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Insurers May Be Liable for Inadequate Coverage Recommendations

Fri Sep 21st, 2018 on     Disability Insurance,    

In some insurance disputes — disability insurance disputes included — policyholders may be surprised to find that their coverage is actually inadequate to pay for their losses.  Insurance agents are not always scrupulous or comprehensive in explaining the terms of the policy that you purchased.  In an effort to make the sale, the insurance agent may be hesitant to explain the contours of such coverage and what benefits you are likely to obtain, and in fact, the insurance agent may recommend a policy that is fundamentally inadequate for your needs and preferences.

Fortunately, Florida law gives policyholders the right to sue and recover damages when the insurance company and/or their representatives have misrepresented aspects of the policy.

Let’s explore some of the basics.

Insurance Agents Have a Duty to Accurately Represent Coverage

In Florida, insurance companies and their various representatives — including insurance agents, of course — must clearly and accurately explain the terms of the policy that they’re selling.  They may not misrepresent any relevant aspect of the policy, such as the amount of coverage.  Whether the company representative misrepresented information to you depends on the circumstances of the case.

For example, if a simple statement made by the insurance agent would not have misled the average, reasonably prudent policyholder, then in all likelihood, the agent has not violated their duty and misrepresented information.  On the other hand, if the representative knew that your reasonable expectations of the policy were different than the actual terms of the policy, then they — and the insurance company, proper — could be found liable for the losses you suffered as a result of any subsequent inadequate coverage.

Remedies for Misrepresentation

If your insurer misrepresented coverage (through an insurance agent or otherwise — such as in an advertisement or other statement which fails to accurately clarify the terms of your disability insurance coverage and the extent of such coverage), then you may be entitled to a remedy for your losses.

For example, suppose that you sign up to a disability insurance plan and your insurance agent fails to clarify a somewhat complicated exception that applies to coverage.  The agent’s failure to fully and clearly explain the clause (so that you understand) would suffice as a misrepresentation.  Thus, even if you do not qualify for benefits pursuant to the actual plan terms, you could sue and recover those benefits in a court of law, as you purchased coverage on the basis of the misrepresentation.

It’s worth noting that your damages may exceed your losses under certain circumstances.  If the insurer acted in bad faith — in other words, with intentional disregard or malice — then the court may choose to award punitive damages, which are calculated as a multiple (i.e., three or four times) of the actual, compensable losses.  What begins as a $50,000 case may therefore result in damages of $200,000 or more.

Arrange a Meeting With One of Our Experienced Miami Disability Insurance Lawyers

Here at Ver Ploeg & Lumpkin, P.A., we have decades of experience representing disability claimants in a range of disputes against their insurance carriers, including those that involve an insurance agent’s misrepresentation of coverage (or simple failure to explain the terms of the policy).

We are committed to the provision of comprehensive, thoughtful, and relentless legal advocacy on behalf of our clients — as such, from the very beginning of engagement with a client, we focus on developing a close relationship that reflects a more collaborative effort towards obtaining benefits.  It is our belief that by personally tailoring the case to your circumstances, we can more effectively argue in your favor.

If you’d like to speak with a qualified attorney for more information about your claims and how to proceed, we encourage you to call (305) 577-3996 or request an appointment online to connect to one of our experienced Miami disability insurance lawyers.

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