Question from IIABNY member:
Many of our clients, due to the rising cost of fuel, are purchasing wood/coal or pellet stoves to supplement their heating bill. We may have written their Homeowners policies for them several years ago in the most preferred pricing program. They may not be eligible for this program if they have a woodstove. If they send us information advising us that a woodstove has been installed, do we have to send it to the company? We called the company and they said we could just keep it on file unless we want them to make the change and rewrite the policy to a different program. I guess my question is, if there is a fire, can the company say the agent had this information and never advised them? Have you had any legal issues come up with this? This is not a hazard that would require the insurance company to cancel a policy; it would only increase the premium.
Probably the best thing for you to do is drop an e-mail to the underwriter confirming the conversation about the woodstove. You might even add a line to the effect of, “We are not requesting a re-write at this time,” or something like that. This will give you documentation that you informed the company of the change in exposure. It then becomes the company’s responsibility to decide about changing the pricing. This gives you defense in the event of a coverage dispute and also meets your ethical obligations to the company. In fact, your agency contract may require you to inform the company of material changes in exposure, so you may have a legal obligation as well