By: AgencyEquity.com
A Connecticut property owner repeatedly asked his insurance agent to renew his flood insurance policy. After the policy expired and the mortgage holder force-placed coverage, the insured sued the agent.
The court’s opinion is unclear as to what happened. For 22 years, the insured had purchased a flood insurance policy issued by a specific carrier under the National Flood Insurance Program’s (NFIP’s) Write Your Own program. This is a program under which private insurers issue, renew, and service flood policies on the NFIP’s behalf, with the NFIP covering the losses and paying the insurers for the service work.
As the September 2022 expiration date of the policy approached, the insured contacted the agent multiple times, asking him to have it renewed. More than a week after the expiration date, the insured’s mortgage company notified him that it had not received a renewal of the policy. The insured contacted the agent again. The NFIP permits insureds a grace period to renew policies without lapse if they pay the premium by a certain deadline.
The agent “assured” his client that he could “easily” renew the policy, and he promised to do so. However, he did not. The mortgage company force-placed a replacement policy and billed the insured for the premium. In addition to the premiums, he claimed that he suffered other monetary damages, though the court’s opinion did not specify either the nature of those damages or the total amount he sought to recover. The opinion described them as “modest, though identifiable.”
He sued the carrier and the agent, though he eventually agreed to dismiss the suit against the carrier. He sued the agent on six counts, among them negligence, malpractice, bad faith, breach of contract, and violations of state laws. The agent asked the court to dismiss all but the breach of contract count. The opinion did not say why the agent did not seek dismissal of that count. He argued that the federal National Flood Insurance Act prevented the insured from recovering from him.
In March 2025, the judge dismissed three of the counts but left the other two intact. She agreed that federal regulations did not prevent the insured from seeking recovery based on an agent’s error in procuring coverage. She also ruled that the agent was not the insured’s fiduciary, that the insured did not demonstrate a violation of the laws, and that the law did not permit bad faith claims against agents.
Moreover, she found problems with the insured’s other claims. She wrote that the malpractice claim was a duplicate of the negligence claim and was therefore redundant. Further, even though the agent was not yet contesting the breach of contract claim, she noted that the insured did not “allege the existence of any contract, written or oral, between himself and Defendant.” She described these problems as “deficiencies” that needed to be addressed before a trial could proceed.
Based on the judge’s tone, it sounds like the negligence claim was the only one that might succeed. No further public record exists regarding this matter, so the two sides have probably reached a settlement or are negotiating one.
Giving the agent the benefit of the doubt, the only potential explanation for this failure to request a policy renewal is sloppiness. Perhaps he got behind on processing or received a sudden influx of new applications that overwhelmed the office. This incident did occur in September 2022 during the hard market when many people were shopping for replacement coverage.
His workload was not his insured’s problem, however. The insured requested the renewal several times, the agent promised to obtain it, and he did not follow through. Other types of policies require the insurer to provide a non-renewal notice to the insured, but not an NFIP policy. This agent is fortunate that there was not an uninsured loss. The consequences would have been far worse otherwise.
