Did you know that in many states policyholders have NO legal obligations to read a purchased insurance policy? Mississippi laws require insured’s to know terms of the policy which they rely on for protection regardless of whether or not the policy is read. Mississippi also has documents required by law in order to purchase a policy.
q Duty to Read Doctrine
q Implied Knowledge Doctrine
If suit is brought after the purchase of an insurance policy the claimants cannot:
1. Cite negligence
2. Claim Negligent misrepresentation
3. Claim Failure to procure coverage against agent
If more states had similar laws, E&O claims would then likely be lessened and agents could actually be more confident in writing a policy instead of spending so much time documenting to ensure that an E&O case is not filed against them. States should adapt criteria to reduce the chance of a lawsuit such as:
q Statement that insured knows policy document, policy terms, & has read policy or will read when received.
q Insured’s obligation to notify agent of mistakes.
Agents are in the business to help people, much of the work we do is to ensure the continued lifestyle of our client in the event of a loss. That goal can’t be accomplished if we have to diligently protect our practice from fraudulent or frivolous lawsuits because an insured does not understand their purchased policy. If both agent & insured educate themselves by knowing policy content then that practice should drastically reduce lawsuits.
