A new Arizona law should protect insurance agents in the state from frivolous malpractice suits related to auto policies.
The legislation was written in response to concern expressed by an agent’s association following an Arizona Supreme Court decision. The July 2015 case ruled in favor of a woman who got into an automobile accident with an uninsured driver, and then sued her agent for allegedly failing to inform her about uninsured motorists cover – despite the fact that she had signed a waiver.
The Independent Insurance Agents & Brokers of Arizona said the decision would unfairly expose agents to malpractice suits even if they inform their customers about uninsured and underinsured motorists coverage and have then sign a waiver acknowledging their rejection of the coverage.
While that waiver provides a “safe harbor” for insurance carriers, the Supreme Court wrote, it does not for agents.
The new law, House Bill 2129, corrects this loophole.
“An insurance producer that uses such a form in offering uninsured motorist coverage and confirming the selection of limits or rejection of coverage by a named insured or applicant satisfies the insurance producer’s standard of care in offering and explaining the nature and applicability of uninsured motorist coverage,” the law said.
“A named insured’s selection of limits or rejection of uninsured motorist coverage on a form approved by the director constitutes the final expression of the named insured’s decision to purchase or reject uninsured motorist coverage.”
The case was Wilks v. Manobianco.