Are You A Victim Of Twisting?

Sunday, October 20, 2013


What exactly is twisting? Twisting occurs when an insurance agent or broker convinces someone to switch insurance coverage under false pretenses. Most states have laws or regulations that include language like this:

(A)       A person shall not make any statement that is known, or should have been known, to be a misrepresentation

(1)       to any other person for the purpose of inducing, or tending to induce, such other person either to take out a policy of insurance, or to refuse to accept a policy issued upon an application therefore and instead take out any policy in another insurer, or

(2)       to a policyholder in any insurer for the purpose of inducing or tending to induce him or her to lapse, forfeit or surrender his or her insurance therein.

(B)       A person shall not make any representation or comparison of insurers or policies to an insured which is misleading, for the purpose of inducing or tending to induce him or her to lapse, forfeit, change or surrender his or her insurance, whether on a temporary or permanent plan.

What are the consequences to an insured that has been a victim of twisting? There may be very significant impacts like loss of prior acts (retro) coverage, ending up with a carrier with a much lower credit rating/claims paying ability, paying extra (double) commissions if you switch prior to the end of your current policy term, and owning a policy which has gaps in the coverage necessary to really protect you, your family, and your business.

In conclusion, beware the E&O insurance agent or broker who seeks to have you terminate and/or switch your current policy to a new policy and only talks about price or how bad your current agent or broker is.

If you believe you are a victim of twisting, call your state’s department of insurance and ask what your rights are and how to file a complaint against the agent or broker in question. 


Brian Trotier, FREABrian L. Trotier, JD, is the Executive Vice President and Chief Operating Officer of FREA and a former practicing attorney with more than 30 years experience in real estate and risk management.


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