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Insurance Carrier: Firemans Fund
Agent was asked to come out to the ranch to update our policy for new equipment and remodel on buildings. He came out in Feb. 2008 and was shown new equipment, but we never received an updated list. On Feb. 2009 we had a fire that destroyed the building the new hay equipment was stored in and the equipment inside. Agent said after the fire that he wasn't informed of the new equipment when it was there when he come out for the "update". One major piece of equipment will not be covered that was bought new in Feb. 2007 for $54,000.
Insurance Expert Answer:
When an insurance agent quotes a risk, the agent needs all the facts and should ask all the questions. As the agent does not always know what specific questions to ask, he or she often asks open-ended questions relies on the proposed insured to address matters that might otherwise be overlooked. When the agent is called out to do an update, he or she should do a full update. It's almost always in the agent's interest to add more rather than less to the policy as his or her commission is usually based on the premium. At the same time, some insureds do not fully disclose the risks, or may leave things out, or tend to under-estimate the values, as they know that the higher the dollars, the higher the premium. I do not know what the outcome of the "update" was -- or whether you paid higher premiums (or actually had the premium lowered -- it sometimes happens.) Unfortunately, when a loss occurs, it is not only a question of fact but also often becomes a question of "he said, she said." The customer says I told the agent about this. The agent says I asked him and he never mentioned it or said that didn't cost but a few dollars. The insurance company is in the middle -- it does not know who to believe, but it knows what the policy it issued -- and collected premium on -- provides. This kind of dispute often becomes a claim against the agent. As your agent is likely an independent agent, and not a captive or employee of Firemen's Fund (as Firemen's generally sells through independent agents) depending on state law any errors may be his or hers alone (the Company may not be responsible for the independent agent's actions) -- and he or she would have his or her own errors and omissions coverage. My quick guess is that unless the covered property is listed in the policy, the agent would be at least partially at fault for not documenting any major changes -- a list of what was added and deleted as a result of the update. But that issue might be one for a judge, jury or arbitrator to determine if you can't settle this amicably. I suggest that you get either a public adjuster to assist you or speak to a lawyer.