There is a battle going on between insurance agents and financial institutions over what is acceptable proof of insurance and what is not. Agents want to use the Acord forms and Financial Institutions can’t accept them because they aren’t binding. One agent told a banker that he wasn’t going to play those games anymore …I guess we’ll keep playing without him because when banks are asking for proof of insurance they don’t want a “it-may-be-true-but-don’t-hold-us-to-it” document. If the Acord forms were equally binding, or a reliably accurate representation of a binding policy we wouldn’t be having this discussion…but here we are….so let’s continue….
Let me just say, this isn’t about condominium association policies…those are handled differently and are not a part of this discussion, maybe we’ll talk about those later but hopefully not…there are far more interesting topics to explore.
There is a place for the Acord form but it’s being used more often than it should be. We accept them but don’t like them for a very good reason. The number one reason is why can’t we get a copy of the Declarations Page? If the financial institution is listed on the policy then we should have gotten a copy, so why didn’t we? It’s a red flag and one that doesn’t get fixed by getting an Acord form…I still want to know what the Declarations Page says. Here are some other red flags around Acord forms:
New Verbiage: The Acord 27 Evidence of Property Insurance used to state “…CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.” which is why it was grudgingly considered acceptable documentation. However, it now states “…INFORMATION ONLY AND CONFERS NO RIGHTS…” The original document conferred rights, i.e. was binding, and the new document specifically states that it confers no rights. The purpose of a document that confers no rights escapes me…
Manually Generated Forms: If an agent intends to make a change on a policy they can represent that intended change on an acord form whether or not any change request has been, or will ever be submitted to the insurer. I have received Acord forms that represent a change that should have been made but never got done. When pressed, the agent wants you to accept yet another Acord form which represents yet another intention to change the policy. It is safer and more prudent to wait for the change to be reflected on the Declarations Page. If the agent knows you require the change to be reflected on the Declarations Page they are not only more likely to follow through with the request but will expedite the process.
Human Error. Human error occurs even on a Declarations Page but they are automatically generated documents which accurately reflect the policy as it was written. An Acord form is a manually generated document and the possibility of human error is far greater.
I understand how convenient Acord forms are but they simply do not fill the need to track proof of insurance in the same way a Declarations Page does…bottom line – I’d rather have a Declarations Page and if you send me an Acord form I’m going to take it with a grain of salt…