by Guest » Wed Jun 16, 2010 11:15 pm
My captive company is non renewing fire policies which are all DP-1. I recently purchased this book of business. Many customers only want the same coverage they have now which they have always been underinsured. Alot dont even have liability. I have a carrier we can write a DP-1 with same limited coverage. These are all tenant occupied. I quote the DP-3 with replacement cost and people dont want it because of the price. I have sold some DP-1 and I only quote them with the liability of course.
Most of these people have other lines with my agency and I dont want to lose them as customers.
I am concerned about my risk exposure. Does anyone have a sample disclaimer or hold harmless? Some states have an acord form for rejection of replacement, mine does not. or, even a disclaimer for rejecting an agents recomendation?
Thanks for your help.
Most of these people have other lines with my agency and I dont want to lose them as customers.
I am concerned about my risk exposure. Does anyone have a sample disclaimer or hold harmless? Some states have an acord form for rejection of replacement, mine does not. or, even a disclaimer for rejecting an agents recomendation?
Thanks for your help.
Posted: Thu Jun 17, 2010 05:07 am Post Subject:
Excellent question. Let me see if I can shed some light.
A DP1, frankly, is a terrible contract. The basic fire dwelling policy is not good and only offers basic protection...and I mean reeeeeeallly basic protection. I think my first question is this: Why do most of your clients have this contract in the first place? Are they really that cheap? While there is a difference in the premium, it's not hundreds of dollars and even a DP2 is a lot better coverage. You said that you bought this book of business and that you're a captive. That brings up a couple of other questions.
Depending on the purchase date and other things, do you feel that the carrier had an obligation to disclose to you that they were discontinuing the DP1 policy and were going to non-renew the policyholders? The reason I ask is that there's potential, slight as it is, that you might have some cause of action simply based on this. I'm not implying that this is something you want to, or should, do. Just pointing it out.
Next thought is this- how "captive" are you? Does your contract allow outside appointments? If so, and the DP1 biz is good and profitable, there are carriers that would willingly roll the book and depending on the premium volume and pay you handsomely for doing so. So....how big is the book of biz? What kind of experience do they have? Any losses?
In terms of any hold-harmless agreements and covenants not-to-sue, I really don't think you have anything to really worry about. Remember that it's the carrier that will be non-renewing them, not you. Nowhere in law that I am aware of can hold you liable for that simply because you didn't have the capacity to replace their coverage with another DP1. The fact that your clients are making a decision to not buy a better contract is solely their decision.
It's obvious that you're trying to protect your backside, and when considering a waiver/disclaimer/hold-harmless agreement, it's good that you recognize that it could cause some issues. Here's what I would suggest on that end: contact the carrier's legal department. They all have them and you should be able to get the contact info easily. Tell them of your situation and your need for the paperwork. They will usually have something that will fit your need on hand and readily available. If they balk at it, just tell them that you'll "draw up your own waiver" as "best that you can" and trust me- this will elicit a response. Remember- you are an agent of your company, and as such, you can put them at liability risk for something like this. They know this and it will semi-freak them out, which usually results in them giving you what you need.
I've done this more than once, and on one occasion, the insurer actually changed their mind on one particular decision just because I whined like a little girl about the "liability that I REFUSED TO TAKE ON just because THEY decided to make [sic] that decision."
Interesting...
InsTeacher 8)
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