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Whose Fault Is It When Properties Are Underinsured?

The issue of underinsured properties returned to the forefront in the wake of the November 2007 California wildfires. Some state officials suggested the problem arose from a "lack of clarity" in

By Peter R. Kensicki | Updated on April 27, 2008

The issue of underinsured properties returned to the forefront in the wake of the November 2007 California wildfires. Some state officials suggested the problem arose from a “lack of clarity” in contract language and possible “bad advice” to consumers from agents and insurers. So we asked National Underwriter readers what producers and insurers should ethically do to have properties properly insured.

Very few responding believed there was no ethical responsibility for producers to offer advice as to insurance-to-value. On the other hand, no one claimed there was any legal duty to do so, either.

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