Last week’s post explained the different roles independent adjusters and public adjusters have when it comes to property insurance claims. To help policyholders know what to expect from an independent field adjuster, several questions were listed in last week’s post. One of the most important questions was number 3: “What has the independent adjuster been asked to do in connection with your claim?”

Evaluate and scope the damage is a common a response to this question. This independent adjuster is looking at this loss for the insurance company, but can the adjuster resolve the claim on-site?

I am sure many of the public adjusters who read this blog will comment about their experiences at losses, whether an agreement can be reached on site, and whether that agreement is upheld by the insurance company. Of course, we welcome your comments.

In 2000, the Fifth District Court of Appeals released Bankers Security Insurance Company v. Brady and answered Mr. Brady’s questions about his claim and the agreements made at his property.

In Brady, Ron Livingstone was hired as the public insurance adjuster. Mr. Livingstone met Mr. James Shea, the independent insurance adjuster sent by the carrier. Mr. Shea and Mr. Livingstone reached an agreement regarding damages and the amount of the claim. The amount agreed to was $65,000, give or take a few hundred dollars. Mr. Shea agreed to give Mr. Livingstone the final figures by 4:30pm on July 27, 1998. But when Shea called Livingston, Livingston reported that he had been taken off the claim and a different adjuster was now assigned to the loss.

Brady brought suit against the insurance company to enforce the oral settlement agreement. The facts of the case get a little more interesting after suit is filed, as Bankers demanded appraisal and also tendered $55,000.00 on the claim. Brady sought an additional sum for overhead and profit. Later, both parties both filed motions for summary judgment.

The trial court ruled there was no genuine issue of material fact as to these matters. It ruled Livingstone and Shea, as agents of the parties, had entered into a verbal agreement determining the amount of damage to the building as being approximately $65,000.00, and that Bankers cannot withhold overhead and profit. It also ruled Bankers improperly (too late) sought to invoke the appraisal provisions of the policy. Bankers Sec. Ins. Co. v. Brady, 765 So. 2d 870, 871-72 (Fla. 5th DCA 2000)

Bankers appealed the ruling, but the appellate court pointed out three reasons it believed that the independent adjuster had the ability to reach a binding agreement with the public adjuster at the loss.

  1. During the depositions, both adjusters testified they had the authority to assess the damage, and reach an agreement as to the cost of repairs. Both felt they had reached an agreement as to the amount of damages, and both were upset when Shea was removed from the file.
  2. In the communications with the independent adjuster and the insurance company, the assignment was for Shea to resolve the building damage issue.
  3. “The record discloses without dispute that Brady and Bankers both retained. adjusters. An adjuster by definition is a ‘representative of the insurer who seeks to determine the extent of the firm’s liability for loss when a claim is submitted. A person who acts for the insurance company or the insureds in the determination and settlement of claims.’ Black’s Law Dictionary. Their behavior and understanding in this case, as documented by Shea’s reports to Bankers, clearly indicate he had damage settlement authority for Bankers, and he exercised it prior to being taken off the case.” Bankers Sec. Ins. Co. v. Brady, 765 So. 2d 870, 871-72 (Fla. 5th DCA 2000).

This case shows us how important it is for us to understand who is working for whom and that agreements made at the property can be binding on both parties–even when the adjuster on behalf of the insurance company is an independently licensed adjuster.

When insurance companies fail to honor agreements or their insurance policy promises, policyholders need to speak up. On this Saturday, it reminds me of the lyrics. Get up, stand up: don’t give up the fight. Get up, stand up: don’t give up your rights.