Insurance Agent Duty to Advise Insured

Does an insurance agent have a duty to advise an insured as to appropriate limits?

Answer: Oklahoma cases are not very good for holding the insurance agent to a duty to advise the insured to carry a larger (or smaller) amount of coverage. Here's a quote from a recent case, Cosper v. Farmers Ins. Co., 2013 OK CIV APP 78, __P.3d __: No liability of agent or company for insuring property for an excessive amount and charging excessive premiums except under 36 O.S. 4804, which requires a total loss to trigger provision:

¶8 Plaintiffs cite cases such as Swickey v. Silvey Co., 1999 OK CIV APP 48, 979 P.2d 266, holding that an agency has a duty to exercise reasonable care in performing its tasks such as procuring insurance and making any necessary corrections or adjustments after a policy is issued. Swickey, 1999 OK CIV APP 48, ¶13, 979 P.2d 266, 269. However, “[i]nsurance companies and their agents do not have a duty to advise an insured with respect to his insurance needs.” Rotan v. Farmers Ins. Group of Companies, 2004 OK CIV APP 11, ¶2, 83 P.3d 894, 895, citing Muegenborg v. Ellis, 2002 OK CIV APP 88, ¶6, 55 P.3d 452, 453. The Supreme Court has held an insurer was under no statutory duty to explain uninsured motorist coverage to its insureds. Silver v. Slusher, 1988 OK 53, ¶7, fn.11, 770 P.2d 878, 882.

The cases do hold that if an agent (or insurance company) does advise an insured, he or she must use reasonable care.