Agent may be liable for inadequate insurance
In an unpublished case, the Oklahoma Court of Civil appeals reversed summary judgment in favor of an insurance agent who allegedly failed to properly estimate replacement cost coverage. The insureds had purchased replacement cost coverage, but the coverage was limited to a certain dollar amount. That limit turned out to be about half the actual replacement cost required after a tornado destroyed farm buildings. The insureds claimed that the agent was negligent in failing to follow replacement cost estimating standards. The Court of Civil Appeals said that generally, the insurance agency and the insurer do not have a duty to advise an insured with respect to insurance needs, but on the other hand, an insurance agency has a duty to exercise reasonable care and skill in performing its tasks. The breach of this duty with accompanying injury establishes a claim for negligence.
Since there was a fact question as to whether the acts were negligent and caused damage, summary judgment was not proper, and summary judgment for the agent and insurer was reversed.
Rehearing has been sought on this ruling.
Runyon v. Goetz Insurors, Case No. 106013
