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Welcome to the Wonderful World of Insurance. The adjusters out there that have done Bodily Injury have known about this for years. It is commonly known as cost of defense or as the real world would call it BLACKMAIL. Plaintiff attys have known this for years and the pa's now know it as well. The normal cost to defend a claim with outside counsel is anywhere from 5-50K depending on the type of claim/suit and amount demanded. We used to be told by the littigation units "Don't get mad but we settled that claim for X dollars." After a while we knew that it was cost of defense money. They would defend some of them but most of the time it was a settlement for a small amount. That is why premiums go up. There may have not been any storms but if you have a 1000 files in suit and you can settle them for an avg of $20,000 that right there is 20 MILLION Dollars spent not including the cost of the file examiner and attorneys. Even at $5,000 each that is 5 MILLION. Hello premium increase....

Thats how it works and the sad part is is part of the loss and allows premium increase,s..

 And we all know 5% underwriting profit of more premium is better than 5% of less premium.

There is way too much truth in what is being said here. I have worked the legal end of claims heavily over the years (as a staffy and as an IA working in a carriers legal dept) and have seen these patterns. If carriers would all take a hard stance on these and pay the $ into defense costs vs paying the "nuisance value" (no carrier will admit to the fact that they pay nuisance value claims), you would do away with a ton of these frivolous suits. I know most adjusters are for tort reform, and I lived/worked in a state (TX) that implemented it and it helped in a huge way. The main problem there is it didn't go far enough. If every state and the federal court system would introduce one item into their tort system rules, it would probably curb or do away with at least 75%-80% of the frivolous suits filed out there. That would be to make the person who loses the suit pay all the winning party's legal fees and court costs. Also, the losing attorney should be on the hook for these costs, and that would make some of the attorney's with lower ethical standards out there think twice before filing the lawsuit. Of course this wouldn't work without the collective effort of carriers (and businesses, etc) to take a hard stance on the "nuisance" cases and take them all the way to verdict. Attorney's and PA's alike know what carriers are puchovers and know what ones will pay the nuisance value claims vs defense dollars. Any time a person/company takes a case to verdict, it is a gamble. Right now the scales are weighed way too far in the plaintiff's favor in that if a carrier actually goes as far as trial and the pltf loses, the only thing they lost is the pltf' attorney's time and maybe some limited costs of court.

I have been saying that for years. Loser pays. I have a family member who was recently sued for something none insurance related. It was a ridiculous lawsuit. They won the case and were completely innocent but it cost them $15000 to defend themselves.

This will never happen because most of our politicians are lawyers. Look at the healthcare bill. It is 3000 pages long and does nothing to curb any of this in the health insurance field. Fact is a roofer can hire an attorney and pay him 15% of the claim (insured pays it) and get 100% of claims paid for. Can even Jack up the cost of the shingles to cover the 15%. I don't know where this ends.

I have been saying that for years. Loser pays. I have a family member who was recently sued for something none insurance related. It was a ridiculous lawsuit. They won the case and were completely innocent but it cost them $15000 to defend themselves.

This will never happen because most of our politicians are lawyers. Look at the healthcare bill. It is 3000 pages long and does nothing to curb any of this in the health insurance field. Fact is a roofer can hire an attorney and pay him 15% of the claim (insured pays it) and get 100% of claims paid for. Can even Jack up the cost of the shingles to cover the 15%. I don't know where this ends.

TOCE tockee Trial to conclusion extortion. I think this will come out of hurricane IKE, just like "wavewash" straight down hail, total to insurance, slab claims, foundation claims, sink hole claims etc. DPT and "unfair claims practice" threats by PA,s and the TV attorneys are the drivers.

The carrier thinking has to be changed from "we have to save the legal cost of trial and the possibility of a large jury award to lets keep the cost of trail as low as we can, keep thye money in the bank for the next 100 years and try ever one of the cases and TOCE will be in the history books, for our grqand kids to read in law school.

Keep much better notes and check your spelling, write estimates like a 25 year PA taking speed.

I am not talking down to the cat. adjusters; however before uou fall for the TOCE pitch by a insured or public adjuster, only less than 1% of you are qualified to discuss this tipoic and make an recomendation to recommend TOCE on a long tail catastrophe claim. I am not in this 1% either. I do not have a JD or any advance insurance designations, nor have I ever been a VP of claims for a large insurance company and this was my job description. I do know many BI claims have TOCE value, but it is not 50-100K its more like 10% of that amount to keep a Questionable TOCE case from haveing a jury PICKED.

At least please keep this in mind ever time you hear this "it will cost you" pitch. Concede that point  and reply if our lawyer is as good as ours it should cost you the same time and expense.

I know most of you have never been in this position to discuss it, but I get feed back from good clean up adjusters. "who are begining to think they should look out for the good guys by wipping the bad guys. This is about 4 pay grades higher than a "good clean up adjuster".... just my .02

 

 

 

I have noticed that every carrier I am now dealing with takes much longer to process a homeowner's hail insurance claim now in 2010, than it took to process the claims in 2009. That is one of several reasons why I am going to try to develop a job completion form (roof work) that prevents the insured from profiting from a loss. I have already went into substantial detail in other posts on this topic. Does Anyone Know About New Insurance Underwriting and Policy Coverages being implemented in GA?
In March 2010, I spoke to a very experienced Personal Lines CSR at an insurance agency in Atlanta, she told me that several insurance carriers are No Longer Writing insurance on homes that have roofs 10 years old or older. This is because roofers and unemployed contractors are going into neighborhoods where the roofs are 10 years or older after a 1" hail storm because they believe that only an old roof would likely be damaged enough for replacement caused by 3/4" to 1" hail. This CSR also told me that some companies want to change the insurance policy to only pay ACV for hail damage to certain roofs. I believe this may be a possibility in 2011. It might occur in 2010 but I doubt it has a chance until after the election for Governor is over. I do not believe any insurer friendly legislation will get passed in GA in 2010 because the current insurance commissioner is running for Governor. I am not saying anything bad about him as I heard he is a very good man. I am just pointing out that if a politician is running for a higher office such as insurance commissioner to Governor, he/sh would likely be more inclined to protect voters in that election year, then at any other time.

Excuse me Ray, I understand most of what you usually post but what is TOCE?

I am doing some litigation support for some attorneys defending carriers against the famous TV lawyer...we all know who he is. It's a joke. Atty sends demand for 250k including mental anguish, etc, and atty fees of 50k for filing one petition. Carrier will settle for ??? and never fight all the way to trial. It baffles me. I just wish some carrier would pick one and fight all the way to the jury box.

As for the pa's calling us assholes....I had one blow cigarette smoke in my face and spit on me a few months ago. I was nice and attempted to explain the carrier's position and he lost his temper and got in my face. I decided in about 1/2 a second that he was not worth it and walked from the claim. Turns out he does this to all adjusters. I'm amazed that he has not been punched.

 Ryan,

I would have hit him.  I gotta tell you that if I was a contractor at the scene I would have told him to calm down and if the PA and IA went at it if the PA was getting beat up I would let the IA go on until it became necessary to prevent a death and/ or major injury before breaking it up.  If the PA was winning I would immediately snatch him off the IA because I believe in what is right and wrong. If you are wrong I will not defend you no matter who you are.  If I am wrong and it is brought to my attention I will apologize if I was an ahole or admit I was wrong and improve myself.  I have a short fust for aholes.  That is probably because I have met so damn many of them in my life.

Hello to all !! I also want to take a moment and  give my regards  and best wishes to Mr. Ray Hall, Mr. Hall, without offending you as I am unsure to your religious beliefs, I want you to know I have kept you in my prayers since finding out you have been ill lately.

There was a brief post on my website recently in regards to any adjusting knowledge you may have forgotten over the years is more than many adjusters will ever have,

If I can achieve even half of your knowledge and success in the Adjusting industry, I will consider that a success.

 

In regards to the the topic at hand

dealing with an attorney repped insured can indeed be an unpleasant experience for the IA dealing with a PA.

Now I have only 6 yrs in the industry and began my career like many adjusters with moderate experience with the 4 in 04.

I have always been an IA,

I went to Law school in Southern California with a fellow who became a Tax attorney and beginning with Katrina/Rita, he began to solicit insureds who believed they were not payed enough from the initial claim award.

Knowing I was in the industry

We spoke and he asked for me to do some inspections and build some Xactimate reports for the law firm , I declined and explained the language of my IA license dictates I can only work on behalf of the Insurer and he needs a PA to advocate for the insured or he can train a non licensed employee of the law firm to do inspections, but I did offer to qual check the IA report ( kinda funny that he asks a new adjuster with around that time barely a year of experience to qual check an IAs estimate who had 10 times more experience than me)

As I being an old friend , we hung out alot and I saw first hand how the attorney/PA process unfolds.

I read on here that attorney's were retaining anyone regardless of damage or if a claim wasn't even filed and they would attend community meetings to solicit business, that is incorrect as state regulations are very strict in regards to attorneys and how they solicit business, so you can't just hang around the seminars and community meetings and if it can be proven that an attorney solicited insureds in this manner, they will face a large fine, sanctions and possible suspension from the state bar association.

Once the insured retains council

the attorney does not file a lawsuit and send the carrier an estimate with a see you in court mindset.. They serve the carrier with a notice of representation and submit the attorneys estimate and will coordinate a re-inspection just as PA's would. the IA and law firm work toward a resolution.

A week or so later, as you all know, the carrier will offer a settlement  and if reasonable, the firm settles.

If it's the carriers conclusion from the re-inspection was no additional damage , they decline to settle, if that is the case, the law firm will go to mediation with the carrier.

If all those measures fail to resolve the claim, the law firm will file a lawsuit if they believe they have a case and as most know , an attorney will only file suit if they feel they can win, if they feel they can't win, the claim is closed with no additional award.

Sidenote** I washed out of law school after 2 years in 2000. I'm a 30%disabled veteran , blew both eardrums out and broke my leg and severed all ligaments in my knee during the first Gulf war, so I am blessed for 2 reasons, got a free ride to go to law school and get my equipment needed to adjust claims like laptops ladders for free and I am blessed with lifetime medical care, thank god for that as I tipped a 24 ft extension ladder back in Oct. 2009 and broke my leg , my pelvis , 4 broken ribs, broken jaw and fractured my skull.I had to have metal rods put in my leg bones and 3 weeks ago , had surgery to remove a blood clot under the fracture area of my skull . As most IAs are 1099, we get nothing in the way of benefits as of course you guys are aware. The hospital bills would have bankrupted me 3 times over, so I'm lucky again to have free medical.

I have been following your guys posts on CADO for along timeand have much respect for all of you guys !

If that PA had spit on me or became aggressive, I would have knocked him the f#$k out or If I had the discipline , I would have reacted by phoning the authorities  and having that PA (In this case , PA stands for PUNK ASS !!) arrested for battery(spitting is indeed battery )

                                                                                                                                                           Robby Robinson

                                                                                                                                                             www.fromoneadjustertoanother.com    

^^^^^

For hurricane Ike, attorneys are just filing suit, no letter of rep, no estimates, no trying to resolve prior to filing suit. I get served with suits where the insured never complained, said they were shorted, etc. The insured saw the commercial on TV that says they are owed more money. So that's all they want...money...not their house repaired, just cash. Attorneys are ignoring/bypassing the appraisal clause of policy and just filing suit. There are standing pre-trial orders in Harris County that basically guarantee the case will be resolved in mediation. The only ones winning are the lawyers. Premiums will go up.

As for punching the PA...I would have a few years ago, but I have mellowed out quite a bit. And I know when I am being set up for something, so I did not take the bait and let it escalate. I just said some choice words and walked away from the inspection.

I agree with Ryan. There is no attempt to settle the claim prior to filing suit.

Hello gentleman

I say this with the utmost respect,

you are mistaken and let me tell you why !

Attorney's are notoriously cheap and will not litigate any claim if they can settle out of court, litigation in most instances is used as "LEVERAGE" and any 1 st year LAW student will tell you,. any 1st year , 1st Semester LAW student will tell you the goal is to get the most for your client, with the least effort.

Filing a lawsuit is expensive

they must pay experts , pay for depositions, many things. If any attorney brought suit against an insurer without exercising due diligence, without going through a "MANDATED" process which outlines the defendant's response and actions to each step of that process , that attorney will at the least face severe sanctions and would be severely reprimanded  up to and including possible disbarment.

An Attorney who makes no attempt to settle a claim ,  prior to filing a lawsuit would be dealt with by the Courts as harshly as the Courts would  deal with an Insurer who denied a claim without ever attempting to send out an adjuster to document damage claimed by the insured, period !!

Simply put

An attorney's role in representing an Insured follows the same S.O.P. as a PA firm with the exception that where a PA's role ends with mediation, the attorney's role ends with litigation.

When an Insurer receives a letter of representation from an attorney rep'd Insured, it does not mean a lawsuit is being filed.  My buddy from Law school had around 600 or so clients who retained his firm to handle their claims  and of those around 150 or so were closed with no additional claim awarded in which after a re-inspection and mediation , the case was dropped with no litigation as it was decided a favorable outcome was unlikely (It should be noted that in cases where a true professional CAT adjuster wrote the initial claim, 90% of those were closed with no additional claim award, that stands as a testament to the importance of a true professional CAT adjuster) A large % of claims that were paid an additional claim award stemmed from these STORM TROOPERS who were more concerned about the quantity of claims over the quality of claims.

ALTHOUGH I AM AN INDEPENDENT ADJUSTER, ANY FELLOW ADJUSTER WHO SUBSCRIBES TO THE PHILOSOPHY OF DOING AS MANY CLAIMS AS POSSIBLE PER DAY AS OPPOSED TO TAKING THE AMOUNT OF TIME NECESSARY TO PROPERLY DOCUMENT THE CLAIM IS NOT ONLY DOING A DISSERVICE TO THE INSURED , BUT TO THE INDUSTRY AS A WHOLE !!

A true professional CAT adjuster who performs a solid , thorough assessment and who awards the the insured everything they are legally entitled to as to be restored to a pre storm condition will give a PA or attorney nothing in which to work with and those entities who inflate claims  and ask for egregious claim awards will be seen for what they are......... CRIMINALS and should be dealt with accordingly.

Simply put, the best defense to a PA or attorney rep'd insured is a solid initial assessment of damages and pay the insured what they are legally entitled too !! As long as carriers understand that the cost of material and labor increases in the aftermath of a large scale "event", a small supplemental payment to the insured should handle any issues !! " 

If you disagree with me (trust me , you aren't the first or the last ,at least according to my ex-wife), then I respectfully ask you back up your statement with more than an " I agree with Ryan, there is no attempt to settle the claim prior to filing a lawsuit !! "

                                                                                                                                                                           Robby Robinson

                                                                                                                                                                      www.fromoneadjustertoanother.com

                                                                                                                                                                

I don't know how you can respectfully tell me that I am mistaken when and while on cleanup from Hurricane Ike handling claims as full adjustments I was being served filed lawsuits for several claims. I would have been sent out to review the losses with the attorney or a representative of the attorney had your senario been the case. I had met with attornies on a couple of reinspections in an attempt to reconcile any differences. On the ones that I met with attornies on there have been no lawsuits filed at this time.

I certainly am not an attorney and am unaware of the legal hoops to go through in filing a lawsuit however I am aware of my own personal experiences.

CatadjX,
I respectfully disagree with you in a couple areas in that first, I think you give way too much credit as to the oversight there is on attorneys out there. Your statement "An Attorney who makes no attempt to settle a claim , prior to filing a lawsuit would be dealt with by the Courts as harshly as the Courts would deal with an Insurer who denied a claim without ever attempting to send out an adjuster to document damage claimed by the insured, period !!" is simply not true at least in any jurisdictions I have handled bad faith lawsuits (IL, OK, TX, CA, MS, AL and LA). The most recent gig I completed involved handling nothing but bad faith lawsuits out of Katrina (and a few Rita) in 4 gulf coast states and it involved over 375 individual BF lawsuits and around 8-10 mass joinders and class action filings. The mass joinders had a total of over 200 claimants (a few duplicated with the individual suits), but excluding the class actions, I would guess that there were over a total of 500-525 claims represented in these actions. Of that number, the carrier was aware of attorney representation before the suit was filed in probably 35-45 of the cases. The carrier may have had supps turned in on an additional 75-100 before the lawsuit, which were resolved and there was no indication that the insured had any disagreement before the suit was filed. On 100% of the cases, there was never any "harsh treatment" by the courts, federal or state. The % of the carrier's first notice of any issues on the case being the receipt of the petition and complaint had to be well over 75%.
The second area I am in disagreement is that you said is is expensive for a plaintiff to file a lawsuit. Depending in the jurisdiction it ranges from $60 to probably as much as $400. That is relatively cheap in the big picture. A ton of the petitions and complaints were boilerplate, so some attorneys made one up, and changed the names, addresses, etc on them for different clients and defendents. A lot of them never proof read the final draft and used mixed info for different clients on them too, so it is not like they spent a lot of time putting them together.
The time where it starts costing the plaintiff attorney and their client time and $ is when they are hit up with discovery to complete (request for admissions, request for production, interrogatories). These take time and costs on both the pltf and the attorney, and you would be amazed on how often a motion to compel had to be filed by us to get them to do these, and then we usually got some real garbage returned on the eve of them getting hit up with sanctions and costs. The more lazy attorneys never showed up for the hearing on the MTC, and got hit up with our costs. There were so many cases that were nuisance cases only and probably had 30-35 of all of them that were resolved for a goose egg payment. Each one resolved for nothing but still cost the carrier legal fees and expenses, and to take one to a defense verdict of nothing costs probably $75k in total when it was a said and done. Considering a minimum demand by plaintiff of over $600,000- $1,000,000 the defense costs were chump change, but it is obvious the jury's felt there was no merit to the cases (or the pltf attorney realized their bluff was called and it would cost them a chunk of time and $ to pursue a case with little chance of a quick roll-over by the carrier).
I am curious about this "mandated" process that the attorney's go through on each case, and what oversight there is on these and by whom. I am also curious if you know of any cases that this process resulted in sanctions or disbarment of an attorney for filing a case without merit.
I agree with you in that it is very important to do a very complete and professional adjustment of the claim initially, but that is no bar from a lawsuit no matter how accurate the adjustment is. The blow and go adjusters may have a higher % of lawsuits against them, but I have never seen anything that supports that. On the issue of attorneys going to public/community meetings, I have dealt with a lot of insureds that went to these, and some were put on by pltf attorneys and some by reps of the DOI. They were geared to explain all the rights of the insured, what to do throughout the process, methods of dispute resolution, etc. Attorneys at these passed our business cards (at least in the ones in San Diego, CA from the 03 fires), as I had a couple insureds that told me so. In an ideal world, what you said would be the proper thing to take place, but alas we don't live in that perfect world.
It sounds like your friend who is working the Katrina/Rita lawsuits is hooked up with a good firm and does things the proper way. It was always refreshing to work with a firm like that, but it was the exception vs the norm. Keep in mind a chuck of what I talk about above is from cat work vs regular daily claims. Have also done a ton of BF litigation in regular daily work, and in that end of it, a huge majority of the lawsuits were filed after attempts were made to resolve it outside the court by the pltf attorney. I can't give exact percentages, but I'd say easily over 90%.

Bravo sbeau4014 !!

That was a great response !

I will start by telling you I am probably looking at the situation with overly rose colored glasses in a few areas .

1) The LLC my buddy from Law school created during Katrina/Rita while operated out of a rental house in Metairie, La was a class A operation with a full support staff  including 2 gorgeous secretaries, LOL. They operated out of a rental house as the whole team originated from SoCal and office space was a ta premium if available at all .

Of the approx. 600 claims over 25% of them were closed with no additional claim award, around 400 or so were settled either after a re-inspection or at mediation.

Of the 600 approx claims , 36 lawsuits were filed

and unbelievably most of those are still slowly churning through the Southern Louisiana justice system.

2) That I hold such  idealistic views of the legal system and those governed by lady justice (IE attorney's , investigator's) is from my years of attending law school.

Almost 40 % of my curriculum and class schedules were dominated by ethics classes and they are hammered in very early into  those inclined to receive a law degree(Juris Doctorate) and before you are given the knowledge and information required to successfully litigate any case, you are bombarded with ethics and the penalties for acting in bad faith, for operating outside guidelines and any unethical activity including but not limited to the penalties and sanctions for filing frivolous lawsuits, improper solicitation of clients and a whole slew of things all the way up to suspension and revocation of the right to practice Law by each states Bar association.

So when I read these blanket statements about how attorney's operate and are slapping lawsuits on anyone like they are handing out candy, my mindset was" what the heck is this guy talking about ?"

When I read blanket statements from someone who has no clue about the legal system and the laws governing those who practice law and they stand on a soapbox and speak as if they are an expert and tell those who listen " this is what attorneys do " that is irresponsible and should be stated that "This is what BAD attorneys do , they scrounge for anyone with a pulse and file a lawsuit and do nothing other than tell the insurance companies "see you in court". So folks who don't know any better take those statements as gospel !

I can tell you now , no attorney will conduct business like that !! The ones who do are not attorney's, they are nothing more than a criminal with a law degree !! Blanket statements are one thing .....BAD !! That is like saying all independent adjusters care about is saving the carrier money and all they do is try to give you as little money as possible when you file a claim !! We all know there are some IA's out there that operate like that, but they are the exception and not the rule. All Public Adjusters are crooks trying to rip off the carrier !! Again there are some, but there are also many more who are dedicated professionals.

Just for clarity, I went to Law school but I am not an attorney as I left after my second year when I was recalled back into active duty from the Army reserves.I was released from my reserve duty as I am a 30% disabled Veteran from injuries sustained from Operation Desert Shield/Desert Storm and I guess the Army felt I had to many pins and screws holding my leg together to be a good soldier and released me from further duty.

By then , I had missed over a semester of law school and said screw it , I didn't really want to be an attorney anyway, if I change my mind one day , I only have to go back for one more year to get my JD.

I have been a licensed concrete contractor for almost 18 yrs, I considered going for my General contractor license and somehow someway I got involved with the adjusting industry in 2004 . I am still fairly new to the industry with a little over 6 yrs and I consider myself extremely fortunate that my first two years in the industry included the 4 in 04 and Katrina/Rita and from the start, I was taken under the wing of some good ole' boys and before I was allowed to use any adjusting software, I was taught how to scope a risk inside and out including roofs with nothing but a pen and paper and calculator, after a couple of months of that , I could actually build my own Xactimate reports and start making some decent money, back then, I was a little bitter that I couldn't do my own claims like guys I got licensed with were doing and make some real money !! But those old boys knew what they were doing and of all they guys I got my license with back in 04', I am the only one still here and it's only because those old goats did more than just teach me how to take pictures and write reports, they taught me how to be an ....Adjuster

I appreciate your post and found it well thought out and insightful, thank you for your efforts, it gave me a great look into the ugly side of the business !!

                                                                                                                                                                         Robby Robinson

   

 

 

 

If you feel like hitting somebody it might be because they want you to. Resist the urge and keep your career.