La. Judge: Agents don’t have to counsel clients about coverage

May 30, 2008

The Gainesville Sun--May 29, 2008
The Associated Press

NEW ORLEANS – A federal judge says insurance companies don’t have to tell clients who buy the maximum federal flood insurance about additional coverage available from other companies.

U.S. District Judge Patricia Minaldi dismissed the Cameron Parish School Board’s lawsuit against State Farm Fire and Casualty Co. and agent Enos Derbonne.

State Farm paid the system’s $8 million in flood insurance.

The board says Rita did more than $26 million damage. It says State Farm knew it wanted the highest possible coverage, and should have explained how to get more.

Minaldi says that, since Hurricanes Katrina and Rita, federal courts have ruled that insurance agents don’t have any duty to identify clients’ needs and tell them if they are underinsured. Her ruling was handed down earlier this month.