Scaring Them To Tell The Truth

[nyc2phi]

Lady had two brand new cars in the city and says she's the only driver, my inner instincts go off and ask about any other drivers. She continually says no. We get to the end and before I bind I ask about drivers one more time and stretch the truth by saying that if there's someone using the other car on the regular it may not be covered if they are in an accident. She immediately gave me her husbands license info which was just reinstated she says.

Is this wrong? I know the carrier would pay out and maybe just cancel or something but I don't want to deal with that.

On a side note, computers don't have inner instincts and wouldn't of caught that. That's why agents who are incentivized on good loss ratios are always best for a company

 

[insurance1822]

No, not wrong at all. I will also say this, insureds are worthless bum scum bags who will lie all day long. You must protect your loss ratio etc.

That being said, what carrier are we talking here? I know a few that would deny that claim (GMAC, Progressive etc.)

Also - I can tell you that Donegal would not let that policy be issued without an underwriting talking w/ you. In fact, they would make the lady sign a statement before issuance. This is why, we no longer write w/ them.

 

[indienoise]

I've created a really basic but clear statement for insureds to sign in just such an event. Out job is to sell, yes, but also underwrite the risk properly. The carrier probably would pay the claim, sure, but there always is the chance it would go precisely as you described to the client. I don't see a thing wrong with it.

 

[Aram Fingal]

I really don't like getting clients like this, but it happens. If I suspect something like this I will simply point out to them that the policy contract language requires that they disclose all drivers in the household, and that by signing the application they are agreeing to that. I let them know if they then do not disclose all the drivers, they are technically committing insurance fraud and that the company would have legal grounds to deny any resulting claim, and would certainly cancel or non-renew them in that event.

Most of the time, this will either convince them to disclose additional drivers or they will decide to try a different agent who doesn't ask. Either way, I've done my job by both informing the client of potential risk to them and properly underwriting the risk for the company.

Do I still get the odd person who gets through with an undisclosed driver? Yes. If someone insists on being untruthful you can only do so much. That's why it's important to complete the application correctly and have them sign it.

 

[insurance1822]

Well just for reference. I had a family that I wrote their package w/ Safeco. I didn't list their kid because he wasn't licensed & lived away at school. Well...he gets hit by a car while walking & gets all banged up.

Two years later he files suit against Safeco for the UM/UIM claim. I produce signed applications across the board. They still write a check for 100k because somehow they were able to say he was a HOUSEHOLD MEMBER.

 

[GXR2]

I didn't list their kid because he wasn't licensed & lived away at school ... They still write a check for 100k because somehow they were able to say he was a HOUSEHOLD MEMBER.

Safeco is correct.

It's not ... "somehow they were able to say" It's... "YES they were able to say" ... because it's true.

UIM provides coverage for you and family members who reside in your household. It would also cover any passenger in your vehicle, and minor children who do not reside with you, or kids away at college.

A child away at college is still considered a household member because they haven't moved out on their own. They're just temporarily away at school and can come back "home" to "their primary residence" anytime.

The same is true for active military who may be away on a temporary assignment. If their primary residence is still their home, they should be listed, and preferable insured. If the carrier doesn't have an option for listing active military away, then list him/her on their vehicle as personal use and put it on comprehensive only (if it is not financed or leased). This will save your client money while away, and when returning home by not incurring a "no-prior" rate.

Some states, and insurance carriers have laws that say they can not deny a claim if a household member was not listed. Some states and carriers can and will deny a claim. Progressive is one of these carriers that will deny a claim for unlisted household member. (they just recently changed their guidelines on that)

This is why it is imperative that you list ALL household members on the policy if they are insured, uninsured, family members or away but still live at home.

Personal Injury Protection (PIP) is another coverage option to consider. It is a first pay medical regardless of fault. It will also pay lost wages, lost services, and a few other things.

When I have a client with a child away at school who isn't driving I always list them and add at least $10K of PIP.

If you have a client who you suspect isn't giving you the whole truth make them sign a short statement along with the application to disclose all licensed drivers and household members. The insurance carrier can still choose to deny or pay the claim but at least this COVERS YOUR BACKSIDE in case you're called into question for not asking them and/or your being sued.

You're lucky. If you had insured this client with Progressive, the carrier would have denied the claim. If the client pursued legal action it would have turned out bad for you.

If the agent knows about household members and fails to list them that's the agent's fault. If it's done on purpose shame on the agent. If it's done because of naivety, It's time for that agent to go BACK to CE school and get educated. (especially if they've been in the business for 10 years!)

 

[insurance1822]

thanks for the dissertation. In my situation, the kid "lived" in the town his school was. Paid rent at his own off campus apartment 365 days per year. He got a good lawyer & the company caved.

 

[txagt39]

You can subscribe to RealComp and look for undisclosed drivers, the cost is $27 month and worth it. It could become an E&O issue for you so why chance it. You can't catch it all but you will be at least uncovering the most obvious.

 

[insurance1822]

What's real comp? I meen...the carrier's do that anyway for us

 

[nyc2phi]

What's real comp? I meen...the carrier's do that anyway for us

I agree here. Most of the carriers have a prefill now which discloses potential drivers and vehicles however its the insured that's the issue.

"Does Johnny still live in the house"

"How did you know about my teen licensed son Johnny? No he moved out to his fathers.."