Bad car insurance brokers, can you sue them

Bad car insurance brokers, can you sue them?

Can you sue your auto insurance broker because you didn’t get a good deal? It might seem like a frivolous question and it might very well be one. However I believe that it raises interesting questions that are worth analyzing. At least in the western world we live in a blame culture. Anything that goes wrong must have a culprit. If your operation goes wrong you sue your doctor, if the hot coffee burns your lips you sue Starbucks, if you trip over your own son in a shop you sue ToysRus. Why not go for insurance brokers also? I started thinking along these lines after reading an interesting case on the New York Times. The article related the story of Marty Ummel. Marty Ummel bought a 1.2 million dollar home following the advice of her broker who allegedly told her it was a great buy. Ms Ummel claims her broker misled her just to guarantee his commission of 30,000$. After a few weeks she saw how bigger and better houses than her own in the same neighborhood were sold for up to 175,00$ less.

What do you think? Does she have a case? It must be noted that the broker she is suing is a broker she hired to find her a house, he wasn’t the broker for the seller.

I like the argument that we are all responsible of our decisions especially when we spend 1.2 million dollars. However if it wasn’t Ms Ummel’s broker’s job to provide accurate valuation and advice, what exactly was his job. Obviously this issue is not restricted to Real Estate brokers.

When we enter a business or a sector we don’t understand we do well to hire the help and advice of “experts”. For instance if we are forced to go to court we hire a lawyer to speak for us. If he misrepresents us we can sue him. Why not with insurance brokers? One argument would be that house valuation is at best a moving target, there are not set parameters and is more of an art than a science. The argument being that law is a more stable representation sector and easier to assess correctly. Although trial lawyers that have to deal with juries might find an objection to that statement it is certainly true that both Real Estate and Insurance brokers have a difficult task.

Insurance brokers must provide accurate advice and help taking into account the lifestyle, habits, health and circumstances or the person or business that requires insurance. Balancing the statistics, probability theory and expectations of clients in an industry that protects what cannot be foreseen is no walk in the woods.

I believe that brokers that skim juicy commissions should be required to stand by their advice, however if that means they can’t be wrong they are going to have to pay a LOT of insurance themselves. The other lesson from this story is we do have some responsibility for our financial actions, which is why it is a good idea that you continue reading from this site to learn more about the world of auto insurance.