A broker who assisted the insureds in procuring a homeowners policy had no duty to advise the insureds to secure additional flood coverage. Ring v. Meeker Sharkey Assocs., LLC, 2017 N.J. Super. Unpub. LEXIS 3458 (N.J. Super Ct. App. Div. Sept.26, 2017).
The insureds owned two beachfront properties that were located in a designated flood zone. They secured homeowners and flood insurance through Meeker's predecessor. Subsequently, Meeker became the insureds' homeowners insurance broker while Willis, N.A. was their flood insurance broker.
As part of the insureds' transfer of their homeowners policy, Meeker reviewed their insurance coverage. Meeker did not make any recommendation to the insureds about their need for excess flood insurance even though the difference between the coverage provided by their homeowners and flood policies combined left the insureds with a substantial gap in the event of a flood.The gap could have been covered by an excess flood policy. The insureds never asked Meeker about the availability of or need for flood insurance or excess flood insurance.
The insureds experienced a catastrophic loss in 2012 caused by Hurricane Sandy. Afterward, the insureds learned that their existing coverage would not cover the entire loss.
The insureds sued Meeker and Willis. The trial court determined that Meeker did not owe a duty to the insureds to determine their excess flood insurance needs and properly advise them, but a question of fact remained as to whether Willis had such a duty. The insureds settled their claim against Willis while the case was on appeal.
The insureds argued on appeal that Willis' role as broker for their flood insurance did not diminish Meeker's "fiduciary duty" to the insureds. The appellate court disagreed. The trial judge did not abuse his discretion when entering summary judgment in favor of Meeker.