Insurance Agent Liability

Written by Steven Matz on . Posted in .

“What if I find out after an accident that my insurance agent didn’t sell me the proper coverages? Can I sue the agent for the mistake?”

Many people don’t pay much attention to their insurance coverages until they have an accident. Only then might they find out that they weren’t covered at all for a particular loss, or that they didn’t have nearly enough coverage to take care of their losses. The question often arises whether the insurance agent should have told the customer which coverages to buy, or how much to buy.

The answer is usually “No.” In Michigan, an insurance agent is generally just an “order taker” who sells you whatever you ask for. The agent doesn’t have a duty to help you figure out whether you are buying more or less coverage than you need, and it is your responsibility to know what your coverages are. As with most things in the law, there are some exceptions, although they can be difficult for the customer to prove. Here are the four exceptions:

  1. Did the agent tell you something about your coverage, or lack of it, that was incorrect?
  2. Did you make a request when you applied for coverage that the agent should have asked you to clarify?
  3. Did the agent offer advice about what you should do that turned out to be wrong?
  4. Did the agent promise to do something that the agent didn’t do?

Remember, you need proof to get anywhere with these exceptions. Your word alone against the agent means you lose.

Please keep in mind that the insurance policy is a contract. You are expected to know what it says. If you think you have been misled by an insurance agent and that you can prove one of the exceptions, a lawyer who does insurance work may be able to help you.

Source: 461 Mich 1

Steven Matz

Written By Steven Matz

Steven Matz
Steven J. Matz is a founding shareholder of Matz Injury Law. The firm’s concentration is on personal injury litigation, with an emphasis on traumatic brain injury. Mr. Matz earned a Bachelor of Arts degree with high distinction and highest honors in 1974 from the University of Michigan and a Juris Doctor degree in 1977 from The George Washington University National Law Center. Mr. Matz lectures and publishes in a number of areas, including ethics, marketing, trial tactics, and head injury. Mr. Matz has served on the Michigan Association for Justice Executive Board and currently serves the Michigan Attorney Discipline Board as a Hearing Panel Chairman and Master. He is also a member of the State Bar Committee for Character and Fitness.
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