Who is responsible for making sure we have the right policy?

Question

We bought an insurance policy for our property through an insurance broker. We received significant hail damage from the May 9th, 2017 hail storm in Denver, CO. We have been very patient in allowing the process to work itself out. SafeCo is telling us we didn’t have the appropriate policy for our property and they aren’t going to cover a claim of over $15,000 in damages on the 2nd building on the property. They are pointing us back to the original insurance broker for writing an incorrect policy.

We aren’t getting anywhere with the original insurance broker.

Does the insurance broker have an agency responsibility to make sure they are writing us the appropriate policy?

The mistake is that they wrote the policy as a 4-plex instead of the property being 2 duplexes. Because there are different buildings with different addresses SafeCo is saying they aren’t on the hook but we should go after the broker.

What are our options? Do we have any recourse in this type of situation?

Jason Bott · Answer

@Bill S. and @Jared Bouzek the 2 policies is not the defining issue, but clarifying the are 2 separate buildings.

If you have a single parcel with 2 units, but 2 buildings, make sure that the policy is not written as a duplex, but building 1 and building #2.

Matt M. · Answer

Talk to the Division of Insurance. I'm was having a hell of a time with health insurance and brought the DOI in to help. It still isn't resolved, but they are cooperating now.

Jason Bott · Answer

@Shawn Loftis

Every agent has an Errors and Ommissions policy that will respond to mistakes made by the agent when issuing policies.

The agent should be doing 1 of 2 things,

1). offering to pay for the damage out of thier own pocket

2). Filing a claim with thier Errors and Ommisions insurance to get your claim covered.

If the agent refuses to do either one, then call the state commission or insurance.  They will locate the agents E&O policy and file directly on you behalf...and most likely issuing some citations for not acting in a professional manner.

Jared Bouzek · Answer

@Shawn Loftis I'm dealing with this exact scenario. I have a client purchasing a single family home with a separate ADU. The insurance company is requiring two separate policies. One to cover each building. As far as your question on who is liable, I agree with @Matt M. that you should speak with the Division of Insurance. If I can get away with posting a helpful link, it will be right here: https://www.colorado.gov/pacific/dora/ask-question-make-complaint-division-insurance

Bill S. · Answer

@Shawn Loftis wow, that is good information. I was always a bit leery when my agent made me get two policies on my duplex that is one house and a separate carriage house. Now I know he's right. Another route might be to get an public adjuster involved. They are third parties that you pay to argue your case with the insurance company adjusters. They know the rules and can help you win the game. They get paid but it's better than nothing.

Who is responsible for making sure we have the right policy?

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