Tuesday, October 25, 2005

Broken Trust...

If you’ve been following my Battle with the Cylons, you know that one of my clients is in the midst of a major “issue” with one of my carriers. As an independent agent, I represent the carrier, but I work for my clients. This puts me in the unenviable position of balancing their sometimes competing interests. All things being equal, though, my first loyalty is to my client.
The insurance contract is unique: it is called a “unilateral” contract because almost all of the onus is on the company; in general, the insured’s responsibilities are to pay the premium and avoid filing fraudulent claims. It is also unique in that the client’s premium buys, not a new car or CD, but simply a “promise” to pay for some potential future event (a claim). That promise rests primarily on one thing: trust.
Trust is defined as “belief or confidence in the honesty, goodness, skill or safety of a person, organization or thing." What happens, then, to the equation when the party which has made that promise ceases to be trustworthy?
This is no simple question, by the way: my client has been insured with VID for almost three years, and almost $200,000 in premiums. That’s a lot of trust. VID, by refusing to yield on one simple procedural rule, has destroyed all that.
As I was explaining to the owner a short time ago, my own position is now put in question: When I present a proposal to a client (new or current), I have to believe that the carrier(s) I present are worthy of the trust which I would have my client put in them. Now, knowing that in the case of VID that trust is suspect, do I have an obligation to warn my other clients about the circumstances?
As you can probably tell, there has thus far been no resolution to the ongoing situation. And time is running out.
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