Are you a homeowner or property manager in a dispute with your insurance company and unsure about your next steps? Many policyholders may think retaining a lawyer is the only path to resolution when an insurer fails to meet expectations. However, a Public Adjuster may be a better alternative.
With nearly $134 billion in homeowner’s insurance premiums written in 2022, policyholders have a big incentive to get the coverage they are paying for (National Association of Insurance Commissioners, 2022). At the same time, insurers faced a historic $16 billion loss in 2023, causing them to continuously look for ways to minimize claims or, in some cases, to exit high-risk markets (AM Best, 2024).
Amid this tension between carriers and homeowners, Public Adjusters play a vital role in the insurance claims process, acting as advocates for policyholders. These professionals are licensed experts who specialize in assessing property damage and negotiating with insurance companies on behalf of their clients. Their primary goal is to ensure that policyholders receive fair compensation for their losses.
Some policyholders hire a Public Adjuster as soon as a loss occurs and let them handle your claim from the beginning. Others turn to one when they believe a claim has been unfairly denied or undervalued. In either case, the Public Adjuster can review your case and negotiate with the insurer on your behalf. Their industry knowledge and experience can often lead to a more favorable outcome for the policyholder.
While Public Adjusters offer valuable services in the insurance claims process, it's crucial to understand their legal limitations. Public adjusters are not attorneys and cannot provide legal advice or represent you in court. Their role is primarily focused on assessing property damage, interpreting insurance policies, and negotiating claim settlements.
Most Public Adjusters are bound by state regulations and must adhere to specific guidelines in their practice. This includes the stipulation that they cannot engage in the unauthorized practice of law.
It's also worth noting that some states have restrictions on when Public Adjusters can contact policyholders after a disaster. These regulations are designed to protect vulnerable individuals from potential exploitation in the aftermath of a catastrophic event. The result is that it is the property owner’s responsibility to seek out the appropriate representative.
While a Public Adjuster is often the most cost-effective way to pursue a fair settlement with an insurer, there are some circumstances when a Lawyer specializing in insurance claims might be necessary. Insurance lawyers are equipped to handle complex legal issues that may arise during the claims process and are used increasingly. In 2022, 18,912 insurance cases were litigated in federal district courts, a 30% increase from the number of insurance cases the year before (Huang, 2023).
If your insurance dispute involves complex legal issues or multiple parties, a lawyer's expertise can be invaluable. For example, if your property damage was caused by a third party and involves potential liability claims, an attorney can navigate the complexities of dealing with multiple insurance companies and potential litigation.
Lawyers can also be beneficial in cases involving large-scale disasters or mass tort claims. In these situations, attorneys may be able to join your case with others in a class-action lawsuit, potentially increasing your chances of a favorable outcome.
When you hire an insurance lawyer, they can provide legal advice, interpret policy language, and assess whether your insurance company is acting in good faith. Lawyers can also help you understand your rights as a policyholder and advise you on the best course of action if your claim has been denied or undervalued.
Unlike a Public Adjuster, lawyers can initiate legal action if necessary. If negotiations with your insurance company reach an impasse, an attorney can file a lawsuit and represent you in court. This legal backing can often motivate insurance companies to offer fair settlements to avoid costly litigation.
Similarly to Public Adjusters, insurance lawyers may work on a contingency fee basis as well, meaning they only get paid if they win your case. This arrangement can make legal representation accessible to policyholders who might otherwise be unable to afford an attorney.
Deciding whether to hire a Public Adjuster or a lawyer for your insurance claim depends on various factors. Consider the complexity of your claim, the amount of money at stake, and the nature of your dispute with the insurance company. In some cases, you may benefit from working with both professionals at different stages of your claim.
Remember, while litigation increased 47% from 2017-2021, it’s not the only option at your disposal. Less than 1% of these cases end up in trial, so a negotiated settlement, whether by a lawyer or Public Adjuster, is the most likely outcome (Matusewicz & Freeman 2022).
If you're dealing with a straightforward property damage claim and need assistance with documentation and negotiation, a Public Adjuster may be your best option. On the other hand, if your dispute involves multiple parties or complex legal issues, consulting with an insurance lawyer may be the most appropriate course of action. You may also want to consult with both types of professionals to get a better understanding of your options.
You can start by connecting with Tiger Adjusters team to find out how we can help you return your property and your life back to normal.
Bibliography
National Association of Insurance Commissions (2022). State Insurance Regulation: Key Facts and Market Trends. Retrieved from: https://content.naic.org/sites/default/files/publications-key-facts-market-trends-texas.pdf
AM Best (2024, July 2). Best’s Special Report: US Property/Casualty Industry Suffered Second-Straight Year of $20 Billion-Plus Underwriting Losses in 2023. Retrieved from: https://news.ambest.com/newscontent.aspx?refnum=258762&altsrc=174
Huang, G. (2023, June 15). Lex Machina Releases its 2023 Insurance Litigation Report. Lex Machina. Retrieved from: https://lexmachina.com/blog/lex-machina-releases-its-2023-insurance-litigation-report/#:~:text=In%202022%2C%2018%2C912%20insurance%20cases,insurance%20cases%20the%20year%20before
Matusewicz, J. & Freeman, B. (2022, September 13) Emerging factors forecast a continued rise in insurance litigation. Propertycasulty360.com. Retrieved from: https://www.propertycasualty360.com/2022/09/13/emerging-factors-forecast-a-continued-rise-in-insurance-litigation/?slreturn=20240726151255
