How To Make More Money!

Do I have your attention now?

Welcome to my guest blog series devoted to the stories and cases of public insurance adjusters. I have been happily working on this blog, and I am encouraged at how many responses I received from public adjusters all over the country who are interested in sharing information. Thank you. It means a lot to me to have interested readers and contributors. So, I began thinking about the topics for the blog and I thought it was most fitting to begin the series by discussing the hot topic of getting paid.

TOPIC: GETTING PAID

Your contract with the policyholders governs how you will get paid. If only the contract could tell you when you would get paid. Payment dates and payment amounts are very easy to determine, so long as you have a crystal ball. Fresh out of time machines and crystal balls? Me too, so I guess we have to make smart decisions. There is always a risk when you sign-up a new client. Most public adjusters take a percentage of recovery (usually on funds received after their involvement) and the percentage is paid by the client when and if the carrier issues payment.

Insurance companys often have some comment to make about public adjuster fees. I think the fact that the public adjuster has an interest in proceeds burns the company adjusters because they are not paid in the same way. Perhaps it’s envy. But, what the insurance adjusters may not realize is that the public adjuster must completely adjust a claim and jump every hurdle placed by the insurance company before his or her payday. Sure, there are claims when undisputed amounts are paid and the public adjuster gets a percentage of the recovery before the claim is finally resolved, but there is no hard and fast timeframe for public adjusters to get paid. In fact, in many instances I have encountered public adjusters who wait for their fee until the final recovery. Also, certain PAs don’t take fees out of additional living expense checks and/or contents payments.

So, what we know is that public adjusters don’t know when they will get money, or if they will get money. Nor can they really project the amount of the final recovery in order to calculate an anticipated fee. This sure makes it difficult to structure a business. Now, consider a case where everything goes as planned, the claim is resolved through hard work and dedication and the carrier pays the claim—but fee is still out of reach.

Public adjusters are no stranger to this problem. Even after the check comes in, there are issues with endorsements from mortgage companies, clients who want to play Let’s Make a Deal and so on.

But in this case, the public adjusting firm wins! “Judgment for the [public] adjuster.” In Ochocinska v. National Fire Adjustment Co., 577 N.Y.S. 2d 998 (4th Dept.1991), the public adjusters had to litigate against the policyholder in order to receive their compensation. The case arose out of fire loss at the property of Geraldine Ochosinska. The public adjusting firm worked the case and the claim was paid. The case states, “[n]ational Fire succeeded in adjusting her fire loss claim in an amount acceptable her.” However, the client did not want to pay for the services and wanted the contract cancelled.

The contract agreement between the client and the public adjuster stated the time period the client had if she wished to cancel the contract. The statutory requirement in New York at that time the contract was signed allowed the client to cancel the contract before midnight of the third business day following the date of the agreement. The contract contained notice of the right to cancel, but the date listed on the contract was December 31, 1989, which was a Sunday. Under the law in New York, at the time the agreement was reached, the time period should have been extended to January 2, 2010.

The client didn’t attempt to cancel the contract until after the loss was successfully adjusted. She argued to the court that she should be able to cancel anytime because the contract was wrong, and that she should be able to cancel at anytime until the error in her contract was corrected. The trial court agreed and granted her motion for summary judgment on this issue. The public adjuster was to be paid nothing.

BUT THERE IS MORE TO THE STORY — 

The public adjusting firm appealed the decision. The appeals court determined that the first court was wrong and should have found for the public adjuster:

There is no assertion that plaintiff was confused or misled by the insertion of the obviously incorrect date. Plaintiff does not urge that, had she known that she could have canceled on January 2, she would have canceled the agreement at that time. The record shows the contrary.

The client and the public adjuster in this case had frequent commutations regarding the progress of the negotiations. The client even complained the process was taking too long, but she never expressed a desire to cancel until after the services were performed. The court held the incorrect date on the contract did not prejudice Ms. Ochosinska because she did not want to cancel extended 5 day cancellation period.

LESSONS LEARNED

• All sections of the contract matter;

• Sometimes to get what you agreed to a court must be involved;

• Communication with the client helped the court decide the case in the public adjuster’s favor —document your files

• Make sure you have updates on the contract requirements so you don’t make an inadvertant error that could cost you;

• The question posed at the beginneing of the blog was how to make more money. The answer is — in part — make smart decisions, accurately document the file, and fight for what is right.

If you worked on this case or have more information about the other details, please post comments, we would love to hear more of the story.