Question:
I have been a P&C agent for only a few months. 3 weeks ago I wrote an auto policy for someone. When the insured gave me their credit card, I put the info in but for some reason did not actually charge it to the card. I thought that the policy was paid. 12 days later I received a call from our claims dept stating the the insured had been in an at-fault accident but policy was not paid. I called insured and pretended not to know about the claim. I asked her if her payment had cleared and she said no. I took the payment again over the phone. Just yesterday, I received another call from claims saying that they may deny claim because of no payment being made on policy at time of accident. When we write policies, and issue binders, they insured has insurance for 30 days. Does anyone think that this should be paid by insurance company? or will this be an E&O claim? any help would be greatly appreciated.
Answer:
Did you have binding authority with the carrier? If so, then yes the carrier will cover it. If not, then your E&O carrier will cover it, less your deductible.
Meanwhile, call your marketing rep with the carrier, tell them about the error, and put that payment through RIGHT NOW. Ask the marketing rep to intervene & help you out, as the intention was clear on this!
Note, just because you issue a binder, that does NOT mean you have binding authority with the carrier! You have to check your contract with them to verify your binding authority levels. But with the binding authority, and the copy of the binder, this should be pretty easy to straighten out.
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