Potential E&O Exposure?

[RJT Consulting]

Had attended a seminar recently where the instructor got off on a tangent. He indicated that when a client requests a home/auto quote that you must present all options and allow the client to make the best decision. He said it was perfectly fine to make recommendations however you must always include all carriers that they are eligible for and not just the ones you wish to sell. Thoughts? This popped up for me recently when I requested new homeowners quotes for a recent purchase and the agency only presented but one option despite me knowing that they have preferred carriers too (they were pushing Progressive). Just curious what the consensus is.

 

[adjusterjack]

you must always include all carriers that they are eligible for

No.

The insurance buying public is clueless. You lay out an array of choices they'll be so confused that they won't know whether to s--t or go blind.

You either offer the best that you've got and educate him as to the advantages or offer two choices, one so obviously better than the other that he'd be foolish not to choose it.

If you write every policy wondering about E & O you'll make yourself crazy. You have E & O insurance so you don't have to worry about E & O.

 

[Markthebroker]

Had attended a seminar recently where the instructor got off on a tangent. He indicated that when a client requests a home/auto quote that you must present all options and allow the client to make the best decision. He said it was perfectly fine to make recommendations however you must always include all carriers that they are eligible for and not just the ones you wish to sell. Thoughts? This popped up for me recently when I requested new homeowners quotes for a recent purchase and the agency only presented but one option despite me knowing that they have preferred carriers too (they were pushing Progressive). Just curious what the consensus is.

Nope. I shop around for my clients, and get all the quotes together and offer the best one for them. It's rare for me to offer more than one option to the client, and I've never been close to an e&o issue in my 10 years.

 

[RJT Consulting]

What if what is being proposed is NOT the best option that you have but is the option you're suggesting because you want to "protect" a carrier etc? I'll use myself as the example. One of the carriers they have access to was provided to me by another agency and it was better coverage and 15% less. Yet they said that Progressive was the best option. Makes you wonder.

 

[Markthebroker]

What if what is being proposed is NOT the best option that you have but is the option you're suggesting because you want to "protect" a carrier etc? I'll use myself as the example. One of the carriers they have access to was provided to me by another agency and it was better coverage and 15% less. Yet they said that Progressive was the best option. Makes you wonder.

Based on a number of factors, the carrier with the best coverages and lowest premium isn't always what I suggest. For example I have access to a couple of different carriers that have a terrible history of paying claims, or lots of hidden exclusions that make them a terrible choice, so I only propose them if there aren't any other choices.

 

[RJT Consulting]

Not the case here. Both have stellar reputations.

 

[Markthebroker]

Not the case here. Both have stellar reputations.

That's your opinion.

I have several clients who I write with a specific carrier that I normally wouldn't recommend for a very specific reason such as billing or underwriting, or the client is looking for a very specific coverage that only one or two carriers provide.

I have a feeling you are pretty new in the business. I think this will probably make sense to you when you are at this for a bit longer.

 

[RJT Consulting]

I became a licensed agent in 1995, built and sold 4 health/p&c agencies, and now the Director of Marketing for a large work comp carrier. Auto Owners and Erie are both known for trouble free claims and extensive coverage.

 

[fed up]

I became a licensed agent in 1995, built and sold 4 health/p&c agencies, and now the Director of Marketing for a large work comp carrier. Auto Owners and Erie are both known for trouble free claims and extensive coverage.

Eire and Auto Owners are great carriers. Eire only takes the best credit scores and MVR's and will send you packing if you suffer a financial hardship or have a junior driver on the policy that gets into trouble.

 

[marindependent]

I actually do believe that to an extent that showing the client all of the information and quotes 'could' protect you. But... you know what else can protect you? Knowing the products and who has the better coverage forms and endorsements for their situation, right?

As an example does it help your client to see a group of quotes some of which contain animal exclusions and others that do not? Or an insurer that you know would not issue this policy, but their quoting system refuses to be honest?

If you provide robust offers from the best insurers that you have that are somewhat tailored to their situation you will come out ahead in the end game and as someone said, let the E&O insurance pick it up from there.

Besides, based on your name, my guess is that your bigger problem is that you are more of a consultant or specialist that just a typical agent. And this is the larger issue in the independent agency world.