager who would have overseen the policies/premiums and the interests of the Hanks in this matter.
You would think that the Hanks would have been insured with a large broker with an impecable reputation instead of a small retail agent off of sunset strip in Hollywood.
I guess thats why they call this part of the lawsuit “discovery” could be just an agent who really disturbed his prospect to the point of a frenzy. It would be funny if they found out the prior agent had him insured correctly. LOL…. But the jury is still out on this one. I do not think anyone can come to a conclusion with the information in the article.
Duplication of coverages does not constitute fraud unless it was a willful act by the broker. If there truly was duplicate policies covering the same property and or liability exposures and no losses were incurred, I believe the insurance company/companies will be forced to refund premium. Alas, the broker will probably only see commission chargebacks and defense costs.
I would be hard pressed to see how the carriers can or even should be forced to return the premium. Loss or no loss they were on the risk and provided coverage. If there had been a loss each carrier would be legally liable for their portion of the loss (property or casualty) based on how their coverage relates to the total coverage written. A carrier may elect to cancel the policies based on their relationship with the broker, but forced to retroactively cancel, I think not.
One exception might be the wind or flood carriers. I’ve taken over a program with duplications of coverage spanning several years and successfully helped the client recoup those costs.
BTW, it wasn’t any one broker’s fault for the duplications. Because they had holdings in several states, they hired several brokers. Once I earned the whole account and reviewed every policy & exposure; we reduced current costs by $20,000 and recouped large sums for wind and flood duplications.
Again, important to have whole program reviewed by one person or one team with a critical eye for duplications as well as gaps. And don’t assume every state treats recreational vehicles alike. For example; the last time I checked Wisconsin had three levels of requirements for snowmobile registrations. Not getting that snowmobile listed correctly on the excess might be your undoing.
Chances are they are just suing for overpaid premiums. In that case they are absolutely right to be reimbursed. It sounds like a simple fact of maybe the agent growing too big to give personal service. A professional should do periodic reviews and make every attempt to update records as often as needed. I see it all the time with a client with two cars, home and umbrella…to major corporations. Remember also that some clients may not allow periodic reviews or meetings as needed?
Insurance has always been a competitive environment, so all that are pointing fingers at new agent are in a different world than I have been for 20 years. If the prior broker had a “relationship” with the client (which may have had after 20 years), AND used all that commission earned to “properly” service the account, the new agent would not have had an opportunity to win the business nor find fault in the program. The new agent brings a good name to the industry by advising Hanks properly and acutally caring for their clients.
I mostly agree with Mark; with one exception. Even with a strong relationship a broker can lose the business. Stuff happens beyond your control.
The Risk Manager or the Board may decide they do not want all the eggs in one basket. Why? Who knows? Generally, an insurance firm has one broker on the commercial and another on the personal and they may not even be utilizing the same carrier; but it still happens.
Or their commercial entity may have gone public and now that their publicly traded CPAs may want some distance between the commercial & personal insurance.
Or a new decision maker may already have a strong relationship with another broker. Stuff happens.
It’s not pleasant; but you can’t lose sleep over it. Part on good terms and make it easy for them to come back. Afterall, they may find the new broker can’t fill your shoes/high heels. :)
Thanks, I am not saying a relationship can always keep the client…of course there are many situtations that can come up. What I mean by relationship is this. If Hank’s were my clients I would know more about their insurance than they do, business manager or whoever. So I would take personal responsibility, be organized, and they would put their trust in that I have them properly covered…as all my clients do and should. They make movies, we do insurance. They are awesome at what they do and deserve the same from their agent. When we make mistakes, which happens, that’s why we have EO. I checked the wrong box on a group health app once and payed the groups co-pays for entire year out of my pocket to keep from filing only EO claim in 20 years, so things happen…take responsibility!
You are an insurance professional! I am quite amazed at the commentary here and how many people are trying to blame the insured or their manager or make excuses for the first agent or malign the new guy. Wow, whatever happened to accepting responsibility for the job you do.
Not one of us are perfect and there have been enough instance in my 25 years that I have missed something, but not for lack of caring or trying.
I agree with Mainemiss. 35 years ago I remember listening to the “Insurance Powerhouses” of the 1960’s and 1970’s.
If our own industry wasn’t going to step up and be responsible for our actions, one day the government would step in and do it for us through regulation. This is exactly what has happened.
The Hanks lawsuit once again is an example of this. As mainemiss states, we all make mistakes. We are licensed insurance professionals and should have the integrity to not over charge, or write duplicate policies.
I still find it difficult to believe that a license insurance agent,or another staff member within the firm, would not have become aware of this mistake somewhere along the way.
Do we all really believe that the agent was the only person involved in the servicing of the Hanks account and no one in the agency thought something was amiss?
It’s only going to get worse with the environment being created by the drive-through window insurance companies such as “Government Employees” and Progressive who teach the public that buying insurance is all about the price.
And, who cares if State Farm insures 40 million drivers? Every day McDonald’s sell millions of mediocre hamburgers – they’re fast, they’re inexpensive, but ay least those who are buying them know that they are also not filet mignon being served on fine china. We can’t say that about the majority of fast-food insurance like name-your-own-price-insurance from Progressive, or even the “Big Boy” sit-down slop peddled by the nincompoops employed by the big name captives.
I often find that an independent insurance agent (broker) can offer better overall service for a HNW client than a direct writer. J B Goldman is an American Family agency.
Sounds like Tom and Rita don’t have the financial smarts to do the big (money) business deals and this company saw that and took advantage of them. In the end Tom and Rita have no one to blame but themselves. Stupid is as stupid does!
That is unfair and unkind. Most people haven’t a clue what they are insured for and the more they have to insure the more confusing. Most people have a life beyond their insurance policies…and they place their trust in the agent they select…their former agent should be tarred and feathered by the rest of us for giving the majority of us a bad name.
Gee, talk about unfair. A competitor broker makes an allegation against another broker and you’re ready to tar and feather the guy. Gee, one agent would never talk bad about another agent just to make themselves look good or to obtain the business.
If that’s how you think the business is played you are in the minority…Good luck!
What’s happened to the good ole days when Agents/Brokers were “friendly” competitors? Big Corporate has made our industry such a “Dog-Eat-Dog” environment. It’s very sad.
If most people don’t know what they’re insured for, it’s their own fault. It’s called reading the policy and asking questions.
More than likely the new broker has an ax to grind with the old broker and they’re nit pickin’ at stuff. Example: Home insurance has a liability line at say 1,000,000. The Personal Excess Lia (Umbrella) at 10 million only needed 500,000 as an underlying limit but it was set a 1 mil. Yea, the new broker could say, see, you were paying for 500,000 more on the homeowners than you needed for the Umbrella. Overlapping life coverage, auto, scheduled PP, On, and On and On. There is much more to this story than this limited article gives us. These brokers dealing with the wealthy in the same town are brutal and carniverous.
I find it very difficult to believe that their business manager did not oversee their insurance program.
I agree. Their attorney should start by asking questions about the request to bind coverage and follow the trail. Most likely, as you mentioned, it will lead back to their business manager. I doubt the broker was binding coverage without a request…
How many business managers really understand the insurance industry and the nuances of coverage? Obviously they had a long term relationship with their broker and they trusted this individual.
If the allegations are correct what decent insurance agency or brokerage firm is going to issue multiple policies for one risk? That’s just sloppy work.
I AM NOT SURPRISED AT ALL. THE CORRUPTION I HAVE SEEN IN THIS BUSINESS OVER THE LAST FEW YEARS IS OVERWHELMING. THIS IS NOT THE SAME INDUSTRY I HAVE WORKED IN FOR THE LAST 30 YEARS.OLD SCHOOL ETHICS IS LEFT TO THE OLD SCHOOL, IT IS NOT AS PREVELANT IN THE INDUSTRY AS IT ONCE MIGHT HAVE BEEN.SOME OF US ARE A DYING BREED, BUT WE SLEEP AT NIGHT.
Norm, interesting comments. I have been in the multiline insurance agency business for over 40 years and I certainly am not aware of any corruption at all, let alone a increase as you seem to be alluding to.
Most agencies and insurance companies still handle their business on a very high ethical level and insureds are well taken care.
Norm on the surface I cannot agree with you more. However, I believe it’s a combination of unethical behavior, a lack of training and a serious lack of valuable insurance education.
As we all know, not every agency or agent is created equal and if the allegations are true, the incumbent agent should be tarred, feathered, and their photo should be posted on the internet.
Guess Tom Hanks and his wife are too stupid to read the policies sent to them by the various companies. They apparently didn’t pick-up the phone and ask questions.
Don’t they pay people to read these things for them??
Guess the new broker will one day be sued for negligence when Forrest Gump realizes they are now under-insured and don’t have more than a single policy (it’s called excess coverage) to insure them in the event of a claim.
That is no surprise. When a man is not in charge of his affairs, this often happens. I found a fleet of vehicles, I thought, owned by a dude ranch. When I visited the ranch and asked to see the vehicles, I discovered there were three, not 23. Each time a vehicle was purchased, the home office (40 miles away) added the new vehicle to the policy. None were ever removed. The broker was one of the big 4.
I questioned why an oil company needed a liquor liability policy. My inspector brought me a photo of an abandoned sign in a desert strip mall. For ten years, the big broker had carried a liquor liability on the sign. The liquor store was long gone and a landramat had replaced it many years ago.
When no one is really in charge, this is a common occurrence. Paid business managers often pay little attention to details. Most have very limited insurance knowledge. Some even use the insurance to buy favors. The more complex and the larger the account, the more things fall through the cracks. One person pays the bills, another does the ordering. They do not communicate well. Duplicate policies often result: the old policy is renewed and the buyer orders coverage from another broker, thinking the original policy would just lapse. instead, both were paid.
Sophisticated insureds work WITH their brokers to make sure they have the big picture and know where to go to get the details. When the brokerage is fragmented, with different people handling different aspects of the account, no one is coordinating, and no one gets the over-all picture.
Often it is a case of having too many, or no, cooks in the kitchen!
It’s like “my people will call your people” and guess what, no one calls anyone… AHHH the problems of Champagne and caviar dreams!!!!
Maybe there is a real case here and someone was negligent – and I guess the lawsuit will flesh that out. I just hope that this is a big lesson to some brokers out there — when you’re talking to an insured about how the other guy doesn’t know what he or she is doing and how much better of a job you’re going to do – this is going to happen. The problem (if you want to call it) is that while our industry has some finite parameters, there is a whole lot of “art” involved in insurance and the best way to buy coverage for the many different exposures. The allegation that the Hanks’ paid too much for insurance — well, I guess all institutions could sue based upon what they paid 5 or 6 years ago and what is available today, right? This is a very slippery slope and the broker who is helping the Hanks’ now, may be on the other end later. The moral: BE CAREFUL WHAT YOU ACCUSE OTHERS OF!
Surely this is frivolous, right Proud Conservative? Those folks should have looked out for themselves and not be looking to blame an insurance broker looking to maximize profits.
Actually, Tom Hanks is a very proud liberal. What does that have to do with anything (aside from that most liberals want others to pay for everything they desire)?
@Norm Re: Ethics of the past
If you have seen the film of the Tacoma Narrows bridge waving around and collapsing in the ’30s. You also saw a broker scam. The bridge district ordered an All Risk policy on the bridge for something like $1.1 mil in coverage thru a local agent. The agent allegedly ordered a $100,000 policy from United Pacific (now long gone) and when it came in somehow another “1” was typed in front of both the amount of coverage and the premium. What can happen to a bridge? Harmonic vibration. Told to me by UP’s local mgr. back in the ’70s.
I’d love to know how many times a diligent, enterprising agent contacted Hanks or “his people” to review and bid their business and were told “No; we’re happy with what we have”, or “We already do all our business with (Mamma/Brother-in-law/college buddy/the production company/…)”.
Just commenting on more frivolous lawsuits being filed…I mean surely this is frivolous, isn’t it? If not, then what is?
When is a serious error or possible insurance fraud by an insurance agent or broker frivolous? Should the insurance broker be held accountable for their action or inaction? Isn’t this what Insurance Agents/Broker E&O is all about? In my state the insurance department would consider this unethical even if it is found not to be illegal. Tom Hanks is an actor not an insurance agent, broker or risk manager. Tom Hanks like other insurance consumers rely on the professional expertise of their insurance agent, broker or risk manager.
We’ll never know enough to judge if the suit is frivolous or not. The courts will do their job. When you take on HNW complex personal programs with national and international holdings there are a lot of moving parts. Some of them can cross from personal to commercial. You’re usually working in the admitted and excess markets. Each state has their own insurance idiocies; some states require WC on home policies, others require stand alone policies. Wind coverage on the east coast is one thing; earthquake on the west is another. Challenges abound. You need to bring HNW experience and your “A” game every day. I can’t stress enough how important it is to have one person or one team reviewing all policies with a critical eye for overlapping coverage in the contracts.
Clients of this nature lead extremely busy lives. Imagine how much paperwork you have dealing with one or two homes, your cars etc. Now multiply that by eight or ten multi-million dollar homes, ten or fifteen cars, and all the recreational items. In addition to the insurance paperwork, you’ve got taxes, registrations, and emissions compliance issues. The list never ends. Naturally, you’ll have trusted advisors working for you.
Before you start with the envious reactions, stop and think about what else these clients do. Commercially; they’re responsible for empires in their chosen fields. Personally; they’re responsible for tremendous estates — from what I am privileged to see they employ great numbers of personal staff and trusted advisors; they donate to many wonderful institutions and charities. They buy and preserve art for future generations. They save historical treasures. They promote art opportunities in schools and communities. Much of this they do in complete anonymity because there are organizations ready to exploit any bit of news they garner.
HNW clients pay for and deserve the same competence and diligence we all want when we hire a broker to manage our insurance interests. My point is if you’re going to have a career in this environment make sure you have the experience and resources to do the job right. And don’t be afraid to fire the client. If you aren’t afforded the opportunity to meet with decision makers, you can’t do the job right. Part ways and use your skills for a client who values what you bring to the relationship as a professional insurance advisor.
Live and work well.
So far it appears to be just an accusation against a Brokerage with a long standing very fine reputation -how many clients have we all encountered that simply do not “understand” insurance or just what the premiums actually pay for. How often have we heard, “well, how much coverage do you (agent) think we should be placing on buildings xyz” – I love it when the consumer puts the burden on their agents for reasons of their own omissions and often laziness, even when it comes to the values of their own property and then, when something goes sideways decides to go after the agency to collect – welcome to the world of E&O’s claims – I look forward to the verdict for this one…
Why can’t I pull up page 2? “Next” & “2” dosent work for me.
Little Frog, I thought it was just me, I can’t get to page 2 by using next or page either.
It will be interesting if it is actually an error of ‘items’ covered or a situation of the interpretation of the coverage provided by the carrier. Like to know that first before I pass judgement on the original broker.
What concerns me greatly is the large number of comments trying to explain away the “charges” against the first broker and make the new one the bad guy. Sounds like alot of people identifying with the original agent.
Consider…for 20 years an insured has entrusted his insurance packaqe to one agent. Do you really think that a new agent walking through the door making allegations against the incumbant’s ability and honesty would result in the incumbant being fired and sued? Truth is that the new agent may have simply provided a thorough analysis and current market proposal and the savings was so great that someone noticed.
Do you think a lawyer was dumb enough to file a high profile suit based on allegations alone?
Um, are you really that naive? “Do you think a lawyer is dumb enough to file a high profile suit based on allegations alone?” That is pretty laughable. The answer is “YES!”
I guess only time will tell won’t it Elizabeth…..
There is just too little information for me to come to a conclusion if there was something wrong here. My question is this real property being insured multiple times (homeowners, earthquake, flood, and wind storm) all provide building coverage for the same property but cover different pearls. There is just too little information to make a decision.
I believe most people agree that you need to wait until more information is known. That is why it is so dangerous to call a lawsuit frivolous without knowing more. Does anyone believe that there should be a limit on how much can be recovered by Hanks if, in fact, a mistake is shown to have been made? Or is it more prudent to wait until all of the evidence is in before making such a determination?
Seems to me to be a little far fetched for an agent to be able to over charge for hundreds of thousands of dollars or millions. I would think that it is reasonable to think that the Hanks family has a business manager who would have overseen the policies/premiums and the interests of the Hanks in this matter.
You would think that the Hanks would have been insured with a large broker with an impecable reputation instead of a small retail agent off of sunset strip in Hollywood.
I guess thats why they call this part of the lawsuit “discovery” could be just an agent who really disturbed his prospect to the point of a frenzy. It would be funny if they found out the prior agent had him insured correctly. LOL…. But the jury is still out on this one. I do not think anyone can come to a conclusion with the information in the article.
Surely, a knowledgeable, wealthy, well-known celebrity would not put his or her complete trust in ANYONE for 20 years without some investigation.
LMAO !!
Duplication of coverages does not constitute fraud unless it was a willful act by the broker. If there truly was duplicate policies covering the same property and or liability exposures and no losses were incurred, I believe the insurance company/companies will be forced to refund premium. Alas, the broker will probably only see commission chargebacks and defense costs.
I would be hard pressed to see how the carriers can or even should be forced to return the premium. Loss or no loss they were on the risk and provided coverage. If there had been a loss each carrier would be legally liable for their portion of the loss (property or casualty) based on how their coverage relates to the total coverage written. A carrier may elect to cancel the policies based on their relationship with the broker, but forced to retroactively cancel, I think not.
One exception might be the wind or flood carriers. I’ve taken over a program with duplications of coverage spanning several years and successfully helped the client recoup those costs.
BTW, it wasn’t any one broker’s fault for the duplications. Because they had holdings in several states, they hired several brokers. Once I earned the whole account and reviewed every policy & exposure; we reduced current costs by $20,000 and recouped large sums for wind and flood duplications.
Again, important to have whole program reviewed by one person or one team with a critical eye for duplications as well as gaps. And don’t assume every state treats recreational vehicles alike. For example; the last time I checked Wisconsin had three levels of requirements for snowmobile registrations. Not getting that snowmobile listed correctly on the excess might be your undoing.
Live and work well.
WITH ALL THAT DUPLICATION OF COVERAGE WOULD THAT CAUSE THEIR CREDIT RATEING TO DROP AND EFFECT WHAT THEY PAY FOR THEIR AUTO INSURANCE ??? HA! HA!
Chances are they are just suing for overpaid premiums. In that case they are absolutely right to be reimbursed. It sounds like a simple fact of maybe the agent growing too big to give personal service. A professional should do periodic reviews and make every attempt to update records as often as needed. I see it all the time with a client with two cars, home and umbrella…to major corporations. Remember also that some clients may not allow periodic reviews or meetings as needed?
Insurance has always been a competitive environment, so all that are pointing fingers at new agent are in a different world than I have been for 20 years. If the prior broker had a “relationship” with the client (which may have had after 20 years), AND used all that commission earned to “properly” service the account, the new agent would not have had an opportunity to win the business nor find fault in the program. The new agent brings a good name to the industry by advising Hanks properly and acutally caring for their clients.
I mostly agree with Mark; with one exception. Even with a strong relationship a broker can lose the business. Stuff happens beyond your control.
The Risk Manager or the Board may decide they do not want all the eggs in one basket. Why? Who knows? Generally, an insurance firm has one broker on the commercial and another on the personal and they may not even be utilizing the same carrier; but it still happens.
Or their commercial entity may have gone public and now that their publicly traded CPAs may want some distance between the commercial & personal insurance.
Or a new decision maker may already have a strong relationship with another broker. Stuff happens.
It’s not pleasant; but you can’t lose sleep over it. Part on good terms and make it easy for them to come back. Afterall, they may find the new broker can’t fill your shoes/high heels. :)
Live and work well.
Thanks, I am not saying a relationship can always keep the client…of course there are many situtations that can come up. What I mean by relationship is this. If Hank’s were my clients I would know more about their insurance than they do, business manager or whoever. So I would take personal responsibility, be organized, and they would put their trust in that I have them properly covered…as all my clients do and should. They make movies, we do insurance. They are awesome at what they do and deserve the same from their agent. When we make mistakes, which happens, that’s why we have EO. I checked the wrong box on a group health app once and payed the groups co-pays for entire year out of my pocket to keep from filing only EO claim in 20 years, so things happen…take responsibility!
Mark,
You are an insurance professional! I am quite amazed at the commentary here and how many people are trying to blame the insured or their manager or make excuses for the first agent or malign the new guy. Wow, whatever happened to accepting responsibility for the job you do.
Not one of us are perfect and there have been enough instance in my 25 years that I have missed something, but not for lack of caring or trying.
I agree with Mainemiss. 35 years ago I remember listening to the “Insurance Powerhouses” of the 1960’s and 1970’s.
If our own industry wasn’t going to step up and be responsible for our actions, one day the government would step in and do it for us through regulation. This is exactly what has happened.
The Hanks lawsuit once again is an example of this. As mainemiss states, we all make mistakes. We are licensed insurance professionals and should have the integrity to not over charge, or write duplicate policies.
I still find it difficult to believe that a license insurance agent,or another staff member within the firm, would not have become aware of this mistake somewhere along the way.
Do we all really believe that the agent was the only person involved in the servicing of the Hanks account and no one in the agency thought something was amiss?
It’s only going to get worse with the environment being created by the drive-through window insurance companies such as “Government Employees” and Progressive who teach the public that buying insurance is all about the price.
And, who cares if State Farm insures 40 million drivers? Every day McDonald’s sell millions of mediocre hamburgers – they’re fast, they’re inexpensive, but ay least those who are buying them know that they are also not filet mignon being served on fine china. We can’t say that about the majority of fast-food insurance like name-your-own-price-insurance from Progressive, or even the “Big Boy” sit-down slop peddled by the nincompoops employed by the big name captives.
I often find that an independent insurance agent (broker) can offer better overall service for a HNW client than a direct writer. J B Goldman is an American Family agency.
Why do brokers allow underwriters to do this? Was JB Goldman also the broker.