When Do I need an Attorney?
Do you need an attorney to deal with an insurance company? This is a question frequently asked by consumers. As an insurance agent, I deal with both insurance companies and attorneys. Insurance companies tend to favor dealing directly with you. Attorneys tend to stress that their involvement is focused on making sure you get all that is legally due you with the least possible aggravation. As a neutral party here’s my best attempt to give you a non-biased answer.
The worst position held during my career was while working in the Claims Department of an insurance company. Claimants don’t trust the insurance company. The insurance industry earned that lack of trust many years ago. Today most companies pay claims reasonably and expeditiously. The Rhode Island Department of Business Regulations (DBR) has regulations guiding what insurance companies can and cannot do. They conduct audits to make sure fair and equitable treatment is being provided to the claimant. The actions of each respective state’s insurance regulators have had a significant impact on simplifying the claims handling process. The average person can handle common claims situations without needing the services of an attorney. But there are claims situations that are complicated; an attorney will help you navigate the claims handling process in those situations.
Dealing with a common homeowner property damage or theft loss seldom needs the involvement of an attorney. Studies support that most such claims are settled without attorney involvement. If you do utilize the services of an attorney, their fees come out of the amount paid for your loss. If you simply want someone else to handle the claim process for you, hire a “public adjuster” to serve as your representative with the insurance company. For a fee (usually 10% of the insurance claim payment) they negotiate the insurance claim settlement. Their fee maybe lower than the fees charged by an attorney.
Liability arising from a homeowner policy does commonly result in the involvement of an attorney. The injured party seldom has any idea of how to recover their financial loss. Saddled with the fear of dealing with the ‘big bad insurance company’ and their lack of knowledge of how to even pursue a claim, most injured parties turn to an attorney; that’s not always necessary.
Following most accidents, the injured party is usually looking to simply have their medical bills taken care of; seldom are they looking to get rich quick. Virtually all homeowner policies have “Medical Payments” coverage. It is added to policies as a kind of no fault coverage. It pays a claimant when all they are looking for is payment of their medical bills. Few people are aware that coverage is on their policy. The simple reality is that it is not worth an attorney’s time to get a $500-1,000 medical bill paid for you. Most attorneys are paid a percentage of the settlement which is usually 25-40%. To cost effectively get involved, they have to go for a bigger settlement. That means you may get a bigger “pay out” than you were looking for. But in the process, the attorney has to show that the homeowner was”negligent”. Negligence is simply defined as “failure to do what a reasonably prudent person would have done in similar circumstances.” When they are through making their case, the homeowner usually has been painted as an uncaring person, clearly aware of the hazardous condition which you were exposed to, yet chose to do nothing about it, which resulted in your injury. The outcome is usually that you get paid more than just your medical bills. But there is a cost to you: it may take months or years to get a settlement; you will usually have to attend assorted legal proceedings; you will likely lose the friendship of the person you are suing in the process.
Studies by the Insurance Research Council (IRC) found that auto injury claimants represented by attorneys jumped to 36% in 2012 compared to 15% found in a 1977 study. Each of those studies did find that the insurance companies paid out more for those who were attorney represented. But, those claimants “received on average lower net payments (after adjustments for legal fees)” and “they waited longer for payment of the claims” than those who were not represented. If you read between the lines, the studies omitted the fact that those not attorney represented commonly had minor injuries. It’s usually easy for an insurance company to settle a claim when you’re done treating for a minor injury. When treatments are ongoing and medical bills are still being generated, how can an insurance company determine what the future medical costs will be? What is your pain and suffering worth? Will you have future lost wages? What other factors need to be considered? That is where the expertise of an attorney is important.
Workers Compensation is one of the common loss situations where an attorney is usually not necessary. There are regulations governing every step of the claims handling process. Your employer is required by law to submit the claim to their insurance carrier. The benefits are established by law. Most commonly, injured employees will seek attorney representation when they perceive a delay in the handling of their claim. Employers can reduce the employee’s anxiety through active monitoring and communications with the parties involved. The scenario where an attorney is most beneficial, as with most claim situations, is when a serious injury is involved. Unlike most legal situations, the attorney fees are covered by the workers compensation insurance.
I don’t believe in stirring a person to or away from the services of an attorney. When asked, I attempt to coach them utilizing the facts of the case. A minor case is usually not worth it. However, when there were serious injuries involved (substantial medical bills, lost time from work, pain and suffering…), having a good attorney will help you navigate the process so that you can get on with your life.