Both parties in the transaction must communicate fully and honestly. Holding back pertinent information or answering questions incorrectly may prevent a future claim from being paid.
If the answer to a question is not fully understood by either party, ask for clarification and/or for an example until the answer provided becomes clear.
Financial advisors must recognize that everyone plays an important part when insurance is purchased and that your clients need to be informed and educated decision-makers. As insureds, they must embrace their responsibility to have a general understanding of insurance coverages and to recognize potential problems associated with the limits of insurance that they choose. It is also important that they ascertain whether coverages and limits of insurance requested have in fact been delivered by reviewing their issued insurance policies. If unwilling or unable to meet their duties in this regard, your clients should seek assistance from other professionals, such as insurance consultants, who can help them meet their duties and responsibilities in the insurance buying process.
A final word of caution: Differences in insurance agent duties and responsibilities can exist based on a variety of factors, including variances in state laws and your specific situation. Therefore, please consult with your attorney if you have questions in this important area.
Kevin L. Glaser, CPCU, CIC, SCLA, ARM, AAI, AIC, ARM-P, AIS, is a nationally recognized speaker on the topics of insurance and risk management and the president of Risk & Insurance Services Consulting LLC and Right Side Creations LLC. Glaser is also the author of Inside the Insurance Industry—3rd Edition.