This is a terrible decision. What is an agent supposed to do – video tape the declination as well to show they didn’t want the coverage. Agents should just refuse to write a personal auto unless the insured is willing to pay for UM/UIM coverage at the same limit as the BI
Agree. Very bad decision. The agent is representing the insurer in the application process. How a bout a little responsibility on the part of the applicant for reading and understanding what she was signing?
Sounds like the healthcare law all over again. So in regards to the Obamacare, State also means Federal for subsidies. But in regards to UM/UIM Insurer does not mean Agent as well? Interesting on how one was interpreted to mean both as it appears the Insurer one also means both, but not to the court.
Retired, I have had this conversation with many customers I have written. We always propose U/M/UIM. If the customer objects to the small additional premium, I usually send them down the street. It isn’t worth it to have an E&O claim when someone says they didn’t understand what they were signing. I have seen several from Allstate & Farmers Group show up and when I point out they don’t have the coverage, they are usually shocked and said their agent told them they were covered. They then thank me and buy my coverage. We also don’t write minimum limits. That is also asking for trouble.
Agent, your attitude and your performance identify you as a PROFESSIONAL agent. Continue your direction to decline minimum premium seekers, and ALWAYS match UM/UIM to the BI limits and you have an outstanding chance at avoiding an E/O claim. Our agency sees a lot of clients that bring their DEC sheets and we point out the absence of UM/UIM and they are shocked as well. We look at it as the mark of an UN-PROFESSIONAL agent who is trying to save 15% in 15 minutes or less. Take confidence that you are doing it right, and always sell coverage not price. You will have a prosperous career.
Thank you for the kind words Appeal. Some on this blog love to attack me on any subject on any article, try to hide my posts because they don’t like my Conservative message and they literally have no Common Sense whatsoever. They are also not in the consumer market dealing direct with customers so they have no idea what it is like. Thank you and I have had a prosperous career and have yet to be sued because we do it right.
Complete BS. The key phrase in the article was (and I paraphrase) that “they wanted a lower premium”. So the agent does his due diligence, finds a policy without UM/UIM coverage, and the claimants accept it by signing the waiver with a clear, documented understanding that they are in fact getting less coverage because they wanted a lower premium. And between the husband and wife, I’m assuming they have four eyeballs as well as at least an elementary background in reading comprehension.
So how is that anyone’s fault but their own? I suppose the agent could have advised them against going bare, and maybe he did over the phone, but this is just a mess.
AZ needs to change this ridiculous legislation and make the insureds pay for the agent’s legal fees.
Hmmm. You guys would like to believe that (1) person selling insurance to consumer has no (legal or) ethical obligation to inform them about choices available and consequences of those choices; (2) that handing buyer a stack of papers to sign is equivalent to “informing” them of the content; (3) that calling yourself an “agent” shields you from any duty to consumer. Mr./Ms. Agent (with whom I generally disagree about virtually everything) at least demonstrates some exemplary professionalism here. Otherwise – these responses explain why the insurance industry – and “insurance agents” in particular are held in such low regard by the public.
Nice straw man, mr_risk. Unfortunately, you can’t paint all agents with the same broad brush strokes. There are indeed volume-writing non-standard auto agents that treat auto insurance like it’s a retail product (or worse, fast food), but there are also a great many professional multi-line agents that do explain coverages, deductibles and exclusions.
My career has been spent on the company side, but the majority of agents I’ve met are not as you describe, and many have developed their own agency coverage/limits/deductible selection/rejection forms to better shield themselves from this very issue.
Since when does the presence of a signed and state-designed UM rejection form mean exactly the opposite, and that UM coverage actually exists in this case? The plaintiffs were legally adults and under law should have been held accountable for signing the coverage contract.
But no, not under the noses of an insulated legal clique (AZ supreme court), who chose to throw common sense, years of boilerplate legal precedent and individual accountability under the bus.
Count this as yet another senseless court decision descending us headlong down the slippery slope of the United States of Victimhood.
This is why my P&C office will never under any circumstance write auto policies for less than 100/300 and always include UM (non-negotiable). I have also found over the years that this is a very clever way of keeping less desirable clients away.
You are right Mel. Actually, there is coverage for U/M/UIM for an agent not selling the coverage. It is found in the E&O of the agency. That is not where I want the coverage to be so we make sure we sell proper limits and document our files.
by definition an agent is “representative” of the company. Is the AZ supreme court saying the company is in fact still liable as a result. If it was a broker it would be one thing but when it is an agent they are effectively acting on behalf of the “protected” company in selling the insurance.
I feel deeply for insureds who lose out. But seriously there should be some onous of the insureds to act appropriately too.
Mr. Lundberry. I could not agree more! An agent is a representative if the company and should be covered under the ruling. A broker works for the insured and an agent works for the company, technically.
As an underwriter, my fiduciary responsibility is to the company as is the agent’s. If the client was advised and signed a paper stating so, other than purchasing the coverage for them with your own money, what else can an agent do? An agent is no different than the company.
Why is it that the client is never wrong especially when they are looking to save money?
“Among the numerous forms for a new policy that required Wilks’ signature, she signed the waiver form to reject UIM coverage, which had been filled out by Manobianco, court documents state.”
I work in a State Farm office myself and let me define “numerous” in the above statement: the maximum possible number of forms that require a signature when writing a new policy are TWO. Form 1) required only when setting up a recurring monthly payment to allow monthly access to your funds. Form 2) selection/rejection form for uninsured and underinsured motorist coverage.
The fact that State Farm’s attornies, which are not cheap, were unable to overcome that argument speaks to the lack of common sense being applied in this ruling. This is bad for insurance agents. My office, as a result of this ruling, has decided to stop writing policies without UIM regardless of customer request. For those insisting, we will direct them to contact a state legislator.
When I was a company special agent (field rep), there were numerous times when an agent would plead with me to offer a quote on a commercial risk. A risk that was a claim waiting to happen.
I always told the agent, “never let the perfume of the premium (commission) overcome the stench of the risk”.
When the agent ignored my advice and placed the risk with another carrier, and the problems started, I had no problem saying, “told you so.”
The E&O policy that covers State Farm agents has an exclusion the majority of agents do not know exists. That exclusion applies to all products that belong to State Farm exclusively. That includes all auto insurance, fire insurance, commercial, life, and their own heath products. It only covers the agents notary and products sold through other companies. I notice it says State Farm is not involved in this case and I wonder what protection, if any, the agent had under his E&O.
Mark, if what you say is true about State Farm’s E&O, I think the agents are in for big trouble in this lawsuit happy society. Captives are a different breed and I have a hard time believing they will leave their agents hung out to dry in this type of situation.
This should be appealed to the U.S. Supreme Court. I do not doubt that the agent pushed this policy with less coverage knowing that was the easiest way to make a commission and or meet State Farm’s production requirements. This is a common tactic by some captive agents as they deal with their companies overpriced products. The clients also have a responsibility to question what they are signing and buying. Only choice now is for all agents to sell um & uim with matching limits. Why has this not had more publicity on this?
If the client had UIM on her previous policy and the new agent sold a policy that did not include it then the agent is at fault and the court’s ruling is on point. Additionally, agents need to be wary of those clients who want to exclude important coverage(s) to save on their premium. These are the type of clients that are more likely to sue when there is an accident. Personally, I do not write policies that exclude UM and UIM and if a client requests this I will tell them to remain with their current agent or find another agent who will do this for them. This case is certainly a wake up call for us agents and should cause us to spend more time explaining the various aspects of the policies we sell to our clients. We should go beyond replacing the coverage in place with similar coverage and instead point out deficiencies in the potential client’s current policy and recommend the necessary coverage improvements. That is what professional agents should do and clients have a right to expect this from their agents.
No agent should ever write a policy without uninsured or underinsured motorist coverage. If the cleint does not want it, let them go somewhere else. This is always a lawsuit waiting to happen. Let it happen to the Progressive’s , GEICO’s and Einsurance carriers and the other guy. Lawsuits are happening in most states involving this coverage. Clients do not understnad this covergae and neither do most agents. Clients just sign forms put infornt of them. I hear all hte time the other agent siad i did need this covergae or I only needed state limits.
That’s not a good thought process to take since next will be you didn’t offer disability or life or umbrella, etc or the limits weren’t high enough and the sign off form isn’t enough. This ruling as it stands could open the flood gates to what the standard of care truly is for an agent. We are not a Arizona based agency, but we write coverage there for our clients who have homes, autos, business there even thought they may or may not be primary residents of Arizona since our snow birds fly that way. We are looking at suspending doing business in Arizona depending on the outcome of this case, since our state has no standard of care. Its all up to the client. we get the forms signed as the carriers require it in most cases, but its not state law. So this will be interesting to see what happens and if it leads to other state supreme courts writing laws instead of interpreting the law as it was ment to be written. I apologize for any typos as I am on a cell phone.
I think we are missing the real problem here: it’s not just about UIM. What if someone chooses lower liability limits or a higher deductible- – and they sign off on it? Why should the agent be held accountable when the insured has the loss and comes forward looking for compensation for their miserly decisions?
I think most agents have clients they wish they hadn’t written for one reason or another. We bought an agency and inherited customers with issues on coverage. We try to counsel and quote better limits and coverage to these inherited accounts and have brought most of them on board and the ones we cannot, we document our files on rejections. That is about all we can do. So far, so good and we have not been sued.
Google the Supreme Court hearing and listen to the arguments. You better call your E & O carrier and try to understand your coverage. They have opened a can of worms.
This law needs to be changed because the insured is offered coverage and chooses to reduce it or eliminate it is not the agents fault. Why does everybody think they understand auto insurance until they have an accident? Then they plead ignorance.
This is a terrible decision. What is an agent supposed to do – video tape the declination as well to show they didn’t want the coverage. Agents should just refuse to write a personal auto unless the insured is willing to pay for UM/UIM coverage at the same limit as the BI
Agree. Very bad decision. The agent is representing the insurer in the application process. How a bout a little responsibility on the part of the applicant for reading and understanding what she was signing?
Sounds like the healthcare law all over again. So in regards to the Obamacare, State also means Federal for subsidies. But in regards to UM/UIM Insurer does not mean Agent as well? Interesting on how one was interpreted to mean both as it appears the Insurer one also means both, but not to the court.
So, in Arizona, one can plead ignorance when making a claim for non-existent coverage, and be rewarded for doing so…
Retired, I have had this conversation with many customers I have written. We always propose U/M/UIM. If the customer objects to the small additional premium, I usually send them down the street. It isn’t worth it to have an E&O claim when someone says they didn’t understand what they were signing. I have seen several from Allstate & Farmers Group show up and when I point out they don’t have the coverage, they are usually shocked and said their agent told them they were covered. They then thank me and buy my coverage. We also don’t write minimum limits. That is also asking for trouble.
Agent, your attitude and your performance identify you as a PROFESSIONAL agent. Continue your direction to decline minimum premium seekers, and ALWAYS match UM/UIM to the BI limits and you have an outstanding chance at avoiding an E/O claim. Our agency sees a lot of clients that bring their DEC sheets and we point out the absence of UM/UIM and they are shocked as well. We look at it as the mark of an UN-PROFESSIONAL agent who is trying to save 15% in 15 minutes or less. Take confidence that you are doing it right, and always sell coverage not price. You will have a prosperous career.
Thank you for the kind words Appeal. Some on this blog love to attack me on any subject on any article, try to hide my posts because they don’t like my Conservative message and they literally have no Common Sense whatsoever. They are also not in the consumer market dealing direct with customers so they have no idea what it is like. Thank you and I have had a prosperous career and have yet to be sued because we do it right.
Complete BS. The key phrase in the article was (and I paraphrase) that “they wanted a lower premium”. So the agent does his due diligence, finds a policy without UM/UIM coverage, and the claimants accept it by signing the waiver with a clear, documented understanding that they are in fact getting less coverage because they wanted a lower premium. And between the husband and wife, I’m assuming they have four eyeballs as well as at least an elementary background in reading comprehension.
So how is that anyone’s fault but their own? I suppose the agent could have advised them against going bare, and maybe he did over the phone, but this is just a mess.
AZ needs to change this ridiculous legislation and make the insureds pay for the agent’s legal fees.
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Nice straw man, mr_risk. Unfortunately, you can’t paint all agents with the same broad brush strokes. There are indeed volume-writing non-standard auto agents that treat auto insurance like it’s a retail product (or worse, fast food), but there are also a great many professional multi-line agents that do explain coverages, deductibles and exclusions.
My career has been spent on the company side, but the majority of agents I’ve met are not as you describe, and many have developed their own agency coverage/limits/deductible selection/rejection forms to better shield themselves from this very issue.
Exactly.
Since when does the presence of a signed and state-designed UM rejection form mean exactly the opposite, and that UM coverage actually exists in this case? The plaintiffs were legally adults and under law should have been held accountable for signing the coverage contract.
But no, not under the noses of an insulated legal clique (AZ supreme court), who chose to throw common sense, years of boilerplate legal precedent and individual accountability under the bus.
Count this as yet another senseless court decision descending us headlong down the slippery slope of the United States of Victimhood.
This is why my P&C office will never under any circumstance write auto policies for less than 100/300 and always include UM (non-negotiable). I have also found over the years that this is a very clever way of keeping less desirable clients away.
You are right Mel. Actually, there is coverage for U/M/UIM for an agent not selling the coverage. It is found in the E&O of the agency. That is not where I want the coverage to be so we make sure we sell proper limits and document our files.
by definition an agent is “representative” of the company. Is the AZ supreme court saying the company is in fact still liable as a result. If it was a broker it would be one thing but when it is an agent they are effectively acting on behalf of the “protected” company in selling the insurance.
I feel deeply for insureds who lose out. But seriously there should be some onous of the insureds to act appropriately too.
Mr. Lundberry. I could not agree more! An agent is a representative if the company and should be covered under the ruling. A broker works for the insured and an agent works for the company, technically.
As an underwriter, my fiduciary responsibility is to the company as is the agent’s. If the client was advised and signed a paper stating so, other than purchasing the coverage for them with your own money, what else can an agent do? An agent is no different than the company.
Why is it that the client is never wrong especially when they are looking to save money?
Randi, as an underwriter with fiduciary responsibility, why would you accept an agent’s application with many needed coverages omitted?
“Among the numerous forms for a new policy that required Wilks’ signature, she signed the waiver form to reject UIM coverage, which had been filled out by Manobianco, court documents state.”
I work in a State Farm office myself and let me define “numerous” in the above statement: the maximum possible number of forms that require a signature when writing a new policy are TWO. Form 1) required only when setting up a recurring monthly payment to allow monthly access to your funds. Form 2) selection/rejection form for uninsured and underinsured motorist coverage.
The fact that State Farm’s attornies, which are not cheap, were unable to overcome that argument speaks to the lack of common sense being applied in this ruling. This is bad for insurance agents. My office, as a result of this ruling, has decided to stop writing policies without UIM regardless of customer request. For those insisting, we will direct them to contact a state legislator.
When I was a company special agent (field rep), there were numerous times when an agent would plead with me to offer a quote on a commercial risk. A risk that was a claim waiting to happen.
I always told the agent, “never let the perfume of the premium (commission) overcome the stench of the risk”.
When the agent ignored my advice and placed the risk with another carrier, and the problems started, I had no problem saying, “told you so.”
The E&O policy that covers State Farm agents has an exclusion the majority of agents do not know exists. That exclusion applies to all products that belong to State Farm exclusively. That includes all auto insurance, fire insurance, commercial, life, and their own heath products. It only covers the agents notary and products sold through other companies. I notice it says State Farm is not involved in this case and I wonder what protection, if any, the agent had under his E&O.
Mark, if what you say is true about State Farm’s E&O, I think the agents are in for big trouble in this lawsuit happy society. Captives are a different breed and I have a hard time believing they will leave their agents hung out to dry in this type of situation.
I agree.
This should be appealed to the U.S. Supreme Court. I do not doubt that the agent pushed this policy with less coverage knowing that was the easiest way to make a commission and or meet State Farm’s production requirements. This is a common tactic by some captive agents as they deal with their companies overpriced products. The clients also have a responsibility to question what they are signing and buying. Only choice now is for all agents to sell um & uim with matching limits. Why has this not had more publicity on this?
If the client had UIM on her previous policy and the new agent sold a policy that did not include it then the agent is at fault and the court’s ruling is on point. Additionally, agents need to be wary of those clients who want to exclude important coverage(s) to save on their premium. These are the type of clients that are more likely to sue when there is an accident. Personally, I do not write policies that exclude UM and UIM and if a client requests this I will tell them to remain with their current agent or find another agent who will do this for them. This case is certainly a wake up call for us agents and should cause us to spend more time explaining the various aspects of the policies we sell to our clients. We should go beyond replacing the coverage in place with similar coverage and instead point out deficiencies in the potential client’s current policy and recommend the necessary coverage improvements. That is what professional agents should do and clients have a right to expect this from their agents.
No agent should ever write a policy without uninsured or underinsured motorist coverage. If the cleint does not want it, let them go somewhere else. This is always a lawsuit waiting to happen. Let it happen to the Progressive’s , GEICO’s and Einsurance carriers and the other guy. Lawsuits are happening in most states involving this coverage. Clients do not understnad this covergae and neither do most agents. Clients just sign forms put infornt of them. I hear all hte time the other agent siad i did need this covergae or I only needed state limits.
That’s not a good thought process to take since next will be you didn’t offer disability or life or umbrella, etc or the limits weren’t high enough and the sign off form isn’t enough. This ruling as it stands could open the flood gates to what the standard of care truly is for an agent. We are not a Arizona based agency, but we write coverage there for our clients who have homes, autos, business there even thought they may or may not be primary residents of Arizona since our snow birds fly that way. We are looking at suspending doing business in Arizona depending on the outcome of this case, since our state has no standard of care. Its all up to the client. we get the forms signed as the carriers require it in most cases, but its not state law. So this will be interesting to see what happens and if it leads to other state supreme courts writing laws instead of interpreting the law as it was ment to be written. I apologize for any typos as I am on a cell phone.
thanks
I think we are missing the real problem here: it’s not just about UIM. What if someone chooses lower liability limits or a higher deductible- – and they sign off on it? Why should the agent be held accountable when the insured has the loss and comes forward looking for compensation for their miserly decisions?
I think most agents have clients they wish they hadn’t written for one reason or another. We bought an agency and inherited customers with issues on coverage. We try to counsel and quote better limits and coverage to these inherited accounts and have brought most of them on board and the ones we cannot, we document our files on rejections. That is about all we can do. So far, so good and we have not been sued.
Google the Supreme Court hearing and listen to the arguments. You better call your E & O carrier and try to understand your coverage. They have opened a can of worms.
This law needs to be changed because the insured is offered coverage and chooses to reduce it or eliminate it is not the agents fault. Why does everybody think they understand auto insurance until they have an accident? Then they plead ignorance.