Subject Index
Top Ten Maine Compliance Tips: March 27, 2010
Utmost Good Faith !!!, The Role of the Agent! March 16, 2010
Maine Agency Compliance Efforts are stepping up: March 12, 2010
Transparency Dictates Appropriate EMPLOYEE and CORPORATE BEHAVIOR!!! January 14, 2009
My HORROR at the Selling your Agency paradigm... November 30, 2009
Recommend an ARRAY of Limits for Insurance September 30. 2009
People buy for emotional reasons, not logical reasons. August 20, 2009
Client's are in DENIAL (2) ! August 18, 2009
Client's are in DENIAL! August 8, 2009
Motivation August 2, 2009
HO-15 Endorsements are not all created equal May 31, 2009
Builders Risk/Homeowners/Contracts/Account Changes March 22, 2009
Builders Risk Policy V. Homeowners Policy March 11, 2009
The Opportunity of the Recession March 7, 2009
Ordinance and Law Coverage February 23, 2009
The Diamond Ring February 19, 2009
Escalating "Tail" Prices (May be Maine Specific) February 5, 2009
Extended Non Owned January 26, 2009
A New Era with a New President January 21, 2009
Picking Coverage A limiits for a home policy. (Or any other property policy) January 6, 2009
Agency E & O Tail Coverage December 24, 2008
Candage Definition of Insurance December 23, 2008
Account Rounding and Account Credits December 19, 2008
Picking Coverage A limiits for a home policy. (Or any other property policy) December 18, 2008
You are vulnerable when changes occur December 14, 2008
Policy Non Concurrency / Non Uniform Limits of Liability December 9, 2008
Maine Wrongful Death Statute (Maine Specific) December 8, 2008
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This information is for your thoughts and comments only. It is not intended to be advice or to be relied upon in any way as accurate. These are merely ramblings of a very strange person who "thinks" about insurance!!!!!
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Top Ten Maine Compliance Tips: March 27, 2010
The Maine Bureau of Insurance has a list of Top Ten Compliance Tips on it's web site.
They Include:
1. Be complete and accurate in your license filings
2. Keep your license information current
3. Keep your address up to date
4. Keep accurate records
5. Understand the applicable laws
6. Know your product, and your company’s underwriting guidelines
7. Know your customer
8. Use your company’s compliance department as a resource
9. Be proactive
10. Use the Bureau of Insurance and its website as a resource
FOR MORE INFORMATION Click Here:
Or, copy and paste the following link:
http://www.maine.gov/pfr/insurance/producer/compliance_tips.htm
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Utmost Good Faith !!!, The Role of the Agent! March 16, 2010
Utmost Good Faith III
The Role of the Agent
Why this program? It is clear to me that Insurance Agents are having trouble understanding their value to a client. In this interactive program we will discuss salient issues that surround the role of the agent in relation to both the insurer and the client. These will include:
Who do you actually represent, how and when do you represent them?
The changes in your responsibilities through an insurance relationship?
How do you recognize your ethical obligations to your insurer?
How do you recognize your ethical obligations to your client?
What should I be concerned about from an E & O standpoint, and;
How can I advocate for my client without being disloyal?
Please attend this fascinating program, fulfill your ethics requirement and have some LEARNING FUN!
OFFERED MAY 4, 2010 Sign up at www.hecandage.com/training.htm
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Maine Agency Compliance Efforts are stepping up: March 12, 2010
The Bureau of Insurance is stepping up compliance of certain AGENCY issues!
Agents should be aware that the Bureau of Insurance is conducting "compliance audits" on agent's books of business.
They are checking cars on in force policies against valid Maine Registrations to determine that the vehicle is titled to the policyholder and registered to that owner. They compare the State Registry records to see if cars are being insured that are not owned, but are being used to artificially lower premiums through a multi-car discount that should not be on the policy. They are being increasingly aggressive about enforcement of agency compliance issues.
While you should not become alarmed, this would be a good time to review the accuracy of all your policies and procedures relative to compliance with Maine Law. Your policies should state that no agent is allowed to distort any underwriting or rating information to an insurer. Penalties can include fines, reprimand, censure and possible loss of license as well as other elective enforcement options..
Some of the compliance issues that they are checking include:
Receipts, as used in rating of a policy - Artificial suppression or inflation of receipts to lower or inflate premiums:
A "ghost vehicle" left on a policy to retain a multi car discount:
Drivers: Failure to disclose and rate for drivers:
Rating: Failure to rate vehicles properly for the exposure:
And many, many other similar situations.
Agents need to have written policies and procedures to assure compliance and those policies must be enforced by the agency.
Just a word to the wise... Howard
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Transparency Dictates Appropriate EMPLOYEE and CORPORATE BEHAVIOR!!! January 14, 2009
Imagine the horror to have this on the internet if you are the employer of these PEOPLE!! Everyone MUST be accountable for their behavior as not everyone out there loves us and NOW they have a way to express their contempt for us!
http://www.youtube.com/watch?v=5YGc4zOqozo
7,264,429 views
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My HORROR at the Selling your Agency paradigm... November 30, 2009
I recently went to a trade show where we were an exhibitor. The booth across from us was an internet company that does internet marketing. I inquired if they did work with all kinds of companies or just insurance agencies. They answered they work exclusively with insurance agents. He asked what I do and I told him I help people buy and sell insurance agencies. He said, "Oh yeah... Our agents approach other agents all the time and we show them how we are set up on the internet and then we scare the daylights out of them and beat their price right down and our guy buys 'em. Then we put them on our platform and our agent can either flip it and make a lot of money or can keep it and make a lot of money that way." I was HORRIFIED... So many agents sell for so much less than they should as they are unwilling to get objective advice. Agents just do not understand that there are really people out there like this! BEWARE!
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Recommend an ARRAY of Limits for Automobile Liability Insurance September 30. 2009
Do NOT assume liability for recommendations of limits by the way you deal with clients. Recommend limits as choices available to the Insured and make sure you give CHOICES.
The choice of limits is a decision the Insured needs to make.
Do not assume the responsibility to recommend limits.
Always give choices if choices are available!
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People buy for emotional reasons, not logical reasons. August 20, 2009
It seems to me we often appeal to peoples logic when we are selling insurance. We need to realize, with the degree of denial people have, we need to help them understand the Post Loss implications of the decisions they make when we are selling them the insurance. That takes us painting a clear picture of the consequences of NOT having the coverage we are attempting to sell them. My example is selling Replacement Valuation on Personal Property on a Homeowners. We can invoke "You should buy Replacement Cost on Contents" until the cows come home, and the client will not "get it". If we talk about lightning hitting their new flat screen TV and them standing at Best Buy with a check for $ 1,000.00 trying to replace their $ 3,000.00 flat screen and having to come up with $ 2,000.00 out of pocket, they begin to feel the pain of what it is like NOT to purchase the coverage correctly!
Unfortunately, we almost have to be fear mongers to make them feel the pain, BUT THAT IS WHAT IT TAKES to overcome the Denial! Learn to make things real when we are explaining coverage. We will have much happier clients at the time of loss!
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Client's are in DENIAL (2) ! August 18, 2009
We usually, out of a desire to be fair to a client, offer an "apples to apples" comparison. This gives the client's denial a chance to take the sale process, completely out of your hands. The expectation for price will be set by the FIRST set of numbers someone throws out in THIS TRANSACTION! So, you ask, how can I get the client's attention and build trust and rapport (trust and rapport, are really the same thing) and build it quickly? 1. Stay away from "apples to apples". 2. Give your first quote the "Way I would buy the insurance for myself". Tell this to the client! The way I would buy it for myself! I can sell you a homeowners "the way I would buy it for myself" for $ 625.00. If they resist, don't back away. You ask "Is it high?" If they resist... and look quizzically.. "Well yes... My other agent gives it to me for $ 587.00." Then ask, "Does it have all these bells and whistles?" They will not know.. "Well may we look?" You ask? This allows you to sell value and overcome price!
Think about it, if you go to the auto dealership and the salesman asks can I help you and you tell him you want to buy a car but you don't know what. do they take you to the lowest price car? NO.. They take you to the highest price car and work down! By giving them the "apples to apples" thing, we are doing the opposite. Start at the top and sell value, not price!
Next time I will talk about how people buy for emotional reasons, not logical reasons!
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Client's are in DENIAL! August 8, 2009
I held a Risk Management 101 class yesterday and the conversation quickly went to how to focus an Insured on Managing Risk rather than just buying insurance. The conversation was all about how to make a client trust you when the client has not experienced a claim. As this is an interesting conversation, I will focus on it in the next few entries.
It is important to understand first that a client is in denial when they approach you to make an insurance purchase. They have been compelled to you by some outside source (a bank or a finance company) and they are simply thinking of getting the insurance to satisfy the insurance requirement for the loan or to comply with some other sort of rule that says they must carry insurance. They simply are not thinking about having a claim and you need to focus them on the adverse consequences they could face if an incident does occur.
Fundamentally I feel, we are attempting to make them think long term rather than short term and to thus get into a mental position to think about the value of what they are buying rather than just the price. This as a longer term focus and requires a different set of skills and a different approach. In my next entry I will talk about our usual methodology to attempt fairness and how we try to give an "apples to apples" comparison. Why this may not be the best approach and how we can build trust wiht the client very quickly and avoid this trap.
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Motivation August 2, 2009
Thanks for your patience... I have been slammed with work and have scheduled myself to write in this blog every week. One of my subjects will be motivation as I find it to be important in so many aspects of what we do, especially in respect to the way people purchase insurance for irrational reasons. In a recent instance I was analyzing someone's motivation for the things they were doing and stumbled upon what I perceive is a core motivator in many cases.
Economic distress will cause people to do really odd things with their values.
Desperation will cause them to do even odd things with their values.
Having to explain to one's spouse why or how you did something will cause people to abandon any values they ever perceived they had!
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HO-15 Endorsements are not all created equal May 31, 2009
Howard Candage, CPCU, CIC, CRM, Maine Insurance Blog Please E-Mail Feedback >>> Click Here
Someone called me recently about my diamond ring story and said, "There is a $ 1500.00 limitation for jewelry in the HO-15. What am I doing wrong?" "Nothing", I answered. "Not all HO-15 endorsements are created the same."
Depending on the risk you may or may not be getting certain coverages extended when you add the HO-15 endorsement. Know the forms your companies are using and make sure the company you are placing the coverage with fits the risk! This endorsement is like writing umbrellas or, as Forest Gump puts its, they are like a box of chocolates. When you take one out you never know what you are going to get!
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Builders Risk/Homeowners/Contracts/Account Changes March 22, 2009
Following on the comments made in my last Blog, the agent who contacted me, brought up several other excellent points. This information also tracks with another Blog entry as this is a point when there are major changes in your insurance account:
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The Agent who asked me these questions and posed these thoughts about Builders Risk and Homeowners, also points how important it is to have proper contracts in place, proper hold harmless agreements and proper waivers of subrogation in place. This is so true, and my experience has been that usually the contractors who get into messes have not taken the time to put the proper legal documents in place. One of the reasons I get the expert witness work I do, is that when the claim happens, the plans that were made in the beginning have never been followed through. We are so apathetic about taking the proper steps as things so seldom happen, we become complacent. PLEASE, don't let this complacency and apathy sneak into the way you practice insurance! Things may not happen very often but when they do it is MESSY! Just a word to the wise... It may SEEM like you are wasting your time and it may SEEM inconsequential, but it is important to follow through on all those necessary steps. Take the time to follow through and make sure your insureds follow through, as well!
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Builders Risk Policy V. Homeowners Policy March 11, 2009
I recently received a call from an agent and he was asking me questions about Homeowners Policies v. Builders Risk Policies. It seems he insures a contractor who is building a multi million dollar home. The Owner of the home went to his large agent and asked to insure the home. My agent client had advised a builders risk. The owner's agent said "Oh no, put it on a homeowners. It is so much cheaper." The house is partially completed and the homeowners carrier has come back and demanded the owner require the contractor to carry limits adequate to cover the full value of the home and name the owner as an additional insured. This is going to cost the contractor tens of thousands of dollars. The agent asked me why this was occurring.
Think about it, I said. The agent advised the risk be put on a homeowners, and the homeowners does not have the right insureds or the right coverage. If the agent had written a builders risk and an OCP, there would have been adequate coverage, the right insureds, and this would not be happening. The homeowners carrier is trying now, mid-stream, to make the contractor carry the corverage that should have been written for the owner in the first place.
Don't just GRAB for the homeowners on a high value home as it is "cheaper". It may be "cheaper", but the risk is not written correctly. The homeowners does NOT have the correct insureds or the correct coverage. It is not always JUST about saving money!... OK???
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The Opportunity of the Recession March 7, 2009
The recession is upon us and it is impacting us in many ways. One of the good things I feel could come from this distress is a mitigation of the pressure to federally regulate insurance. The government has been touting the benefits of federal regulation, mainly, I feel, because of a big bank and a big brokerage house pursing the legislation. The reason behind the reason for this push is to make compliance so expensive that the small insurance agent cannot afford to stay in business.
Two results have occurred here from the economic slow down:
The big banks and brokerages have been severely hurt financially, and;
The vast superiority of federal regulation has been highlighted!
This is our opportunity to make sure small, effective insurance distribution remains in place and that the Insurance business remains state regulated in a sensible way. We have to TAKE this opportunity to hold our ground as agents.
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Ordinance and Law Coverage February 23, 2009
I was recently deposed as an expert witness in a case involving a Homeowners loss. The case was fairly complicated and had many issues of fact and "moving parts". Many of the allegations and details are unimportant to this discourse. What I wish to illuminate in thnis blog, is a simple fact that came to light in the deposition. One of the allegations in the law suit was the failure to provide "Ordinance or Law Coverage" on the policy. There was a substantial loss as the policy did not provide coverage for "Ordinance or Law" and the post loss cost to bring the home up to the current building codes was alleged to be $ 45,000.00.
One could assume the Producer "forgot" to add the endorsement. Investigation revealed, however, that the reason the coverage was not provided was much more subtle than a simple analysis might reveal. This came out clearly as I was deposed. The ability to think on ones feet in a deposition is essential (just to set the scene properly as I was unprepared to be forced to think this through in the presence of the Plaintiff's attorney). As I was questioned about why the Producer may have "forgotten" the endorsement, I was forced to think through the events that occurred when the coverage was written. As I thought through the events chronologically, it became apparent that the culprit was not the Producer "forgetting" to add the endorsement. The culprit was, the home did not qualify for the companies "Preferred" homeowners program. The preferred program provided the ordinance and law coverage as part of the package of coverage. The Insurers "Standard" program did not provide this coverage automatically! Thus, a $ 45,000.00 uncovered loss!
My point is, we, as Producers, move policies from the "Preferred" to the "Standard" programs and think mainly of the price differential or "rating tier". I feel we would be prudent to also analyze the coverage equivalents and add the proper endorsements so the Insured does not lose coverage due to the "rating tier" for which they qualify. That was a surprise I would not have thought about in advance of the loss, had I been the Producer! A word to the wise perhaps... It took me by surprise!
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The Diamond Ring February 19, 2009
As a professional trainer, it is difficult sometimes to tell how much impact you really have on individuals. The one reliable indicator I seem to see is if I actually change someone's BEHAVIOR. A gratifying incident happened recently I thought I should share, both in the respect of changing behavior AND in the respect of an important coverage lesson.
A student came to my class who had a great deal of insurance experience, and was just getting licensed. She came to class, sat for her test, and sent me a wonderful thank you e-mail and told me this story.
"I have worked in the agency for a long time," she said. "In your class, I realized I have not been doing a very good job in customer service. I had really let down in this area. There was one day between your class and the examination, and I worked this interim day. One of the first calls I received was from an Insured who had lost the stone from the setting in a $ 10,000.00 diamond ring and IT WAS NOT SCHEDULED! Before your class I think I would have given this guy the "I'm sorry Sir, but if it is not scheduled, routine" but due to your training I did not do that. I went to his file and discovered he had an HO-15 endorsement. I managed to pay him for the ring minus his $ 500.00 deductible and I think I made this guy's day a little better."
Now... I have to tell you I would not have thought to look at the HO-15 for coverage for this claim. This young lady took the time to THINK about the situation, analyze the facts, and FIND coverage where she thought there was none. This is the best gratification I can get from training. Someone covered a claim that they would have previously denied. There is an important lesson in this for all of us.
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Extended Reporting Periods for Agency E & O February 5, 2009
Selling agencies recently we have gotten a shock with "tail" (Extended Reporting Period) pricing. In an earlier entry I discussed the fact that some policies only offered limited rights to purchase "tail" coverage. Now we are finding that group E & O policies have been endorsed, beyond the original rights to purchase tail coverage at scheduled prices, to increase the cost of a ten year "tail" from 200% to 300%! Be cautious with this. When you sell or purchase an agency you need to be sure everyone is aware of the cost of this coverage so there are no surprises!
"Tail" coverage is expensive and tail coverage is necessary. It will be a warranty in any good purchase and sale agreement. Budget for the cost of the extended reporting period in setting your goals!
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January 26, 2009
Extended Non Owned
One of our clients came into the agency today and reported that he had an accident with the truck he drives at work. Apparently the claim was serious enough so they have exhausted the liability limits of the commercial auto policy. He wants to know if there is any coverage on his personal auto policy. I told him there was not and he then asked if we could get it for him. Can we or could we have gotten it?
We could have added "Extended non Owned" auto coverage to his personal policy to cover just this exposure. The endorsement covers the use of a "regularly furnished" auto, for liability coverage. There is practically no underwriting, and the coverage is very inexpensive.
You should have a methodology in your agency exposure identification process to ask if your clients regularly operate any other vehicles. If they do you should be offering "Extended Non Owned" to pick up this ancillary exposure. You at least need to give the insured the choice to turn it down, rather than having to talk to your E & O carrier about this claim!
UPDATE: This was previously in my Newsletter!
This coverage used to apply to ANY VEHICLE! In the new personal auto policy they have eliminated the coverage for any "Commercial Type Vehicle". So the extended non owned now only applies to Private Passenger Autos, Pickups or Panel Vans with four wheels or more.
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January 21, 2009
A New Era and New day... Inauguration Day... How many countries could we live in where the transition of power from one leader to another is accompanied by a song, a prayer, a poem and a hug for the new leader from the outgoing leader. Many countries do this transition through a military coup!!!
There will now be a degree of change...
New taxes?
New jobs?
New bailouts?
A different attitude toward current and future military conflict?
I see an increasing emphasis on ethics that will impact our insurance industry. I will discuss this in my ethics classes and write my opinions here. In my opinion, we are blind to many of the ethical challenges our industry faces and some our industry creates. I am anxious to illuminate some of them and have all of you present me with the thoughts and foundation for others! Thank you!
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January 6, 2009
Happy New Year!!!
I have gotten a LOT of positive feedback on this information! Thank you everyone for looking at it and for your positive comments. This is not meant to be advice of any kind, but merely random thoughts that I hope will help us all become a bit more astute at what we do.
On December 18, 2008, I commented on picking the Coverage A limits for Homeowners (or other property lmiits). In thinking this through, I am led to wonder if, when we "quote" a homeowners, rather than "quote" just the limit that results from the Replacement Cost Estimator, should we offer the Insured a "range" within which we feel it is appropriate to set the Coverage A or other building limit?
The replacement cost estimator, being the minimum amount the company will accept for underwriting purposes, I wonder if would we all be smart to use that as a "bottom end" limit and offer a "range" for the purpose of letting the Insured choose the Coverage A Limit? If we say the Replacement Cost Estimator sets the bottom of the range at a number, say $ 200,000, should we then offer the client the option to choose to insure anywhere form $ 200,000 to say, 20% more ($ 240,000) allowing the Insured the opportunity to make the "pick" rather than ourselves?
Food for thought, everyone! Thanks for your support!
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December 24, 2008
Happy Holidays to Everyone...
I have recently been selling some agencies and encountered E & O Coverage with VERY LIMITED rights to purchase "Tail" coverage. We all know that the heart of a claims made contract, from the standpoint of being "Claims Made", is the right to purchase "Tail" coverage. I am sure the coverage is less expensive because of the different Insurers contractual rights, but buying a claims made contract in long tailed lines like E & O is basically throwing your money away when it comes to selling your agency, or facing having to buy an Extended Reporting Period for other reasons.
Review the rights to buy a tail before you change insurers! If you have questions, call me or e-mail me! I think we grossly underestimate the gestation period for E & O claims and thus might not pay enough attention when we buy it. It is the "Cobbler's Children" thing!!!!!!
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December 23, 2008
Happy Holidays to Everyone...
Today I will share my amended definition of Insurance. This comes from a brief I wrote in a piece of litigation support.
An Insurance contract is really a type of put option. I define an insurance contract as follows:
Candage Definition of Insurance
Insurance is an option contract in which one party, the “Insurer”, sells a right to another party, the “Insured”, to exercise a future option for reimbursement of specified contingencies within specified parameters for a specified period of time.
This futures (option) contract can be written in three distinct and separate ways:
Finance Option: The Insured establishes the intrinsic value (Accurate Insurance Limit) of the option and the Insurer loads the requested intrinsic value with the option premium to determine current market value (premium) of (for) the option.
Indemnity Option: The Insurer establishes the mandated intrinsic value (Accurate Insurance Limit) of the option and the Insurer loads the intrinsic value with the option premium to determine current market value (premium) of (for) the option.
Extended Indemnity Option: The Insurer establishes the mandated intrinsic value (Accurate Insurance Limit) of the option and the Insurer loads the intrinsic value with the option premium to determine current market value (premium) of (for) the option. The Insurer then modifies the insurance contract to grant extra-contractual elasticity within specified contractual terms.
Happy Holidays to everyone and to all your families!
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December 19, 2008
Again, from my Ethics Seminar... An insurance company officer was illustrating large homeowners losses they suffered. One of the trends in fire losses in excess of $ 100,000.00 is that in most of these losses, the company wrote only ONE LINE of COVERAGE!
So it appears not only to be to your advantage to write multiple lines of coverage, agents, it appears to make a difference to your Insurance Companies TOO!!!
Agents !!!!! Round out those accounts! Round out those accounts! Round out those accounts!!!!!!!!!!!
Insurers !!!!! Account Credits are legitimate!!!!
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December 18, 2008
On Tuesday we had one of those magical days where everyone flowed into a thought process in my Ethics Class. We talked of many things, of shoes and ships and sealing wax... (oops, off track..)... I will elaborate on some of the things we discussed in this forum in coming days. One of them I want to highlight today...
Picking Coverage A limits for a home policy. (Or any other property policy)
To the industry's credit, we force people through a home cost estimator instead of just taking the Insured's woefully inaccurate rendition of R/C and slapping it on a deck page in the Coverage A slot, and then hoping it is accurate and penalizing an insured through an insurance to value clause if it is not accurate. There are reasons for the inaccuracy we will discuss in later blog entries, but the focus of this entry is how we pick the limit and what it is for.
We all think it is an estimate of the replacement cost of the home. While that IS the basis of what we are doing, we are notoriously bad at picking that limit accurately, and we THINK it is an estimate to protect the Insured. I would postulate to you, more accurately, that it is a protection for the Insurer to make sure we contribute an accurate premium to the "mechanism" of insurance.
This being true, people in my classroom, when pressed, "what is the Coverage A limit for," said, "It is the replacement cost of the home!" I think we all need to rethink what that Coverage A "Pick", really is. It really IS an estimate of "Replacement Cost" used to determine a "PROPER PREMIUM". Looking at that number, in this way, we really should look at the number generated by the estimator as the "minimum" amount of coverage to satisfy the underwriting rules for the Insurer!"
If you view that number this way, you will present to the insured, in a much more defensible fashion, the R/C estimator amount as only an "indicator" or a "minimum" to use to make the policy function correctly and to put the responsibility back on the Insured to use that limit or to INCREASE it to a more effective number.
This is not "rocket science", but it is a much safer way to protect yourself as an agent, protect the Insurer and to protect your Insured adequately!
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December 14, 2008
Be Careful when an account CHANGES!
I have observed in my litigation support that a very vulnerable spot in the life of an insurance account is when there are changes in the risk. I have seen E & O claims rise from:
Building additions;
New Buildings;
New Operations;
Insured's not telling the agent they are changing values or operations;
Agents not acting quickly enough when an account changes;
Agents incorrectly relying on Insurers to evaluate underwriting information.
Act quickly and clearly when an Insured changes the risk. YOU can become the insurer of choice through your own E & O if you do not act quickly and decisively with your Insured.
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December 9, 2008
Policy Non Concurrency
We have all been taught to make sure policies are concurrent if we are insuring a single property with multiple policies. What we have not been taught is how important it is to make sure limits are concurrent within an account. I was recently faced with a question where a single commercial insured had multiple commercial auto policies due to the nature of the risk. One policy was written with a $ 500,000 Limit of Liability and the other with a $ 300,000 Limit of Liability. The personal auto was also involved with a $ 300,000 Limit of Liability.
In Maine it is mandatory we make UM/UIM limits track with the Liability Limits.
The Insured called the Agent and added an additional vehicle. It was added to the policy with the $ 300,000 Limits on both liability and UM/UIM. Subsequently someone was injured and pursued a claim for Underinsured Motorists. The policy responded with a $ 300,000 settlement. Problem solved... Hold on... Not so fast. The injured party found out about the policy with the $ 500,000 limit and pursued the Insured to get more money. The Insured contacted the agent and found out the truck had been added to the policy with the $ 300,000 limit and told the agent, "Wait a minute, you were supposed to add this to the policy with the $ 500,000.00 limit." The client then pursued the agent under E & O to get the other $ 200,000. If the agent had concurrent limits, the issue would never have been there to pursue.
MAKE SURE ALL LIMITS ARE CONCURRENT FOR ANY INSURED!
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December 8, 2008
I was just reviewing a web site for one of my clients and WOW! I found they are still advising the State of Maine Wrongful Death Statute awards $ 400,000 in damages in Maine!
The 2007 legislative session CHANGED the AWARD to $ 500,000!
WARNING!
AGENTS AND CONSUMERS!
When I am approached as an expert witness and asked if there it a "standard" out there that would cause one to recommend limits of liability in Maine, I am going to have to say while I do not impose a "duty" to recommend, the "standard" would have to be a combined single limit of liability NOT LESS than $ 500,000.
So, in my classes and in my litigation support practice I ASK YOU how much liability insurance is ENOUGH, in Maine?
My answer to you, agent, is a quotation in the file for MORE than the Insured purchased!
As much as it may be difficult to convince people to purchase adequate limits, in Maine, there are two standards that are out there for any expert to site...
1. A recommendation for a Liability Limit with a MINIMUM of $ 500,000
2. A recommendation for a Single Limit of Liability
Inform your clients of the consequences of inadequate limits!
Protect them and protect yourself.
Make the choice of Limits UP TO YOUR CLIENT!
Maine Statute Follows
http://www.mainelegislature.org/legis/statutes/18-A/title18-Asec2-804.html
MRSA 18-A §2-804. ACTIONS FOR WRONGFUL DEATH
(a). Whenever the death of a person shall be caused by a wrongful act, neglect or default, and the act, neglect or default is such as would, if death had not ensued, have entitled the party injured to maintain an action and recover damages in respect thereof, then the person or the corporation that would have been liable if death had not ensued shall be liable for damages as provided in this section, notwithstanding the death of the person injured and although the death shall have been caused under such circumstances as shall amount to a felony.
[ 1979, c. 540, §1 (NEW) .]
(b). Every such action must be brought by and in the name of the personal representative of the deceased person, and the amount recovered in every such action, except as otherwise provided, is for the exclusive benefit of the surviving spouse if no minor children, and of the children if no surviving spouse, and one-half for the exclusive benefit of the surviving spouse and one-half for the exclusive benefit of the minor children to be divided equally among them if there are both surviving spouse and minor children, and to the deceased's heirs to be distributed as provided in section 2-106 if there is neither surviving spouse nor minor children. The jury may give such damages as it determines a fair and just compensation with reference to the pecuniary injuries resulting from the death to the persons for whose benefit the action is brought and in addition shall give such damages as will compensate the estate of the deceased person for reasonable expenses of medical, surgical and hospital care and treatment and for reasonable funeral expenses, and in addition may give damages not exceeding $500,000 for the loss of comfort, society and companionship of the deceased, including any damages for emotional distress arising from the same facts as those constituting the underlying claim, to the persons for whose benefit the action is brought, and in addition may give punitive damages not exceeding $75,000, provided that the action is commenced within 2 years after the decedent's death. If a claim under this section is settled without an action having been commenced, the amount paid in settlement must be distributed as provided in this subsection. No settlement on behalf of minor children is valid unless approved by the court, as provided in Title 14, section 1605.
[ 2007, c. 280, §1 (AMD) .]
(c). Whenever death ensues following a period of conscious suffering, as a result of personal injuries due to the wrongful act, neglect or default of any person, the person who caused the personal injuries resulting in such conscious suffering and death shall, in addition to the action at common law and damages recoverable therein, be liable in damages in a separate count in the same action for such death, brought, commenced and determined and subject to the same limitation as to the amount recoverable for such death and exclusively for the beneficiaries in the manner set forth in subsection (b), separately found, but in such cases there shall be only one recovery for the same injury.
[ 1979, c. 540, §1 (NEW) .]
(d). Any action under this section brought against a governmental entity under Title 14, sections 8101 to 8118, shall be limited as provided in those sections.
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