Some Tennessee homeowners have been surprised to learn their policies won’t pay for flood damage and an attorney and lobbyist is warning insurance agents not to admit to any wrongdoing if clients confront them about the problem.
“Very important: DO NOT ADMIT TO DOING ANYTHING WRONG!!” a letter from Insurors of Tennessee general counsel Ashley Arnold read. The letter was sent to about 150 agents and advised them that they generally do not have an obligation to offer flood insurance.
“We suggest you respond to the client that they did not ask for flood coverage (if your records indicate that they or their lender did not make this request),” the letter reads.
At least 2,000 homes were damaged in Nashville alone and many more throughout Tennessee in flooding last month.
It also warns agents that their errors and omissions coverage — similar to malpractice insurance coverage for doctors — could be in jeopardy if they admit mistakes.
Arnold said in an e-mailed response to The Associated Press that the letter was sent after agents requested information on how to deal with questions about flood insurance.
She said that member agents immediately responded to the disaster by helping clients and neighbors file claims and seek assistance.
Nashville attorney David Raybin said he is considering suit challenging insurance agents, who have a duty to explain coverage options. Of the letter, he says, “It’s the same kind of advice I would give to a criminal client. It implies they’ve done something wrong.”
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