A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

In many ways, New York and New Jersey can be considered almost like two different parts of a single state, at least insofar as North Jersey is concerned. Just as two examples, many NYC commuters live in New Jersey, and the NYC TV stations feature news stories from the Garden State.

But when it comes to the law, the states have many differences, with New Jersey generally more favorable to consumers as opposed to business. This is especially true in how the states treat insurance agent and broker negligence.

Indeed, for those who felt the fury of Superstorm Sandy and suffered property damage, whether they lived in New York or New Jersey can make a big difference in their efforts to obtain a recovery.

For instance, say the insurance agent or broker failed to advise the insured about the availability of flood insurance or was otherwise negligent in providing advice and other services regarding the procurement of an insurance policy.

In New Jersey, the legal standard is that an insurance broker has to exercise good faith and reasonable skill in dealing with the insured. He is expected to have knowledge of the types of policies available and their terms. He may also even be expected to advise the insured of additional coverages that the insured should purchase. Put simply, the agent or broker is considered to be in a fiduciary relationship with the insured.

By contrast, in New York the insurance broker is considered to be more akin to an “order taker,” not charged with having a fiduciary duty to the insured. That means the agent or broker does not have to properly advise the insured regarding coverage, and really, is not charged with having in-depth knowledge of insurance policies.

Under this schema, generally, the agent or broker is only held negligent if he fails to obtain the requested policy. For instance, if the insured requests a $100,000 coverage amount, but only $50,000 is ordered, there would be negligence. Only if the insured can demonstrate that it had a “special relationship” with the agent or broker — which can require a sophisticated legal argument that there was a more in-depth and involved relationship — will the agent or broker be imputed with a greater measure of responsibility.

This is a general overview of the differences between New York and New Jersey when it comes to agent or broker negligence. Often, the devil is in the details, and a sophisticated legal analysis of the insurance transaction can make all the difference. It may seem arbitrary and unfair that a short geographic distance — say how long it takes a NY resident to cross over to the NJ border — can make such a big difference with respect to a person’s legal rights and remedies. But, well, that is the law ….

 

Leave a Reply