Under California law, consumers have rights against insurance agents and insurance brokers.

Read on to find out when both agents and brokers may be liable to policyholders.

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Insurance Agent Liability

Insurance agents may be liable to consumers in certain situations, including when:

  • An agent negligently or intentionally misrepresented insurance coverage offered or sold
  • An agent negligently failed to purchase a particular type of coverage or extent of coverage that the consumer specifically requested
  • An insurance loss followed from an agent’s negligent failure to disclose material information that a consumer requested

Insurance agents are not generally liable to consumers when an agent:

  • Is negligent in performing job duties on behalf of an insurance company
  • Fails to recommend additional coverage to a consumer
  • Fails to purchase additional coverage for a consumer without that consumer’s request
  • Fails to advise a consumer about the availability of additional coverage

However, while the consumer may not be able to sue the insurance agent for negligence, the consumer still can sue the insurance company.

Neither an insurance company or agent are generally liable for an agent’s failure to advise a consumer on the most appropriate coverage for the insured’s particular situation.

Insurance Broker Liability

Insurance brokers owe a duty of care to consumers. As a result, they may liable to consumers in situations when:

  • A broker obtains a policy whose coverage is not direct or clear and the consumer must pursue litigation to clarify coverage as a result
  • A broker misrepresents the nature, extent or scope of coverage
  • An insured specifically requests a particular type or extent of coverage and the broker fails to purchase it
  • A broker reduces coverage limits without an insured’s consent

However, like agents, brokers are not generally liable for failing to recommend adequate coverage. An exception to this rule is that a broker may be liable in certain circumstances for failing to provide adequate coverage when selling a property insurance policy.

Insurance brokers are not generally liable to consumers when a broker:

  • Fails to notify an insured of a canceled policy
  • Does not inform an insured about the financial stability of an insurance company before providing a policy from the insurer

Meet Our Team

Northern California Fire Lawyers is a coalition of prominent Northern California law firms: Corey, Luzaich, de Ghetaldi & Riddle, Danko Meredith, and Gibbs Law Group. Our firms consist of seasoned trial lawyers, leading national personal injury attorneys, and experienced complex litigators. Attorneys on our team have been appointed by California judges to serve in leadership positions in a number of large, coordinated fire and disaster cases. We bring a deep knowledge of the systems and fire-prevention policies of major utility companies and are well-positioned to leverage the hard work from our previous cases to benefit our clients.

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