An insurance agent was not liable for failing to advise the insureds of a cheaper flood policy for their two properties. Green v. Guidry, 2012 U.S. Dist. LEXIS 162581 (E.D. La. Nov. 14, 2012).

   The insureds owned two residences purchased in 1991 and 2006. They purchased flood insurance through an Allstate agent, Ronald Guidry. When Guidry wrote the policies, he allegedly knowingly mis-zoned the properties, which resulted in substantially higher annual premiums than the insureds should have paid and higher commissions to Guidry.

   The insureds claimed that Guidry owed them a fiduciary duty in placing and maintaining their flood insurance coverage. They reasonably relied on Guidry's expertise and recommendations. But Guidry failed to inform the insureds that they were eligible for a preferred Risk Policy ("PRP"), which could provide them with the maximum policy limits for less than their exisitng premium payments.

   The District Court granted summary judgment to Guidry. First, he owed no duty to inform the insureds of their eligibility for a PRP. Second, the insureds had no evidence that Guidry mis-zoned their property. Instead, their fraud claim was predicated upon Guidry's silence and failure to offer the insureds a PRP.

   But Guidry had no duty to review the insureds' policy and determine that they could obtain maximum coverage for a lesser price based on their eligibility for a PRP. Therefore, Guidry was entitled to judgment as a matter of law in the insureds' fraud claim.

   Nor did Guidry violate the Louisiana Unfair Trade Practices Act. Guidry acted consistent with his duties as an insurance agent. He had no duty to inform the insureds that they qualified for a PRP. Even if he did, this was not the sort of egregious conduct that rose to a violation of the Unfair Trade Practices Act.

   Regarding the negligence claim, where there was an agreement to procure insurance, the insurance broker's duty was analogous to the duty of the agent. The insurance agent owed a duty of reasonable diligence that was fulfilled when the agent procured the requested insurance. Guidry, however, did not owe a duty to advise the insureds of the correct type of coverage, and thus no duty to inform them of their eligibility for a PRP. Instead, the insureds were charged with knowledge of the existence of the PRP.