Communication situation
I always read Barry Zalma's “Down to Cases” columns as they usually are both concise and interesting. In his May article, “Cancellation to Litigation,” he wrote “the agent must have a system in place to personally contact an insured who fails to pay premium.” In teaching E&O courses, we always advised agents not to have such a process because:
- If you have a pattern of calling and you miss once, your goose is cooked if the policy lapses and a claim occurs
- It's a poor use of finite resources in an agency to constantly “babysit” insureds when they already have received written notice from the carrier
- It's dangerous to have categories where large clients are contacted but smaller ones aren't.
Do you have a response?
Philip Lieberman, CPCU, CLU
Caldwell, N.J.
Zalma response: Yes, that particular case involved a situation where the insured had changed his location and the notice of cancellation did not reach the insured because it went to the old address.
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