When Should I Hire an Attorney to Handle an Insurance Claim

woman discussing insurance claim with attorney

During my 42 year career as an insurance agent, I heard several insurance claims adjusters say, “This claim settlement would be so much easier if the client would just hire an attorney.” It always struck me as being odd that an adjuster would feel that way; but then as I observed how the adjuster communicated with an attorney as compared to the communication with the specific claimant, I could see why they would prefer the attorney.

These things stood out to me:

Attorneys and adjusters have a better understanding with the process of claim settlement than the client has. There are some steps which the adjuster needs to follow which take time to determine if there is even a legitimate claim to be dealt with: police reports, statements from parties involved with the claim, statements of witnesses, notarized list of losses, values of items to be replaced, and in the event of theft losses sufficient time to lapse to see if stolen items will appear. Attorneys understand this and they will let the process work itself through. They are also the ones who walk the claimant through the involvement expected of him or her in assisting in getting the claim settled, thus releasing the adjuster from that task. Frustrations which can occur are handled by the attorney as well, so the adjuster is not being harrassed by the claimant wanting to know where the claim stands.

With an actively involved claimant, the adjuster in many instances has personal one-on-one meetings or multiple email or phone conversations to explain the process, educate on terms being used to handle claims, establish trust with the claimant, wait for notarized losses, negotiate values on each specific item lost or stolen, and have the skill to keep settlement process on civil terms. This sometimes is difficult because claimants know they have suffered a loss and they want to be compensated so they can move on with their lives. They feel some of the things they are asked to do–like getting lists of items with dates purchased and purchase values, present replacement values, quality of items when lost, and proof of ownership–are just busy work and an irritation to them. Why should they have to do all this when in their minds they have a legitimate claim which should be handled.

One of the major drawbacks in hiring an attorney is giving up the right to directly deal with the adjuster or the other party involved. Once you have retained an attorney, he or she becomes your voice both in public and private negotiations.

One thing to remember under your homeowner and automobile policy is the provision that legal defense is provided for you whether you’re liable or not. This is part of the benefits you are paying for with your premiums. The company will determine its role in your defense; and once it has determined if there is potential liability, the expense for an attorney will be above and beyond your limits of liability. If the company determines in the way they look at a claim that you are not liable, they may make the decision not to continue a defense for you. In denying defense, they may open themselves up to a breach of contract if you are later held to be liable, so you can be rather certain they will be very cautious is making such a decision. Also, remember the insurance company owes you no defense if you deliberately or while committing a crime cause harm to another person’s property or person. In that case, the claim no longer falls under an insurance contract, so your only recourse would be to defend yourself or hire an attorney.

Having reviewed all the above, remember you are not obligated to have the insurance company provide you a defense. You always have the right to pursue a course on your own; but if you do, you relinquish your right to the provision of the policy and cannot come back later requesting the insurance company provide that legal defense.

My observation is if you have a need under your policy for attorney assistance, let the policy run its course–and then if you feel additional assistance is needed, discuss with your adjuster and agent how that additional legal assistance can be utilized in helping to settle the claim. The adjuster may prefer to work with an attorney because so much of the emotional portion of the claim is thereby removed, but you shouldn’t be intimidated if you choose to handle the claim on your own. It could turn out to be an very enlightening and educating experience.

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