Why Do Prior Open Claims Matter?

[insurance1822]

So I'm pretty sure I'm going to fist fight an underwriter (again..) If I have an insured who has an open liability claim on their prior homeowner's, what the hell does the new carrier care? How could they get pulled into it? If I write the people, our new coverage wasn't in effect at the time of the loss, so what's the big freaking deal?

 

[nyc2phi]

So I'm pretty sure I'm going to fist fight an underwriter (again..) If I have an insured who has an open liability claim on their prior homeowner's, what the hell does the new carrier care? How could they get pulled into it? If I write the people, our new coverage wasn't in effect at the time of the loss, so what's the big freaking deal?

I'm sure the severity of the claim being unknown could be a issue for the carrier.

A liability claim with a payout of 10k compared to one at 100k could be a make or break deal for the underwriter accepting it as new business.

Are you sure it's still open? Sometimes it says it's open but you can get something in writing from the existing carrier saying it's been closed.

 

[bps]

Don't think they could be pulled into this claim, but it could be that a liability claim may not meet underwriting guidelines.

Also, you and the carrier are also underwriting the homeowner as well as the home. If this liability claim is for a dog bite for example, I can understand why the carrier would care.

 

[Indiana_Adam]

I would say ask the under writer or the company's area/sales manager. He/She should be able to give you a decent answer. I would use please and thank with a pleasant tone of voice. It works way better that way.

Maybe it's like getting into bed with someone who is in the process of getting divorced, but it isn't finalized. It seems like a great idea and lots of fun, but probably not worth it. Maybe that's a bad analogy.

 

[agentofintegrity]

Liability claims are also a HUGE red flag for potential fraud... It's like getting in bed with someone who is getting divorced but you can't see them... 99.9% of the population doesn't have an open liability claim; why waste energy on this one? Put them on follow up!

 

[djs]

The simple story is:
Open liability claims = attorneys are looking for deep pockets to line their pockets.

Attorneys looking for deep pockets means dragging anyone and everyone with a few nickels to rub together into the liability suit.

Your new carrier isn't on the hook, but the attorney will be trying anyway, hoping for a few $$$ to just go away.

Why take the chance? One piece of business isn't worth it, especially since if you take the 'no way this is a problem' thing, then you'll get roped into the ones that will be a problem. Easier to have a policy of 'no open liabillity claims' (or just no open claims).

Dan

 

[reedrhoden]

If the claim is still open then the payout could potentially still change. Without knowing the final outcome of the claim payment the underwriter can't effectively price the risk. Nothing to do with being in the hook for the open claim, everything to do with effective, disciplined underwriting.