Many states are requiring some number of hours of ethics training for insurance agents these days. I went to a three hour class here in Nashville recently.
One of the things the instructor did *not* touch on is: Don’t lie to your insured about what’s covered and what isn’t. You would think that would go without saying, wouldn’t you?
I just lost an order to bind on a piece of business due to the competing agent lying about the nature of the competing coverage. I was competing against a carrier I represent, so I went to the carrier to confirm what they can and cannot offer in this line. The underwriter confirmed my suspicions — the coverage the other agent said was provided is not available. Ever.
I provided the written confirmation from my underwriter to my agent, so he can go back to the insured to enlighten them if he so chooses. But the real question here is:
What is the insured’s motivation in accepting the warm, fuzzy lie from the one agent versus the cold, hard truth from the other?
Does an insured think things through and realize that if they get the “confirmation” of coverage from the one agent in writing, they can sue him later and recover damages when it turns out there’s no coverage in the form itself? Or do they believe that ignorance is bliss? Or does this competing agent seem somehow more trustworthy or more knowledgeable than mine?
In this case, mind, the insured actually paid 25% *more* for the fictitious coverage. So they have been damaged not only by relying upon a representation of coverage that isn’t there, they have paid more premium for it.
How can this agent live with himself? And what can my agent do to compete against such an under-handed approach? I don’t know…yet. I’m hoping to find out, and that the good guys will finish first.
I can’t even imagine the world in which I would intentionally mislead my insured as to coverages offered, or ignore the black-and-white words on the quote and rely upon a representation from someone else that said what I wanted to hear. I hope I’m not a rare breed…..