Ethics in Insurance

March is National Ethics Awareness Month.  This is a good time to understand just what is ethics and how it might relate to insurance.

 

What is ethics as it relates to insurance

What is ethics?

According to the Merriam-Webster dictionary, the definition of ethics is ""the discipline of dealing with what is good and bad with moral duty and obligation."  

According to the National Alliance for Insurance Education & Research, "Ethics may be defined as a system of moral principals or values."  

Ethics are part of the licensed insurance professional's requirement

Ethics is very important in the insurance world.  As a matter of fact, in Massachusetts licensed insurance professionals are required to take 3 continuing education credit hours on the subject of ethics every 3 years.  

Why must insurance agents be ethical?

Having high moral principals and values are not only the right thing to to, in many instances, it is also the law.   Each state has different laws as it pertains to insurance however the intent is the same:  to protect consumers from any unprincipled practices of insurance agents, companies, and adjusters.  These laws deal with issues such as:

  • Who is qualified to do business (licensing)
  • Rebating (illegal in most states including MA)
  • Disparagement of a competitor
  • Unfair business practices
  • Advertising practices
  • Privacy of consumer information
  • Unfair claims practices
  • more

The good faith business

Insurance is a business of utmost good faith and sharing of accurate information.  Questions are asked, and information is provided.  Honesty is required from all parties involved.  The individual or the business owner expects that the insurance company will pay for what the policy says it will pay for.  At the same time, the insurance company is relying that accurate information is being provided by the customer and that any change to that information will be reported.  Utmost good faith is broken by false or misleading information, incomplete answers, and by unfair business practices.  

Here at Elliot Whittier Insurance, we take our ethical obligations seriously.  Please take a moment to read our Mission & Principles statement.

 

What to do Next?

Have us review your insurance policies and check that your limits are sufficient. Ask what the cost is to bump it up under higher limit scenarios.

Call today 617-846-5000 or click here 24/7/365 and we will get back to you same day or the next business day