Proof. It’s not always in the pudding.

If you never thought documentation
was that important, read on:

In a recent high profile legal case, a celebrity sued his insurance provider in an attempt to cover the losses he incurred when his son’s 2007 car accident injured a friend, and his limits on the policy were not sufficient to cover the friend’s settlement. The plaintiff had an auto policy with a limit of $250,000 per vehicle. Although, the plaintiff owned both cars involved in the accident, he fell short of the combined 500,000 limits, thus he had to cover the excess out of pocket.

Crash

The plaintiff’s lawsuit alleged malpractice, claiming that his insurance broker should have protected his substantial assets with an umbrella policy.

The outcome:

The lawsuit was dismissed. The celebrity had to accept a nuisance settlement offer just to avoid paying his insurance broker’s legal costs.

Why? The insurance broker had proof; documentation showing that not only had umbrella coverage been offered to the plaintiff’s now ex-wife, but it had been offered several times, the last of which was only four days prior to the accident.

The proof turned an otherwise costly case for the insurance provider into a seemingly frivolous lawsuit. Without proof, the plaintiff may very well have won.

As insurance agents and brokers, you’re working in an industry directly related to preventing or recovering financial loss — as this example demonstrates, proof and documentation are essential.

Gaps in coverage can be detrimental. A responsible broker will look for said gaps and provide a recommendation for filling them. And, in many instances, doing the right thing by recommending additional coverage could also result in increased revenue. However, recommending appropriate coverage doesn’t always mean the client will pay attention to the advice given. 

If you’re not already doing so, UIG recommends checking with your clients on an annual basis (at a minimum) to assess their current coverage and situation and look for any gaps.

In this age of smartphones, email and social media, it’s easier than ever to communicate with your clients as well as to document when you touched base and the topic you discussed. It will not only help you make sure your clients are properly protected, but it will help protect you, just like it protected the broker in this case.

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