Challenging The (Insurance Claim) Status Quo
Should a policyholder have to pay out of pocket for their own experts, public adjusters and attorneys, just to get what they are owed when a carrier underpays a claim?
A recent hail damage claim in Texas has forced one policyholder to do just that. Read about the intimidation tactics the carrier’s lawyer used here.
In this case, the policyholder had to hire and pay out of pocket for a public adjuster, an appraiser and an attorney because the insurance carrier underpaid the claim by HUNDREDS of THOUSANDS of dollars. This was proved by the carrier’s expert on a second damage inspection.
Why should insurance premiums only be paid to allow a ONE-SIDED investigation? Fee-shifting laws could help prevent this from happening.
Should Fee-Shifting In Property Damage Claims Be Allowed?
In most states, if a carrier underpays a property damage claim and the policyholder has to hire a PA/expert/appraiser and/or attorney those fees are generally not ‘recoverable’. This means that if a carrier underpays a claim the policyholder is never really “whole” after the claim is paid and damage is repaired.
Not only is this unfair to policyholders, it creates an environment that is ripe for insurance carriers to underpay claims and drag out payments knowing that policyholders may not be able to afford to get what is rightfully theirs.
Fee-shifting requires the “loser” of a legal matter to pay for the legal costs of the winning party. This keeps the plaintiff whole and also create pressure to the opposing party to settle cases quickly and efficiently.
In most states, the laws require the policyholder to pay for their own experts and attorney’s fees even when the carrier is at fault. Some states, like Texas and Colorado, specific benefits can be awarded to policyholders when insurance carriers act in bad faith. In some states, like Florida, fee-shifting is allowed but that could change if new legislation is passed. (If you are a resident or policyholder in FL, please write your State Representatives).
Should insurance companies (who have a direct financial conflict of interest with their policyholders), have to pay for both THEIR adjuster/experts AND the consumers experts, if they underpay claim? We think that’s fair. Do you? Join in the conversation on Facebook and tell us your opinions.
