If you are like most people, you have insurance. You probably bought that insurance through an agent and assume that it covers all of the risks that you need it to cover. At the very least, you might rely on your insurance agent to explain your policy to you and ensure that you are “fully covered.” Most likely, you have never read your insurance policy, or have quickly become confused at its language when you did try to read it. It’s important to understand that you may not have all of the coverage you think you have, and you typically cannot rely on your insurance agent to explain your policy to you. What you don’t know about your insurance policy could cost you thousands of dollars or more.
Insurance Companies Want to Limit Their Risk, and Insurance Agents Are Not Responsible for Explaining Your Policy to You
I’ve been practicing law for over 15 years, and a lot of my work has focused on litigating insurance disputes. Many times when a policyholder incurs a loss or makes a claim with his or her insurance company, there is an issue as to whether the claim or loss is actually covered under the policy. Despite the image that insurance companies try to project that they have you “in good hands” or want to protect you from “mayhem,” all they actually do is cover very the specific risks set out in their policies. Moreover, in most instances it is up to the policyholder to make himself or herself familiar with those coverages. In many states, you cannot legally rely on your insurance agent to explain to you what your policy covers, and for that reason insurance agents actually have a strong incentive to not educate you about your policy.
That’s not to say that insurance agents are trying to take advantage of their customers. I’ve represented a number of insurance agents who have been sued by their customers when their policy didn’t cover a claim or a loss, and most of the time the agent was just as surprised as their customer to learn that the claim or loss was not covered. The problem, in my opinion, is that insurance policies are written by lawyers in order to minimize the risks that insurance companies actually have to cover. Insurance agents, who typically have no legal training and lack the ability to effective analyze the language of insurance policies, and who are protected legally in most instances from having to do that, simply try to piece together the forms that comprise most insurance policies in order to meet the stated needs of their customers. Many times, customers merely say that that want “full coverage,” and to an insurance agent, that involves putting together a collection of forms intended to provide that coverage, whether it be for a car, home, or business. The problem is that the content of those forms may actually provide significantly less than the “full coverage” the customer wants.
A Personal Story of Inadequate Insurance Coverage
As an example from my own experience as a small business owner (my wife and I own a media buying company that she manages), when we bought our first commercial general liability policy (also known as a CGL policy, which is the basic form of insurance for businesses) it did not include coverage for non-owned automobiles. This meant that if one of our employees took their own car to run a company errand, for instance to pick up mail at the post office, and negligently hit a pedestrian on the street and injured them, that injured pedestrian could sue not only our employee but also the company. Without non-owned auto coverage, we would not have the ability to make a claim with the insurance company to defend the lawsuit (which is a benefit of most insurance policies that many people are unaware of). The legal costs of the lawsuit, in additional to any settlement or judgment that had to be paid as a result of the lawsuit, would come out of our pockets. Having litigated those cases over the course of my career, I know that those costs are significant—perhaps tens of thousands of dollars or more.
When we purchased the insurance, we assumed that such risks would be covered as a part of the “full coverage” we requested. Fortunately, I reviewed the policy after it was issued and noticed that the coverage was missing. I immediately contacted my insurance agent and asked that the coverage be included. An endorsement adding the coverage was issued, retroactively to the start date of the policy, and we are now protected from this risk. Instead of potentially being liable for tens of thousands of dollars in legal fees, we now have the needed coverage, and it does not add any cost to our policy premium! (When insurance works, it works well.)
Unfortunately, most people do not read their insurance policies when they are issued. In fact, in most of the cases I’ve had where a policyholder sued the insurance company (and many times the agent), the policyholder had not actually reviewed their policy. Most of the time, they had mistakenly assumed that all of their risks were covered. Because the insurance company is only obligated to cover the risks set out in the policy, many times the policyholder was either unsuccessful in their claim or had to accept a much lower amount to settle the claim, leaving them liable for the remaining costs of their loss.
We Can Help You Understand Your Policy and Potentially Avoid Thousands of Dollars in Costs
My experience, as a lawyer trained in examining insurance policies who almost missed a glaring omission of coverage from my own small business policy, has prompted me to offer the services of my firm in reviewing insurance policies to help ensure that individuals truly have the extent of coverage that they want and need in their insurance policies. Whether it is for a car, home, or business, we will review your policy and identify where you might be missing vital coverage that could cost you thousands of dollars in the event of a loss or claim being made against you.
We can help you fulfill your responsibility to familiarize yourself with the coverages your insurance policy has and does not have, and we can give you the proper questions to ask your insurance agent to help you get the needed coverage. Initial consultations are free, and we will keep our fees proportional to the premium costs of your policy (that is, smaller fees for smaller policies). Finally, if you are currently involved in a dispute with your insurance company over a claim, we can advise you and represent your interests if needed.
You never know when a potentially devastating, and uncovered, loss is going to occur, and you simply cannot rely on your insurance agent to explain the details of your insurance policy. The risks of not having the insurance coverage you need are too great to assume that you are “fully covered.” Call us today for your free consultation.