Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

A former president of MAPIA, the Massachusetts Association of Public Insurance Adjusters, and a member of NAPIA, Theran has also worked with the Massachusetts Commissioners office regarding public adjuster standard contract form and licensing. In addition, he is a member of CAI, Condo Association, and IREM, Real Estate Management Association.

After discussing his practice and adjustment of claims in Massachusetts, I asked him to share a few success stories to illustrate how claims adjusting occurred in his area, and he sent me the following in an email:

1. Worked with an excellent Independent Adjuster to resolve a hail claim on a roof. Went back and forth to determine scope and price. Final settlement was 3.4 times the initial offer, but the negotiation was congenial and respectful—the way it should happen.
2. Settled another roof claim at ten times the initial offer. Damage was caused by icicles from a radio tower that punctured a flat, membrane roof 164 times. Plotted each hole to show the extent of the damage and convinced the insurer that claim was valid and that roof should be replaced.
3. Adjusted an explosion claim for a pharmaceutical company that was a startup with no profitable experience. Company could not have rebuilt the manufacturing plant in the same location. Would have taken two years to reopen in another location due to FDA permitting and they would have gone out of business. Spent a great deal of time with the company’s president to understand his business and arrive at a solution. Worked with the insurer to provide my client with the full amount of the BI/Extra Expense coverage available to enable them to buy a competitor, the only way they could have survived. It helped a great deal that the adjuster had a great deal of experience and had a reputation of being fair. He understood the problems and recommended payment.
4. Took an aerial photo of an apartment complex while roof was being removed and tarped over after Hurricane Rita. When a thunderstorm tore off the tarp and caused significant additional damage, the adjuster denied the claim on the basis that the tarp was inadequate. After I showed the photo (which proved that the tarp was secured properly) to the insurer’s attorneys at a settlement meeting, the claim was paid. (My Perry Mason moment.)

LESSONS LEARNED

I was really impressed with these success stories; in just a few short paragraphs there are lessons for every public adjuster to note.

Success Story 1
A compliment to an adversary? Very impressive. The independent adjuster is complimented in the first sentence as being “excellent” and the claim adjustment was respectful and congenial! Now, I am sure if you are a public adjuster reading this you are thinking—if my opposing side was excellent the claim would be too. However, I think it is important that the two sides did not agree at the onset. Something had to happen to get to the final favorable agreement. I think it was reached because each side presented the claim in a professional way. Even though the claim took extensive negotiation, it was resolved on the high road. Now, this public adjuster has earned the respect of the independent adjuster and respects the independent adjuster. This will be beneficial to both sides the next time they meet at a loss because the two have developed a professional working relationship. The public adjuster also told me not all independent adjusters have authority in the field, and this was an exception because most of the claims are reviewed by an inside examiner who does not visit the property.

Success Story 2
This sounds like the familiar story of repair vs. replace the roof. The plotting of each area of damage on the roof is no small task, but I think it showed the carrier three things. Number one, the roof was damaged in 164 separate and distinct areas. Number two, this public adjuster can document and prove the damage to anyone (even a jury) based on his hard work and the plotting of each individual area of damage. Finally, the claim has to be paid.

Success Story 3
This claim was a commercial loss where the building was so badly damaged that a rebuild could not be done and a new build would take too long. At this point, I think most people would have given up. However, this public adjuster did not and he should be proud of the resolution because this was more than adjusting, this was client advocacy with creativity. Even if you have been adjusting for several years or your entire life, it is important to remember the resolution for each client can be different. What worked for you on another successful loss, might not work for a new client. You need to keep the current client’s individual circumstances at the forefront. The best option for this pharmaceutical company was to buy out the competitor, but for this start-up company it is no small act to convince a carrier to pay limits on Business Income and Extra Expense Coverage. Documentation and claim presentation was key in this claim. The public adjuster explained the situation the client was facing (including the alternative) in the claim package and a resolution was achieved. Kudos to the public adjuster!

Success Story 4
Going the extra mile. The foresight to take the aerial photo of the loss after the tarp was placed saved this claim. I know most adjusters take photos of the damage but here, taking photos of the mitigation efforts resolved the claim.

One final note, what I really liked about the success stories from this Massachusetts-based public insurance adjuster was how he explained his proud moments. He did not list the figures of the settlements or tell me how much money he made. Instead, he told me how he properly adjusted and how his adjustment helped the clients.

I asked Theran if he had any advice for other public adjusters, and he explained that he learned a long time ago to spend time on the claims (even the small claims), and give the adjuster two copies of his claim presentation with support in a organized book or binder—one for the adjuster and the other for the claims manager who is really calling the shots. I think this is a very helpful and simple suggestion—show them the proof!

Want to share your story with Merlin Law Group? Email Nicole Vinson at nvinson@Merlinlawgroup.com.

If you would like to learn more about the firm, Professional Loss Adjusters, Inc., contact me and I will forward your information, or check out their blog.

At the Massachusetts Association of Public Insurance Adjusters and National Association of Public Insurance Adjusters Fall Educational seminar last year, I started a heated floor debate regarding the topic of public adjusters appearing for examinations under oath. Participants offered the following options when an insurer demanded that a public adjuster appear for an examination under oath and the policy did not clearly mandate it:

1. An insured should write and demand for the public adjuster to do so.

2. File a Declaratory lawsuit determining what to do.

3. Appear for the examination.

4. Appear on a case by case basis.

5. "Hell, no! We won't go!"

I try to work it out on a case by case basis. My client is the policyholder--not the public adjuster. If it is at this stage of a proceeding, my client, the public adjuster, and I all want the same thing--getting paid what is due under the policy as quickly as possible. I try to remind everybody on my side of this concern while they are pounding on tables in frustration and getting upset at the insurance company because it could generally find out the same information by meeting, talking in person or a phone call.

The frustration is understandable. From the policyholder's perspective, many examinations under oath are taken months following the loss and are scheduled by the insurer's attorneys unilaterally and without a good faith attempt to coordinate time and documents requested. Once a request is made to change the time, the insurer's attorney often gives alternative times, months away, despite delay which should be avoided as a part of the insurer’s good faith obligations to the customer. Some insurance companies select defense attorneys who are argumentative and treat policyholders without respect. If the insurer applied the Golden Rule, they know they would fail miserably.

Given this scenario, my mission is to move the matter along while protecting my client and preserving claims for extracontractual damages caused by delay, lack of insurer good faith during the examination and document review process, and poor initial insurer adjustment. I have filed lawsuits when the examinations take too long, lead to a game of 101 questions, and where people the insurer demands to be examined are not required to be examined under the policy. Still, most clients would rather get to the purpose of the claim--getting paid and moving on with business and life. Most public adjusters have the same interest as well.

Sometimes, the public adjuster is a far better witness than my client. The public adjuster may appear more truthful, professional, provide quicker and better answers, explain the loss, the values, why the money is owed, and simply provide a better appearance of truthful, honest knowledgeable information than the policyholder. Often, this is all the insurance company needs in the first place and there are times when I pose no objection to the public adjuster appearing for the policyholder in an examination under oath. The problem is talking the policyholder or public adjuster into it because either may want to legally object. Again, I am focused on getting my client paid as soon as possible. If that practical concern is best served by not objecting to the possible illegal request by the insurer, I may not object and even strongly encourage the public adjuster to appear for the examination under oath.

Many times, I suggest that the insurer cannot legally take an examination under oath, but will suggest that the public adjuster meet with the insurance company's attorney, answer questions and even give a sworn statement, so that information can be exchanged in a framework that is quicker and will likely get the claim adjusted and paid. This practical alternative seems to avoid the legal questions surrounding an examination under oath and possible declaratory lawsuits regarding the process.

I treat the request for a public adjuster's examination under oath on a case by case basis. Whether a public adjuster’s testimony is binding on a policyholder is questionable. Accordingly, it is always important to note that the claim is the policyholder's claim and not that of a person hired to assist in determining the amount owed under the policy. However, the public adjuster is usually an independent contractor who does not make binding contracts, agreements, or is authorized to give legally binding testimony. Most state licensing authorities do not allow public adjusters to do so.

Are there other significantly different views than mine? Absolutely. Some policyholder attorneys file suit right away. Even in my law firm, there are differences of opinion as to the proper methodology in a given case--but I emphasize to the other attorneys that most policyholders want money sooner rather than later and without lawsuits. Still, some clients are best served by such lawsuits and even I have departed from my general course and filed a lawsuit when it served my client’s best interests.

This debate is highlighted by a recent article in the American Bar Association's Tort and Insurance Practice Section's publication, The Brief. The article, “The Power To Compel Submission Of "Others": Are Public Adjusters Subject to Examination under Oath Provisions?” written by insurance defense attorney, Keala C. Ede, suggests that public adjusters may be compelled to appear for examinations under oath. Her conclusion was stated early in the article:

"Notwithstanding the opinions expressed by Goodman and Hammond, the following survey of relevant jurisprudence indicates no prevailing view as to the applicability of EUOs to public adjusters, although cases suggest that such examinations can and should apply in the right factual circumstances."

She explains and argues for this in her final conclusion:

"Applying all of the foregoing cases, an EUO provision applying to "others" in addition to the insured, in conjunction with a factual showing that a public adjuster is within the insured's control, would likely apply to that public adjuster. It is nevertheless arguable that, given the detailed and inextricable role that public adjusters play in adjusting losses for insureds, public adjusters should be subject to an EUO if policy language includes "others," even without a factual showing that a public adjuster is subject to the insured's control.

Cases such as Gipps, where the public adjuster prepared and submitted two exhibits and was held subject to examination thereon, and Jacobs, in which the insured had so relied upon its public adjuster that it was unable to answer questions about the accuracy of the estimate prepared by the public adjuster, support the argument that public adjusters that "handle every detail of the claim" and "inspect[] the loss site immediately, analyze[] the damages, assemble[]claim support data, review[] the insured's coverage, determine [] current replacement costs and exclusively serve[] the [insured]" should be subject to an EUO without requiring any showing by the insurer that such an adjuster is within the insured's control. Indeed, in rebutting Goodman's argument, Hammond referred to the unpublished opinion of Active Fire Sprinkler Corp. v. American Home Assurance Co., which Hammond characterized as holding that the misrepresentations of a public adjuster are attributable to the insured. Like Gipps and Jacobs, Hammond's characterization of Active Fire Sprinkler Corp. would suggest that a public adjuster retained by an insured is by its very nature under the insured's control.

Based on the conflicting views of cases such as Gipps, Payne, and Florida Gaming Corp., however, if either the policy does not extend to "others" or the facts do not indicate that the insured has the power to compel submission of its public adjuster to examination, there can be no clear prediction of whether such an EUO provision would necessarily apply to a public adjuster."

So the debate continues without a clear answer. I am certain all insurers will say they can compel public adjusters to examinations under oath and use them, as they do policyholder examinations, argue defenses such as material misrepresentation possibly voiding the policy. Policyholders should fight this position.

I will look at each situation and policy on a case by case basis. I will try to do my best to help my client to cooperate with the insurer and get the claim paid as soon as possible while protecting my client and preserving my client's rights.

Significantly, it should be noted that "cooperation" is not defined as the slavish obedience to the demands of the insurance company. It is a joint process where both the insured and insurer act in good faith and for common purpose--getting full policy benefits owed to the policyholder as soon as possible.

Sometimes, insurance company attorneys and their client adjusters fail to remember that the policyholder is as much the customer after the loss as when the insurer sold the policy before the loss.

From the surveys, I know virtually everyone in attendance felt the same way.  I believe it was the result of the audience's knowledge and experience.  Our firm did a survey earlier in the year to determine what adjusters enjoyed about seminars, what they did not like, and what they wanted to get out of the seminar.  We found, not surprisingly, that they hated to listen to lawyers "preach" about what the law is regarding a topic of insurance law.  Instead, they wanted to know practical tips regarding their business, how to address certain difficult issues that come up during claims, and how to quickly get full claims benefits to their clients. 

In response to the survey, we decided to do the entire seminar in a different manner.  The topics were chosen from the survey we conducted.  We provided an encyclopedia of insurance law and regulations on the topics the adjusters told us they wanted to understand.  The materials helped the various Departments of Insurance approve continuing education requirements, while analyzing the topics our audience wanted.  The panelists talked about their experiences as tips rather than "war stories."  Smaller losses which everybody handles were discussed as well as how clauses in policies can be used to provide better and quicker indemnity to policyholders. 

We discussed subtle and interpersonal aspects about how to handle situational aspects of claims with the insurance company.  Questions and differing viewpoints were encouraged.  For those with a passion for helping policyholders get what is deserved, there was only one place to be on Friday, and I felt honored to be there learning while helping lead the seminar.  Many from the insurance industry perspective often talk poorly about public adjusters. Sometimes the criticism is justified.  Often, it is out of professional jealousy or envy because the public adjusters can make significantly more money than company adjusters.  However, how many insurance company adjusters have law or accounting degrees?  About ten percent of those in my Friday audience had those credentials. 

Marvin Milton, a public adjuster from Boston, went to Stanford undergraduate and then Harvard law school. Of the tens of thousands of insurance company field adjusters hired by insurance companies, I know of none with such qualifications.  At one point, a person in the audience asked me if it would be "bad faith" for a commercial property insurance adjuster to fail to remind or inform a policyholder of extra expense benefits.  My answer was that the vast, vast majority of insurance company adjusters are not even trained to understand the nuances of extra expense benefits and how those coverages may help policyholders. 

The sad truth is that most insurance companies fail to provide such information to their customers because the insurance company claim personnel do not understand the benefits available under the product they sell.  Most insurance companies simply hire accounting firms to figure out what may be payable without truly assisting their customers by explaining how valuable and helpful those benefits can be.  When policyholders are deciding whether and which public adjuster they should hire, I suggest that they look for somebody they can trust and who has the credentials and experience of NAPIA membership.  Often, the benefits obtained by public adjusting firms are far in excess of the minimal fees charged.