Peggy's insurance agent, Skip Towne, convinces her to replace her existing health insurance policy with one that he claims is better. Peggy tells him that she will be glad to replace the policy if the coverage provided under the new one is the same or better than that provided by the existing policy. Skip assures her that coverage is equal or better under the new contract, so she changes policies. Three months later, when she becomes pregnant, the insurer denies all her claims for benefits. At that time, Peggy learns that her new policy does not provide maternity benefits, although her previous policy did. Based on information contained in the text, who should Peggy hold legally responsible for her lack of coverage?
A) Skip Towne
B) Her new insurer
C) Her previous insurer
D) The government

Question

Quizplus · Accepted Answer

Peggy should hold her insurance agent, Skip Towne, legally responsible for her lack of coverage as he convinced her to replace her existing policy with false promises of equal or better coverage. It is the responsibility of the insurance agent to ensure that the client understands the terms and coverage of the new policy. The insurer may not be held responsible if the policy terms were clearly stated, and Peggy had the opportunity to review them before making the switch. The previous insurer and the government would not be responsible for Peggy's lack of coverage under the new policy.

Peggy's Insurance Agent, Skip Towne, Convinces Her to Replace Her