procuring insurance lawyer, lawyer, insurance, legal property, damage, bad faith

PROCURING INSURANCE AND ORDERING FOOD AT A DINER AREN’T THAT DIFFERENT…..

When discussing the concept of insurance broker negligence and failure to procure insurance in New York, the discussion usually starts with talks of visiting a doctor or lawyer. When we go to the doctor, we hop onto the table with the understanding and hope that the doctor will examine us and tell us what we need, tell us what is wrong (hopefully nothing at all), and tell us how best to treat whatever ails us. When we see a lawyer, we expect the lawyer to evaluate a situation and advise us as to the best way to approach it.

In New York, many people believe that their consultation with their insurance broker isn’t much different. It certainly isn’t unreasonable for a person to meet with their insurance broker and naturally feel as though they are consulting with a professional, and that professional will evaluate their insurance situation and advise them as to the best route to take and what insurance they need. In many states this may be correct, however, in New York, it is far from the case.

In New York, as far as the law is concerned, an insurance broker is not much different than the waiter at a Long Island diner. A waiter has expansive knowledge of the menu, some level of understanding as to how the dishes are prepared, and can advise you as to what the soup of the day is. A waiter at the diner can tell you if the chef would substitute fries for broccoli on any particular dish, and can let you know if they are all out of the special meatloaf of the day.

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In New York, an insurance broker is treated much the same way…as an “order taker.” In New York, an insurance broker doesn’t have the legal obligation to evaluate your situation and advise as to what coverages are best for you. In New York, an insurance broker has a legal obligation to procure the insurance policy that you request, and if they can’t do so, they have to let you know. In other words, you have to specifically request a particular type of insurance policy with particular types of coverages, and specific limits. Unless you make such specific requests regarding what property or liability coverage you are seeking, you have little recourse in terms of a broker negligence action and can’t turn to them in the event that you unexpectedly find yourself uninsured or underinsured for some casualty loss or catastrophe later on.

Most often we are consulted by those who advise that they requested “full coverage,” and were shocked that they weren’t “fully covered.” Once again, this is not much different from ordering at a typical diner. Asking for “full coverage” is like walking into a diner and telling the waiter to give you a “good meal”. While you may get something that satisfies your hunger, it is really their choice what to bring you. If the waiter brings you a burger and fries, you can’t complain that he didn’t bring you the filet of sole with a side of rice pudding. You didn’t ask for it… there was no “specific request.

Asking for a “homeowner’s policy” isn’t much different than asking for a “lunch special.” The waiter can bring you the meatloaf special, or the stuffed lobster special, or the gyro platter special… and regardless of what is delivered to the table, the waiter fulfilled his duties.

There are certain situations where this dynamic changes… particularized situations may give rise to what is often referred to as a “special relationship,” but these situations are particularized indeed. Brokers do have the ability to step outside their legal role as an “order taker” and assume additional duties and responsibilities, but that doesn’t happen in the most common and typical scenarios. Most often, people call their broker and simply tell them they need a “homeowner’s policy”, and at times like that they need to be reminded that all they did was order the lunch special.

It is very important to note that Greenblatt Agulnick works with many insurance brokers and considers those friends and colleagues incredibly knowledgable about honorable, and able to competently address issues ranging from underwriting to loss ratios to coverage issues. In our minds, those friends and colleagues are certainly “professionals.” However, in the eyes of the law, they are not. To turn back to our diner analogy, they know the menu inside and out, and know each recipe, and know where each ingredient was sourced. However, that doesn’t change the fact though that they are only legally obligated to get you what you ask for.

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For these reasons, it is essential to ask your broker as many questions as you need, so as to ensure that you know what is available, the coverages, the exclusions, co-insurance, deductibles, hurricane deductibles, flood coverage, additional living expenses, sewer backup, limits, and on and on. Only then can you make a proper decision as to what coverages to specifically request and only then can the insurance broker properly service your needs. Have a conversation about the menu, the ingredients, what is homemade and what is not, and most important, the size of the portions. Only then will you have the requisite knowledge to make that specific request and get the meal (or insurance policy) that fits your needs.