Newbie question on non payment

[Meyerbeck]

I am 1.5 years into insurance. First year I was moved to commercial and I learned a lot lot and was doing mainly property in Florida.

So second year I am back in personal lines as a CSR. About two weeks ago I saw a renewal coming up with Progressive and a note about payment. It seems that the client was prohibited from using any more bank drafts. I called over the two weeks letting him know as I was checking payment status each day.
So over a weekend the policy expires. Monday he tells the agent the reason for the lapse is that I had not called as I promised to take payment. Thankfully I took notes and could show I never said that. Three days later and still no payment made and client not answering the phone.

So my question is: as an agent or CSR do we have any legal exposure for a client that does not make payment and gets into an accident? Is taking details notes of each attempt to warn them enough to be in 'safe harbor'.

 

[TheAflacDuck]

As long as the policy is active and in-force both parties are responsible for any warranty, or representation of coverage, or material fact. If the policy is suspended or terminated the insured should not pose an active legal risk, as they do not have active coverage. Do you know if he is in a grace period still? If so, I'd approach it carefully. Try networking with someone more experienced with this kind of thing for "de facto" advice.

 

[fed up]

Your notes will keep you safe from any claim made by the former client. Good job. The onus is on the policy holder to pay the premium, not on you to hold his hand.

 

[marindependent]

the client was prohibited from using any more bank drafts.

Sounds like a fun client.

I called over the two weeks letting him know as I was checking payment status each day.

Wow that is really nice of you. You checked status EVERY DAY?

do we have any legal exposure for a client that does not make payment and gets into an accident?

Legal exposure? Not sure, but you may have an E&O exposure. Especially if the agent has committed to assisting in paying the bills.

You are the CSR - so this is likely out of your control. But I would consider getting out of the role of payment provider and into the provider of information. With the exception of very complicated risks and risks with Surplus lines policies - the client should be paying their own bills.

Monday he tells the agent the reason for the lapse is that I had not called as I promised to take payment.

Sounds like this client believes though that you guys are responsible for collecting payment. And that is a long long long road, especially for someone with a bank account that cannot be used.

Your notes will keep you safe from any claim made by the former client. Good job. The onus is on the policy holder to pay the premium, not on you to hold his hand.

And I agree with this.

 

[Allen Trent]

Do you know if he is in a grace period still?

Please tell me about this grace period for an auto insurance policy?

 

[Allen Trent]

I am 1.5 years into insurance. First year I was moved to commercial and I learned a lot lot and was doing mainly property in Florida.

So second year I am back in personal lines as a CSR. About two weeks ago I saw a renewal coming up with Progressive and a note about payment. It seems that the client was prohibited from using any more bank drafts. I called over the two weeks letting him know as I was checking payment status each day.
So over a weekend the policy expires. Monday he tells the agent the reason for the lapse is that I had not called as I promised to take payment. Thankfully I took notes and could show I never said that. Three days later and still no payment made and client not answering the phone.

So my question is: as an agent or CSR do we have any legal exposure for a client that does not make payment and gets into an accident? Is taking details notes of each attempt to warn them enough to be in 'safe harbor'.

historically, In many courts, an auto insurance agent is generally considered more of an order taker than an advisor. The more policies you add to the client relationship like home, auto, life, commercial, etc, etc the more that relationship can gravitate more from order taker to being more responsible.

Appellate Court Reverses Dismissal of Lawsuit Against Insurance Agent

Appellate court ruling serves as warning to Michigan insurance professionals against making assurances or giving advice about coverage.

www.plunkettcooney.com

https://www.lipsonneilson.com/wp-content/uploads/2018/12/Thomas-Ludden-2016-DRI-Article-1.pdf

I saw a case where I believe Hulk Hogans own auto policy had extremely low bodily injury limits when his son caused a bad injury/death & he even lost the lawsuit against the insurance agent.