By Joseph P. Stringer, CIC, CRM Anderson Insurance Associates, LLC
I
We don’t sell smart phones.
We sell insurance.
was recently asked to act as an expert witness in an Errors and Omissions case against a direct writer. My role was to testify as to the professional standards of practice and the duties of the agent to his client that are required by South Carolina’s legal definitions of agent, broker and agency. At the end of the deposition, the attorney for the company referred to my statement that the agency had not fulfilled its duty to the insured in that they had written auto limits that were seriously deficient for the purpose of meeting the insured’s needs. Here was our exchange: Attorney: You testified that this agent violated his responsibility to his client by writing limits of $25,000/$50,000/$25,000 for the client. Yet, these limits are fully approved by the Department of Insurance for this state. Are you stating that ANY insurance agent who writes these limits for his clients is not fulfilling his obligation and duty to his clients? Stringer: Yes. That was the end of the deposition, but I think there is more we need to understand about the duties we have as agents. Our duty as professional insurance agents is established legally for us and is also a moral duty required of us. We are
30
South Carolina Agent & Broker • Summer 2013
not selling a commodity. Though many companies advertise insurance as if it were an item to purchase and most of our clients want to treat it as such, we know insurance is not a type of goods. We don’t sell smart phones. If I sold smart phones and the product did not address the buyer’s needs, the most my client might lose is $500, or they might be inconvenienced. I sell something entirely different, however. I sell insurance. If my product does not meet the buyer’s needs, he could lose everything he owns: his life savings, future earnings, his property and assets. As insurance agents, our business is to make people whole again. After the fire, the collision or the injury, our client expects our policy to respond. They expect us to help them recover their lost property, pay for the injury they caused others and pay for medical help and lost earnings. We know that we can’t fulfill every claim, that there are limitations and exclusions and that the client often doesn’t want to buy what he needs. Knowing that, it is still our moral obligation to educate him, advise her and help them understand to the best of our ability. To return to the question the attorney asked me and my answer: Is selling an auto policy with minimum limits serving our clients? No. That policy is a lie. It gives the impression that the buyer is “covered” for auto insurance. Yet, one accident with two people injured in the other auto