When any professional behaves in a way that is in-congruent with what is socially accepted, then damages ensue. When damages ensue, people begin to sue, and the whole thing gets ugly. With enough people impacted, class action suits can be filed in everything from medical to insurance agent malpractice.
It gets truly ugly when those who have been victimized do not even know they have been a mark till years later. Greed and ignorance are the two factors at play in many of these situations. The reality is that few people really understand the wording in a policy, and it makes it easier for crooked agents to take advantage of them.
Many instances are allowed to occur due to general ignorance on the part of the insured, and these cases can be difficult to prosecute. It can be almost impossible to assess whether or not there was intent on the part of the agents to conceal or misrepresent the policy they are selling. Few insureds recognize the loopholes that opportunistic agents use until they have to file a claim.
Overcharging has been a common problem, only recently lessened as more people circumvent the agencies and obtain auto coverage directly from the company. In the past it was not uncommon for agents to gouge their insureds for hundreds of dollars a year more than what their policies actually cost. These cases should have been blown much wider than they were, but most of the victims were young drivers who did not know they had been a mark.
Probably the most insidious form of fraud is committed as an act of misrepresentation. A common example would be agents who fail create the impression that certain risks are covered, knowing full well that the particular policy the insured has purchased might not. These misrepresentations can be very difficult to pin down without the sales pitch having been recorded by the insured.
This was a troublesome issue for many Floridians who discovered their named peril policies failed to name water damage as a covered risk. Their home or business may have been covered for the wind damage, but the ocean swell damages were not included. When the customer does not know what they are looking at in a policy, they might not realize that they are being sold a product that will not adequately protect them from financial ruin.
Another method unscrupulous agents might use to get around paying out on their most common losses is to send a policy amendment weeks or months after selling the policy. This amendment might name a new coverage exclusion. If the insured fails to give this random piece of plain mail the right attention, they may find their policy was updated to not include the very coverage they most need.
Vague wording or any inconsistencies in a policy should, within any contract, be read to the benefit of the insureds. The truth of the situation is that the process of establishing that an inconsistency or some form of vague wording even exists can take months. This is plenty of time for the average home or business owner to lose everything as a result of what they probably believed was a covered loss.
It gets truly ugly when those who have been victimized do not even know they have been a mark till years later. Greed and ignorance are the two factors at play in many of these situations. The reality is that few people really understand the wording in a policy, and it makes it easier for crooked agents to take advantage of them.
Many instances are allowed to occur due to general ignorance on the part of the insured, and these cases can be difficult to prosecute. It can be almost impossible to assess whether or not there was intent on the part of the agents to conceal or misrepresent the policy they are selling. Few insureds recognize the loopholes that opportunistic agents use until they have to file a claim.
Overcharging has been a common problem, only recently lessened as more people circumvent the agencies and obtain auto coverage directly from the company. In the past it was not uncommon for agents to gouge their insureds for hundreds of dollars a year more than what their policies actually cost. These cases should have been blown much wider than they were, but most of the victims were young drivers who did not know they had been a mark.
Probably the most insidious form of fraud is committed as an act of misrepresentation. A common example would be agents who fail create the impression that certain risks are covered, knowing full well that the particular policy the insured has purchased might not. These misrepresentations can be very difficult to pin down without the sales pitch having been recorded by the insured.
This was a troublesome issue for many Floridians who discovered their named peril policies failed to name water damage as a covered risk. Their home or business may have been covered for the wind damage, but the ocean swell damages were not included. When the customer does not know what they are looking at in a policy, they might not realize that they are being sold a product that will not adequately protect them from financial ruin.
Another method unscrupulous agents might use to get around paying out on their most common losses is to send a policy amendment weeks or months after selling the policy. This amendment might name a new coverage exclusion. If the insured fails to give this random piece of plain mail the right attention, they may find their policy was updated to not include the very coverage they most need.
Vague wording or any inconsistencies in a policy should, within any contract, be read to the benefit of the insureds. The truth of the situation is that the process of establishing that an inconsistency or some form of vague wording even exists can take months. This is plenty of time for the average home or business owner to lose everything as a result of what they probably believed was a covered loss.
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