Public Adjusting or Appraisal

A RARE PRACTICE AREA AMONG COLORADO LAWYERS

Lawyers who are involved in the insurance industry tend to fall into two major camps – those who defend insurance companies and those who sue on behalf of policyholders. Who helps the other individuals who are touched by insurance claims, like the contractors, public adjusters, and appraisers? The Firm can help.

REPRESENTING PUBLIC ADJUSTERS IN COLORADO

Insurance companies have employees or specialized contractor adjusters to help adjust an insurance loss, determine the proper scope of work and price to return it to a pre-loss condition. Policyholders usually do not have someone like this on staff. So, to match the insurance company’s expertise, a policyholder will typically have to hire a public adjuster. This is a regulated profession in Colorado, so not just any person can do this.

Public Adjusters can find themselves in a difficult position in a complicated or prolonged insurance dispute, though. The policyholder may have to also hire a general contractor and an attorney. Each professional is going to charge a fee and need to be paid. The chain of command may get murky. Without diligent representation of its own, a public adjuster risks being sidelined by the others as the claim drags on or, worse, used as a scapegoat when the other parties want to settle but do not want to pay the agreed upon fee.

NAVIGATING THE LINE BETWEEN ADJUSTING AND ASSISTING

Since public adjusting is regulated, those without a license to adjust must tread carefully when helping an insured with any aspect of an insurance claim. Colorado law and industry practice have given rise to a large grey area in between providing facts to the carrier and adjusting the claim. Contractors or other professionals venture close or into this grey area. If your business does this, it would be very wise to contact a lawyer with specialty in this area of law, like the Firm. We can help advise your company what to do and what not to do to minimize your risks.

DEFENDING AGAINST BURDENSOME SUBPOENAS.

If a public adjuster is good at their job, they may eventually become a target for insurance companies. Even if the insurance companies do not view the public adjuster as an enemy to be fought, the fact remains that the adjuster might have a great deal of information related to the underlying claim. So, during policyholder lawsuits against the carrier, it is easy for the adjuster to be dragged in through discovery or subpoenas filed by the carrier. In these situations, the adjuster has rights. The subpoena must not impose an undue burden, for example. The Firm can help deal with these requests to help you properly respond, limit the scope of unreasonable subpoenas, get a more reasonable time for compliance, or even seek payment to defer the costs of compliance with the subpoena where appropriate.might

ENFORCING THE PUBLIC ADJUSTER’S LIENS AND RIGHT TO PAYMENT

In a perfect world, the policyholder and all professionals would cooperate and ensure everyone was paid as agreed. But, if the policyholder or his or her other professionals forget to pay the public adjuster and try to settle the claim anyway, be careful. Important rights that might be contained in your public adjusting contract, such as a right to be named on insurance payments, a right to collect a percentage of all such payments, or even a contractual lien over the insurance proceeds. Some of these rights may become superfluous if you do not act quickly.

POLICING THE APPRAISAL PROCESS

Many insurance policies contain an appraisal provision which provides a mechanism for valuing a claim. The specifics vary, of course, but these policies usually require those appointed to the appraisal panel to be at least independent and competent. The most important control that either party can exercise over the appraisal is ensuring that those appointed to the panel truly satisfy these conditions. If the appraiser is beholden to the insurance company, is he or she truly independent? If the umpire does not know how to appraise the claim independently, is he or she actually competent? Being careful about the appraisal panel at the outset is not just about ensuring a fair result. It is also about protecting the result from attacks afterwards. At this Firm, we have noticed an emerging trend among insurance company lawyers attacking appraisers, umpires, and policyholders after appraisal where they believe that the panel was not independent and competent. More care in the original makeup of the panel can help minimize this risk.