Insurance Agent Negligence and Misrepresentation: What Victims Can Do

At The Fell Law Firm, we often talk with clients who were harmed by insurance agent malpractice. They trusted their insurance agents to give them the right information with coverage that protected their families and property. Unfortunately, when a loss occurred and they needed to use their insurance policies, many discovered that the trust they put in their agents had been misplaced.
This can be frustrating and disheartening, but it doesn’t mean that you don’t have options. If your insurance agent failed to get you the coverage you need, you can file a lawsuit against the insurance agent, asking the court to order the compensation you should have received from the insurance company.
For example, if fire damage to your house was not covered because your insurance agent forgot to purchase the policy, you can turn to the courts for justice. A court may determine that the damages in the case equal the amount the insurance company should have paid for the repair of fire damage.

What Is Negligence?

Texas courts have held that insurance agents owe their clients a duty to take certain actions. When they breach this duty by failing to do things they should—like obtaining the coverage they promised or telling you when a policy isn’t renewed—they fail their clients. Courts look to see if that failure caused the client any damage. If so, courts may hold the insurance agent liable for negligence.

Examples of Insurance Agents Acting Negligently

There are many things that insurance agents can do to act negligently. Here are some examples:

Misrepresenting insurance coverage: When an insurance agent misrepresents an insurance policy as covering things that it really does not or providing more financial protection than it really does, the agent is acting negligently.
Failing to get insurance coverage for you: Insurance agents who fail to procure the insurance for clients, as promised, are also negligent. In cases like these, the person thinks they have insurance. However, their insurance agent has not secured the coverage, and the person is actually not covered. If your insurance agent was unable to get insurance coverage for you, they have the duty to tell you right away.
Obtaining inadequate coverage: An insurance agent who promises you a certain level of coverage has a duty to obtain that level of coverage for you. If they promise you a high level of coverage, but then put you in a policy with a lower level of coverage, they are acting negligently.
Failure to maintain your coverage: In a notable court case, an insurance agent failed to notify his clients that their insurance coverage had not been renewed. The letter from the insurance company came to the insurance agent, but the insurance agent never told the policyholders. They thought they were insured, but they were not.
Connecting you with an insolvent insurer: An insurance agent has the duty to investigate an insurance company’s financial status. If they sell you a policy from an insurance company that is insolvent and does not have the money to pay out on a claim, the insurance agent may be held liable for negligence.

If You Think Your Insurance Agent Acted Negligently

If you think your insurance agent acted negligently in any way, talking with a lawyer is a good idea. The attorneys at The Fell Law Firm can help. To talk with a lawyer, call 972-450-1418. We offer free and confidential consultations.