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No more Mr. Nice Guy: How you'll tick off your home insurance agent

The relationship between you and your home insurance agent can be an intimate one. Chances are good he or she knows things about you that even your best friend doesn’t know, such as what valuables you have and what they’re worth.

Even the breed of your dog is subject to scrutiny as your agent determines whether you are a good risk for liability coverage. Some home insurance companies have lists of breeds and crossbreeds they won’t insure because they are considered too aggressive. So don’t try to pass your pit bull off as a Labrador.

As well as he or she comes to know you, you'll never find out how strong your agent's friendship is until you file a claim that is rejected by your insurance company.

Tension over home insurance claims

angry manIn most cases, home insurance agents are able to maintain a delicate balance between being a client advocate and a loyal company representative. Things can get complicated if the insurer disputes your claim, however. In some cases, the person who provided so much help and guidance when you were looking to buy a policy may stop returning your phone calls.

Not all agents give their clients the cold shoulder when a homeowners insurance claim is disputed, but "it happens," says Kevin Foley, an independent agent in Milltown, N.J. "I've talked to people who say, 'My agent stopped returning my calls,' and that is a shame. When someone has a problem, you have an opportunity to shine. It wasn't you who denied the claim, it was the adjuster."

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Divided loyalties among insurance agents

Peter Moraga, spokesperson for the Insurance Information Network of California, says it's best to keep your expectations for insurance agent support in check. Agents can still provide assistance when a claim is rejected, but some may worry about appearing disloyal to the insurance company that pays their commissions.

Amy Bach, executive director of the United Policyholders consumer group, says some insurance agents are more helpful than others when claims are rejected or reduced.

"It depends on the personality of your agent," she explains. "If your agent is really loyal to you and uses his connections with the company to help you, you can continue to take advantage of that advocacy. One of the things that sets a good agent or broker apart is the willingness to fight for a client in a claim dispute. The good ones will."

Even agents who are willing to help likely will distance themselves when matters move into a courtroom. "Certainly, the reality is when a lawsuit is filed everybody retreats to their camp," Bach says.

Moraga agrees. Agents may start out as your advocate, "but once a lawsuit is filed, that changes completely."

Dishonest policyholders

Policyholders aren't the only ones who feel betrayed during the claims process. Your agent's loyalty to you may waiver if he or she believes you have filed a fraudulent claim, says Kevin M. Lynch, a longtime insurance agent who now works as an assistant professor of insurance for The American College, based in Bryn Mawr, Pa.

"You have a customer, you have a great relationship," he says. "He files a claim and the nature of the claim has a lot to do with how solid the relationship remains. There were occasions when I believed in my heart I was dealing with a fraudulent claim. People would call up after a hailstorm asking if they could get a new roof. I would ask, 'Did you sustain damage?' They said, 'I don't know, but everyone else in my neighborhood did.'"

Keeping their job

Sometimes insurance agents are caught between a genuine desire to counsel clients and their need to remain employed. The pressure exists for both independent agents and "captive agents" who work for a single company. Doug Heller, executive director of the Consumer Watchdog group, says independent agents who work for several insurance companies may be the most willing to provide help during a dispute. Even so, "at the end of the day the agent is legally tied to the company, not to the customer."

Lynch acknowledges that insurance agents "have to be careful" about how they intervene if a client's claim is rejected.

"Yes, you are going to advocate on behalf of your client, but you are an agent of the company," he says. "You have legal restrictions. You work with your ethical and moral code and do the best you can for folks in areas for which you have authority."

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