THE LIFECYCLE OF A MASSACHUSETTS PROPERTY DAMAGE CLAIM
- The property damage occurs.
- The insured submits the claim to the
insurer.
- The insured chooses and retains a public
adjuster.
The role of the public adjuster: to determine all applicable coverages under
the insurance policy, prepare estimates, and advocate with the insurer over the
amount of loss.
The public adjuster is paid by contingency fee, typically ten percent of the amount recovered.
- The insurer may raise defenses to
coverage. If so, the insured should hire
an attorney immediately. The public
adjuster is not an attorney and cannot argue with the insurer about coverage
issues.
- If there is no dispute over coverage,
there will usually be back and forth between the public adjuster and the
insurer about the amount of loss.
- If the public adjuster/insured and the
insurer cannot agree over the amount of loss, the case goes to a reference
proceeding.
- A reference proceeding is
similar to an arbitration, with three referees who decide the amount of loss
based on evidence submitted by both sides.
THE INSURED SHOULD CONSULT WITH AN ATTORNEY:
- At any time, to answer questions about
the process and whether the claim seems to be proceeding on track.
- If the public adjuster advises the
insured to consult with an attorney.
- If the insurer raises defenses to
coverage.
- If the public adjuster and the insurer
are unable to agree on the amount of loss.
- If the insurer has demanded a reference
proceeding or the public adjuster advises the insured that a reference
proceeding is necessary.
- If the loss occurred 18 months ago and
the claim remains open.
Important: The statute of limitations on property damage claims in Massachusetts is generally two years, but if you wait until close to two years to hire an attorney you can lose crucial rights.
HOW A PUBLIC ADJUSTER AND ATTORNEY WORK TOGETHER:
- If the insurer raises defenses to coverage, the attorney will take the lead.
- If the public adjuster and
insurer are in the negotiating phase, the public adjuster will take the
lead. The attorney will be available to
answer questions from both the insured and the public adjuster, and to provide
advice, usually behind the scenes.
- If the public adjuster and
insurer are unable to agree on the amount of loss, the public adjuster and
attorney will work closely together. The
attorney will draft formal “demand letters” to the insurer, prepare the case
for a reference proceeding, and represent the insured at the reference
proceeding. The public adjuster will
support claims about the amount of loss, will prepare or help prepare exhibits,
and will be an expert witness at the reference proceeding.
TYPES OF COVERAGE IN MOST POLICIES
- Building damage
- Other structures
- Personal property
- Loss of use / additional living expenses
(residential) / business interruption (lost profits) (commercial)
- Code upgrades
- Mold
- Additional coverages such as
landscaping, etc.
Special issues in condominium buildings:
- The master policy is issued to
the condominium trust and provides coverage for common elements of the building
(for example, the roof and common areas).
- The unit-owners policy (often
called the HO-6 policy) provides coverage for the interior of a unit.
- Different master policies and
unit-owners’ policies have different definitions of common elements.
- In condominiums, a unit-owners’ personal
property and loss of use is typically covered by their unit-owner’s policy, not
by the master policy.
- Insurance proceeds from the master policy are disbursed to the condominium trust.
VOCABULARY
- Actual cash value (ACV):
The value of an item on the date of loss. This is paid immediately. - Replacement
cost value (RCV):
The cost to replace an item. - Depreciation:
The difference between ACV and RCV, This is paid upon completion of the work or when the item is replaced. - Code
upgrades:
The cost to bring a building in line with current state and local building code requirements. This is paid upon completion.
Material
presented in this brochure is for informational purposes only. It is not
intended as professional advice and should not be construed as such. Unless and
until you enter into a formal agreement with Attorney Kallen, she is not your
attorney and you do not have an attorney-client relationship with her.
Let me Introduce Myself!
I have been an attorney in Massachusetts since 1994. I practice in general litigation and focus on insurance coverage and bad faith issues. I am available to assist claimants and insureds who have a dispute over property, homeowners, general liability, motor vehicle, and other insurance policies.
You can learn more about
me on my website: www.kallenlawyer.com
40 FLORIAN
STREET
ROSLINDALE,
MA 02131
Phone:
(617) 363-0547
nkallen@kallenlawyer.com
www.kallenlawyer.com
Blog:
Insurance Coverage Law in Massachusetts
http://insurancecoveragemassachusetts.blogspot.com
2 comments:
I'm curious. Does Massachusetts require a public adjuster in all claims? I've had a few property damage claims (cars and homes) over the years, but in California. I simply filed the claim and waited for the insurance company to respond. I don't know if we have public adjusters here, or some equivalent. But I wouldn't want to spend 10% of my award if it's not needed.
Policyholders are not required to use public adjusters in any state, just like someone suffering a personal injury can try to settle their claim on their own rather than hiring an attorney.
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