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  1. #1
    Join Date
    Sep 2016
    Posts
    2

    Default Error by Insurance Agent in Obtaining Home Insurance Coverage

    My question involves insurance law for the state of: Texas-Homeowner's insurance

    I had a catastrophic fire. The adjuster took an initial inventory of large items, and issued a 1st check based on replacement cost coverage. Six months later, and many hours of work later we were still documenting loss. Our adjuster called ind informed us that we did not have replacement cost, only depreciated cost.
    An error and omissions claim was filed. The agent, with our permission changed our carrier at renewal, with the understanding that we did maintain the same coverage or better. In oversight, the Agent failed to include replacement cost.

    What can I claim or recover on an Omission and Error's policy?

  2. #2
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Errors and Ommission

    The value of the error or ommission. In other words; the difference between what your insurance pays you and what you would have recieve had the policy been written as you agreed to.

    But before you get there;

    you were sent a copy of your new policy, correct? Did you read it? If so you should have discovered the claimed error.

    What does the agent say about your argument?

  3. #3
    Join Date
    Sep 2016
    Posts
    2

    Default Re: Errors and Ommission

    Quote Quoting jk
    View Post
    The value of the error or ommission. In other words; the difference between what your insurance pays you and what you would have recieve had the policy been written as you agreed to.

    But before you get there;

    you were sent a copy of your new policy, correct? Did you read it? If so you should have discovered the claimed error.

    What does the agent say about your argument?
    I have old policy with replacement cost and new policy without replacement cost. Understanding was to not decrease any coverage on new policy. Agent was shocked that policy did not include replacement cost and said they wanted to make it right.

    I think the biggest question you have answered...the value of error or omission. My issue is time.. The amount of time that it takes to document for replacement cost vs depreciated value (weeks). Replacement only requires cost of replacement. Depreciated requires purchase year and original cost. Two big time differences for documentation.

    Thanks for your input

  4. #4
    Join Date
    Mar 2013
    Posts
    17,923

    Default Re: Errors and Ommission

    Quote Quoting Lorenw5
    View Post
    I have old policy with replacement cost and new policy without replacement cost. Understanding was to not decrease any coverage on new policy. Agent was shocked that policy did not include replacement cost and said they wanted to make it right.
    Any time anybody says "It was my understanding" or "It was understood" that "understanding" is often in that person's mind and not evidenced by any written communication or provable oral communication.

    However, you are right that the agent had a duty to replace the policy with one of like coverage and a duty to be aware of the differences and advise you of same.

    On the other hand, JK is also right in alluding to your duty to read and understand your policy upon receipt of the policy, especially with such an easily discerned defect.

    There are way too many Texas appellate cases involving both views to analyze here. Suffice to say that Texas appellate courts have imputed that duty to the agent but have also alluded to the contributory negligence of the policyholder in failing to review his or her own policy.

    Quote Quoting Lorenw5
    View Post
    I think the biggest question you have answered...the value of error or omission. My issue is time.. The amount of time that it takes to document for replacement cost vs depreciated value (weeks). Replacement only requires cost of replacement. Depreciated requires purchase year and original cost. Two big time differences for documentation.
    Your potential compensation has nothing to do with the time you spent putting your claim together so you can forget getting any more money than the difference between your ACV and RC.

    Replacement only requires cost of replacement.
    Actually you are likely wrong about that. Replacement Cost coverage on personal property generally allows an insurance company to pay the ACV up front and then pay the balance when the items are actually replaced so you likely would had to have done the same amount of work one way or the other.

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