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With Autonomous Vehicles Here, Will Insurers Resort to Misrepresenting Benefits of Limited Usage Policies


As you might expect, with the rise of autonomous vehicles, insurance premiums for automobiles may decrease as vehicles get safer and less car wrecks take place. However, insurance companies won’t simply decide that they should just make less money in the future. A recent article in the Harvard Business Review provided some suggestions on what products insurance companies might feature as safer driverless cars become more prominent. The article suggests that cyber security, product liability, and infrastructure insurance could be increased. However, the truth is that we don’t know what “pitches” are going to be successful; the insurance companies may not know yet either. But as more complex insurance products for a wider variety of risk become commonplace, the risk of insurance providers engaging in misrepresentations as part of their “pitch” to prospective customers increases dramatically.

Most people selling insurance have a very specific script that they are allowed to utilize in presenting insurance products to customers. Remarks that seem very casual and off-the-cuff are usually scripted and prepared. Salesmen have to try to ‘translate’ very complex policies into ‘plain-English’ and sometimes short-cuts are taken. We’ve even had cases where part of the pitch was that there was “no downside” to the policy. As you might expect, that wasn’t necessarily true.

North Carolina law prohibits individuals presenting insurance products from making any misrepresentation regarding the terms of the policy, or the benefits or advantages promised by a policy. Any misrepresentation is deemed to be a per se violation of North Carolina’s laws prohibiting unfair and deceptive trade practices. This is a strict liability statute and does not require intent to deceive.

So what does this mean? It’s certainly fair to question whether large corporation insurance companies step over the line to boost revenue when cars are getting safer and safer and their flagship product may be going out of business. If you have purchased insurance featuring “new products” or “new threats” understand that there are laws that protect you if you were misled into purchasing an unnecessary insurance product. If you can prove a misstatement, it might allow you to recover damages and recover your attorney fees. Our firm is also willing to consider insurance misrepresentation cases on a contingency basis, meaning you would not pay any attorney fees unless you were successful. You can email us at info@maginnislaw.com or visit our contact page to schedule a time to speak with one of our lawyers. We look forward to helping you.

If you are interested in other areas of consumer protection law, feel free to sign up for our mailing list or take our consumer rights survey to take two minutes to see if there are other issues we can help you with.

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