Can You Sue Your Insurance Agent For Misrepresentation?

If your insurance company misrepresents their product, you can sue them. However, if your agent misrepresents the product, can you sue them? Generally, the answer is yes if you relied on information that he or she gave to you that resulted in a lack of coverage or no coverage at all. Unfortunately, proving misrepresentation can become a ‘he said / she said’ exercise in futility. The key is to avoid any type of misrepresentation by doing your homework.

Attorney Charles Surrano, a 30 year insurance practitioner from Arizona and member of the Advocate Law Group network, explains that there are two things insurers can do to protect themselves. “[Number one], make sure you’re dealing with a reputable agent. Number two, during the course of your conversations with the agent, ask questions. Do the thing that most policyholders refuse to do, take some time, review the policy, review the declarations page and ask the agent what the terms mean.

Likewise, if the agent is explaining a promise in the policy of a benefit that’s being provided and that representation is more explicit than what is contained in the policy, see if he will reduce it to writing and tell you what the policy means. At a minimum, make your own memorandum at the time of what the agent told you, so that later on, if you go to present a claim against the insurer, and the insurer says ‘That’s not what that provision provides’, you’ll be able to say, ‘You may be claiming that now, but at the time you sold me the policy, this is how it was represented to me. This is what the agent told me it means.’

Shop around for a reputable agent

Shopping around for a reputable agent will give you greater peace of mind. Surrano explained, “In shopping for insurance, it’s just as important to make sure you go to an agent that has a good reputation. You can ascertain that either from talking with people who have purchased insurance or general discourse in the community about what agents or agencies provide better services than others. In the long-run, the agent is the person who puts a face on the insurance company.

Dealing with an honest agent and one who’s forthcoming and knowledgeable will make you feel more comfortable about the insurance product that you’re purchasing –and you’re going to have fewer problems with the insurance company because of it.”

Case Studies: Misrepresentation by Insurance Agents

Case Study 1: John’s Home Insurance

John, a homeowner, approached an insurance agent to purchase a comprehensive home insurance policy. The agent assured him that the policy covered all possible damages to his property, including natural disasters. However, when John’s home was damaged in a severe storm, he discovered that the policy didn’t provide the coverage he was promised.

John decided to sue the insurance agent for misrepresentation, claiming that he had relied on the agent’s information and suffered financial loss as a result.

Case Study 2: Sarah’s Auto Insurance

Sarah, a car owner, sought an insurance agent’s assistance in selecting an auto insurance policy. The agent informed her that the policy included coverage for all types of accidents, including collisions and vandalism.

However, when Sarah’s car was vandalized, she found out that her policy didn’t cover such damages. Feeling deceived, Sarah decided to take legal action against the agent, alleging misrepresentation and seeking compensation for her losses.

Case Study 3: Mark’s Life Insurance

Mark was planning to purchase a life insurance policy to secure his family’s financial future. He consulted an insurance agent who presented him with a policy promising substantial returns and benefits for his loved ones. After purchasing the policy, Mark discovered that the actual benefits were significantly lower than what the agent had described.

Mark filed a lawsuit against the insurance agent, claiming misrepresentation and seeking damages for the discrepancy between the promised and actual benefits.