Conn. Supreme Court clarifies broker duties on nonrenewal: What producers need to know

In a significant decision for Connecticut insurance professionals, the Connecticut Supreme Court has clarified the obligations of insurance brokers regarding policy nonrenewal notifications. The ruling in Deer v. National General Insurance Co., offers new guidance on a question that has long vexed producers: What, if any, duty does a broker have to notify clients when their homeowners insurance policy is not renewed?

The facts

Lee and Keleen Deer purchased a homeowners insurance policy through broker Kevin Trahan and his firm, The Trahan Agency Inc. The policy, underwritten by Century-National Insurance Co., provided the specific amount of $361,442 in coverage from June 27, 2019, to June 27, 2020. After an inspection revealed missing exterior siding, Century-National requested repairs be made and proof of the repairs by March 27, 2020. When the insurer did not receive the requested documentation, it opted not to renew the policy and issued a nonrenewal notice via certified mail.

Despite several delivery attempts, the Deers claimed they never received the notice. Their policy expired, and only weeks later, their home was destroyed by fire—resulting in a denied claim and a subsequent lawsuit against both the insurer and the broker.

The core legal quandary

The heart of the case: Was the broker legally required to notify the Deers that their homeowners policy would not be renewed? The plaintiffs argued that their long relationship—nearly two decades—with Trahan and a history of trusting his expertise meant he had a duty to keep their insurance correct, active and up to date—including alerting them to a nonrenewal.

However, the defense cited Connecticut law (typically a good strategy in a lawsuit), which makes clear that a broker’s obligations typically end upon placing the policy—unless there is a specific agreement or assurance regarding renewals.

The court’s reasoning

The Supreme Court affirmed the ruling of the lower courts and found for the broker. The ruling emphasized that, in Connecticut, the duty to notify an insured of nonrenewal rests with the insurer, not the broker, absent a special agreement or course of conduct.

The court reviewed the evidence—including emails, conversations, and the overall broker-client relationship—and found no promise, written or verbal, that Trahan would handle renewals or send out nonrenewal notifications.

Simply maintaining a longstanding relationship isn’t enough to create additional legal obligations. The court noted that, in fact, the Deers had not used Trahan for two years before returning as clients, and the relationship did not create a heightened duty under Connecticut law.

When does a broker’s duty extend to renewals?

The Supreme Court’s ruling does leave the door open for exceptions. If a broker expressly agrees to assist with renewals or provides specific advice or assurances about a policy’s status, that broker might incur further obligations. Such circumstances would need to be clear and well-documented, however. In the Deers’ case, no such agreement existed.

Implications for producers

This decision has direct consequences for insurance producers, which includes the following:

Clarified duties. Brokers in Connecticut are not automatically responsible to notify clients of policy nonrenewals unless they’ve made a specific promise or have acted in a way that creates such a duty.

Documentation matters. Producers should be mindful of the promises they make—verbally and in writing. Clear documentation can help avoid misunderstandings about policy servicing responsibilities.

Client education. Encourage clients to read all correspondence from their insurers carefully, and to keep their contact information up to date. Direct clients to expect official nonrenewal notices from carriers—not necessarily from brokers.

Beware of “special relationships.” If producers have provided ongoing renewal services or specific assurances in the past, they may inadvertently expand their legal duties. Make sure the scope of service is defined clearly.

Impact outside of the Nutmeg State 

While this ruling directly affects insurance producers in Connecticut, it raises an important question: How might this issue be handled in other states? Each state sets its own standards for the duties insurance producers owe their clients. Despite these differences, most states follow what’s called the “order taker” standard. This means a broker’s main responsibility is to obtain the insurance requested by the client or to clearly explain if that coverage can’t be secured—nothing more.

However, many order-taker states do recognize that brokers may owe greater responsibilities if a special relationship exists.

Courts consider factors like advisory services, the length of the relationship and whether the client relied on the broker’s expertise. It is really the consistency in which courts find a special relationship that is telling. For example, courts in New York and Vermont rarely find that such a special relationship exists, so their rulings would likely mirror the Connecticut Supreme Court’s decision.

Usually, New Hampshire aligns with New York and Vermont but, in a 2020 case, its Supreme Court confirmed that a special relationship can arise based on factors such as a clear agreement, longstanding history, extra compensation or reliance on expert advice.

On the other hand, New Jersey is less predictable. Technically, it also follows the order-taker standard, but its courts are more likely to find a special relationship, often applying inconsistent standards. This inconsistency has become a point of frustration for many individuals in the state and is one reason why PIANJ is advocating for clearer legal protections for insurance producers.

Vital reminder

Ultimately, Deer v. National General Insurance Co., serves as a vital reminder for both insurance brokers and their clients in Connecticut: clarity in roles and expectations is paramount. While brokers may foster trust and build lasting relationships, their legal responsibilities remain largely defined by statute, common law and the explicit terms of their engagement.

As insurance landscapes evolve, this decision provides a clear foundation for navigating the delicate balance between professional goodwill and legal obligation.